Harald Joachim von der Goltz, a former US resident and taxpayer who used the services of Mossack Fonseca and who was arrested in London in December 2018, has pled guilty in the US to wire and tax fraud, money laundering, false statements and other charges.

The 82-year-old, a HNW citizen of Germany and Guatemala who last resided in Massachusetts and Florida, conspired for nearly two decades with the now-legendary law firm of Mossack Fonseca to keep his income hidden from US tax authorities and police. Among his crimes were four counts of willful failure to send off reports of foreign bank and financial accounts (Financial Crimes Enforcement Network Reports 114).

The United States have the only tax laws on the planet, apart from those of Eritrea, which require a citizen to report and pay income tax on worldwide income, including income and capital gains generated in domestic and foreign bank accounts. This von der Goltz failed to do. He evaded his tax reporting obligations by setting up a series of shell companies and bank accounts and hiding his beneficial ownership of them from the US Internal Revenue Service. These shell companies and bank accounts made investments of tens of millions of dollars.

His helper who worked at Mossack Fonseca, Panamanian lawyer Ramses Owens, 51, has troubles of his own. He, too, was charged in an indictment unsealed on 4 December 2018 in the Southern District of New York with 11 counts of wire fraud, tax fraud, money laundering and other offences but at the moment he claims that he cannot travel to the United States from Panama, where he is under investigation and subject to strict bail terms.

His bail was two amounts of US$300,000. His absence from proceedings in New York is, in his word, “involuntary,” even though US prosecutors are trying to characterise him as a fugitive from justice. In September he applied to the Supreme Court of Panama to be allowed to go to the US but the prosecutors persuaded the court to block this.

The 'fugitive disentitlement doctrine' set down in the case of US v Technodyne LLC (2014) identifies five prerequisites to declare someone a fugitive. Among them is the stipulation that the claimant must not be confined or otherwise held in custody in another jurisdiction (which he apparently is); another is that he must have deliberately avoided prosecution by declining to enter the US, which he seems not to have done. Matters are now in limbo.

Defence attorneys for von der Goltz argued at trial that the phrases “shell company” and “tax haven” would inflame the passions of the jury unfairly. His is America's first tax conviction related to the Panama Papers.