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World

In Exposing Offshore Accounts, Panama Papers Could Catch Money Launderers

AUDIE CORNISH, HOST:

There are a lot of bombshells in the Panama Papers, the huge cache of files leaked from a law firm that specializes in offshore banking. It links hundreds of government officials, business moguls and even people suspected of illegal activity to these secret accounts.

ARI SHAPIRO, HOST:

Today the prime minister of Iceland resigned. Economic leaders are calling for greater transparency from German Chancellor Angela Merkel to the head of the World Bank, Jim Yong Kim. And regulators worldwide are reviewing the reports published by the International Consortium of Investigative Journalists.

CORNISH: The reports also shed light on money laundering. Robert Mazur is familiar with that sort of operation. He's a former federal agent who worked undercover posing as money launderer for years. I asked him how offshore accounts aid money laundering.

ROBERT MAZUR: Well, they're a very, very important tool in the toolbox of money launderers. You can launder money without it, but I'd be like playing Major League Baseball without a glove. It's an integral piece that blocks transparency. These types of offshore entities have been used for decades, and when I worked as a long-term, undercover agent as a money launderer, I dealt with many banks, many accountants, many attorneys, all of whom used those offshore entities on a regular basis to hide the true beneficial owners of funds that I handled and that other people handled.

CORNISH: When you look at what's come out in the papers now, in what ways - how does this change the game for prosecutors, for investigators?

MAZUR: This is actually the start of the game. This is the ability now to be able to link individuals to accounts, to assets and to then compare it with what they have purported legally in the world, to be tied to in the way of income and assets. These are going to offer the beginning of following a lead, and you're going to need to use mutual legal assistance, treaties. You're going to need to get cooperation between governments because most of the time, launderers don't just use one haven like Panama.

CORNISH: Right. And I'm sure a lot of people have questions about whether the U.S. has jurisdiction - right? - given that this laundering took place in foreign banks.

MAZUR: Yes but because of the fact that the U.S. dollar is the global currency, most of these bad guys wind up getting paid or seeking accounts in U.S. dollars. They do that because of the fact that other currencies are more prone to inflation and instability.

So once they wind up putting their funds into U.S. dollar accounts, unfortunately for them, when the money moves, it moves through U.S. jurisdiction, through the Fed. And that gives the U.S. authorities an opportunity to very often get jurisdiction in the matter.

CORNISH: This is a business about middlemen, ideally discrete middlemen, right? I mean, what are the hurdles in terms of pressing charges?

MAZUR: Well, the hurdles here are that the people who create these offshore entities set up what I considered plausible deniability - enough documentation, enough appearance of legitimacy that there is an excuse for what was done. That's the real difficulty here - to get to the heart of, where did the money come from; what crime was committed, and who knew it at the time that the transactions were being conducted?

But really, there's no better proof than their own words, and that's why I keep going back to the tremendous importance there is for governments to invest in doing the type of long-term undercover operations that I got the opportunity to do.

CORNISH: Robert Mazur - he's a former U.S. drug agent who's gone undercover to investigate money laundering. He's also written a book about his experiences called "The Infiltrator. Thank you so much for speaking with us.

MAZUR: It's my pleasure. Thank you. Transcript provided by NPR, Copyright NPR.