Panama Papers
What were the Panama Papers, and what did they change?
The Panama Papers were more than 11.5 million records leaked from the Panamanian law firm Mossack Fonseca and published by ICIJ and media partners from April 2016. They documented 214,488 offshore entities linked to people in more than 200 countries and territories. The firm closed in 2018, and its founders and 26 others were acquitted of money laundering in Panama in June 2024. Governments have recovered at least US$1.3 billion, and several countries tightened ownership rules.
As of September 2026: The June 2024 acquittals are the outcome reported by ICIJ and AFP; check for any later appeal before citing them as final. Tax cases linked to the leak remain open in several countries, and US beneficial-ownership reporting now applies only to foreign-formed companies.
What happened?
In April 2016, more than 100 news organizations published the first stories from a leak of more than 11.5 million records (2.6 terabytes) taken from Mossack Fonseca, a Panamanian law firm that ICIJ described as the world’s fourth biggest offshore law firm. An anonymous source had passed the files to the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ).
The files covered 214,488 offshore entities connected to people in more than 200 countries and territories. The firm’s job was to set up and manage companies in places such as the British Virgin Islands and Panama. That work is legal. What the records showed was who sat behind some of those companies, including public officials and their families.
One point matters more than any other on this page: appearing in the files is not proof of a crime. ICIJ says there are legitimate reasons to create an offshore company and that many owners declare them to tax authorities. The leak exposed a system that made hiding ownership easy. It did not convict everyone in it.
Which techniques did it use?
The core tool was the shell company: a legal entity with no real operations. Read more in the shell companies technique guide. Mossack Fonseca sold these companies at scale, often with nominee directors and shareholders who appeared on paper so the real beneficial owner did not. Structures could be stacked, with one company owning another in a different country, so each layer added a legal request for an investigator to make.
Why it works is simple. A bank sees a company, not a person. If the company is in a jurisdiction that does not publish its owners, and the directors are stand-ins, the paper trail ends at a lawyer’s office. The same design that protects a legitimate owner’s privacy also protects a corrupt one.
How was it found?
It was not found by regulators. A single insider source leaked the records, and journalists spent months matching names in the files against public records and sanctions and politically exposed person lists. That is why the case is often used to show a gap: the data existed inside one firm’s servers, and no authority had a full view of it.
What was the outcome?
The firm. Mossack Fonseca said on March 14, 2018 that it was closing, citing “reputational deterioration, the media campaign, the financial siege and the irregular actions of some Panamanian authorities.” ICIJ reported that founders Ramón Fonseca and Jürgen Mossack were arrested in February 2017 on money laundering charges tied to Brazil’s bribery scandal and were released in April.
The trial. Prosecutors later charged 28 people in Panama. During an April 2024 trial, they sought the maximum 12-year sentence for money laundering for Mossack and Fonseca. Fonseca died in May 2024. On June 28, 2024, Judge Baloisa Marquínez acquitted all 28 defendants. Reporting on the ruling says she found that evidence from the firm’s servers had not been gathered in line with due process, and that the rest was not enough to prove criminal responsibility. So the leak that changed world politics did not produce a conviction of the firm’s founders.
The money. ICIJ’s April 2021 count was US$1.36 billion in back taxes and penalties recovered across 24 countries. Its 2026 review puts the figure at least US$1.3 billion, and calls it likely an undercount because many governments do not report what they collect. The public fallout was political too: ICIJ notes that Iceland’s prime minister resigned after protests and that Pakistan’s prime minister was removed from office in 2017.
What were the warning signs?
Investigators now treat several patterns from this case as standard red flags:
- Company with no operations, held by a nominee. A director whose name appears on many unrelated boards is a stand-in, not an owner.
- Ownership chains crossing several secrecy jurisdictions. Each hop makes tracing slower.
- A customer who cannot or will not name the person behind a company during know your customer checks.
- Politically exposed persons or their relatives owning companies that do not match their declared income (see PEP).
- A law firm or agent creating thousands of companies for clients it barely knows.
Each flag is a reason to ask questions, not an accusation.
What changed afterwards?
ICIJ’s ten-year review lists changes that followed. Panama made law firms identify the beneficial owners of companies they set up and started sharing tax information. The British Virgin Islands passed a law in 2017 requiring real owners to be reported to authorities. In the United States, ICIJ credits the leak with helping pass the Corporate Transparency Act, which took effect in 2021 and was meant to make owners of US companies visible to the Treasury.
That last change has since been rolled back. In a final rule announced August 11, 2026, Treasury made permanent an exemption for US-formed companies, so only foreign-formed companies registered to do business in the US must report their foreign owners. The gap the Panama Papers exposed remains partly open. For how the record-keeping fits together, see the detection overview and the techniques hub.
Frequently asked questions
Is having an offshore company illegal?
No. ICIJ says there are legitimate reasons to create a company in an offshore jurisdiction, and many owners declare them to their tax authorities. The Panama Papers showed where risk concentrates, not that every name in the files broke a law.
Why were the Mossack Fonseca founders acquitted?
Reporting on the June 2024 verdict says the judge found the evidence taken from the firm's servers had not been gathered in line with due process, raising doubts about its authenticity and integrity. She also found the remaining evidence was not sufficient to establish criminal responsibility.
How much money did governments recover?
ICIJ estimates that authorities have recouped at least US$1.3 billion in back taxes and penalties linked to the leak. Its April 2021 tally was US$1.36 billion across 24 countries. Many countries do not publish what they collect, so the true total is unknown.
Did the leak prove money laundering?
Not by itself. The files showed who was behind companies and accounts. Whether a structure involved tax evasion, corruption or laundering had to be proved separately by each country's investigators and courts, with mixed results.
Techniques used in this case
- Shell companies and nominees · Companies with no real operations hold accounts and assets while nominee directors and stacked ownership across jurisdictions hide the true beneficial owner.
Related cases
- The Russian and Troika Laundromats · Two exposed schemes moved money out of Russia through offshore shell companies and small banks: about US$20 billion via fake loans and Moldovan courts, and US$8.8 billion via Troika Dialog.
- FinCEN Files · A 2020 leak of more than 2,100 suspicious activity reports showed large banks moving suspect money, and helped push the US to its biggest AML overhaul in decades.
Glossary
Sources
- Frequently asked questions about ICIJ and the Panama Papers (ICIJ, 2016).
- Panama Papers firm Mossack Fonseca closes its doors (ICIJ, March 14, 2018).
- Panama Papers trial concludes with all defendants absolved of money laundering charge (ICIJ, June 28, 2024).
- Panamanian court acquits 28 defendants in 'Panama Papers' trial (France 24 (AFP), June 29, 2024).
- Panama Papers revenue recovery reaches $1.36 billion as investigations continue (ICIJ, April 6, 2021).
- Ten years after the Panama Papers, enablers and tax cheats are still being brought to justice (ICIJ, April 2, 2026).
- FinCEN Permanently Ends Beneficial Ownership Reporting Requirements for Millions of Small Business Owners (US Department of the Treasury, August 11, 2026).