Medfield Man Sentenced In Panama Papers Investigation

MEDFIELD, MA — A Medfield accountant was sentenced to three years and four months in prison after he was found to do business with the company at the center of the Panama Papers leak.

Richard Gaffey, 76, pleaded guilty to conspiracy to commit tax evasion and to defraud the United States, wire fraud, money laundering, aggravated identity theft and four counts of will failure to file reports of foreign bank and financial accounts. Gaffey must also serve three years of supervise release and pay fines and restitution totaling more than $8.8 million

Gaffey was charged along with Harald Joachim Von der Goltz, Ramses Owens, and Dirk Brauer in connection with a decades-long scheme by Mossack Fonseca & Co. (Mossack Fonseca), a Panama-based global law firm, that held billions in assets for foreigners, some of whom were looking to shield money from the IRS in a tax haven.

Between 2000 and 2018, court documents said Gaffey defrauded the U.S. government by hiding his clients' money from the IRS through "fraudulent, deceitful and dishonest means."

Prosecutors said Gaffey helped his clients avoid paying taxes in several ways, including hiding the beneficial ownership of his clients' offshore shell companies and setting up bank accounts for those shell companies. According to court documents, those shell companies and bank accounts made investments totaling tens of millions of dollars,

For one U.S. taxpayer, Gaffey advised how to sneak $3 million to the U.S. by reporting to the IRS a made-up company sale that never actually occurred to evade paying the full tax amount. Prosecutors said Gaffey was assisted in this scheme through by Mossack Fonseca, the company at the center of the Panama Papers investigation. Owens worked at Mossack Fonseca at the time and helped Gaffey with this scheme, prosecutors said.

In another scheme, Gaffey was the accountant for Von der Goltz, prosecutors said. From 2000 to 2017, Von der Goltz was a U.S. resident and was required to pay taxes on worldwide income.

Prosecutors said Gaffey helped Von der Goltz avoid paying taxes by falsely claiming Von der Goltz's mother was the sole beneficial owner of shell companies and bank accounts he was using. Gaffey did this because Von der Goltz's mother was a Guatemalan resident and was not a U.S. taxpayer, prosecutors said.

Von der Goltz was previously sentenced to 48 months in prison. Owens and Brauer remain at large. Owens and Brauer remain at large.