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Data Theft & Fraudulent Concealment

Per the electronic NYT dated June 15, 2016:

“An employee of the law firm at the center of the leaks of the Panama Papers, which have revealed offshore wealth held in secretive accounts worldwide, has been arrested here on charges of data theft…”

The Panama Papers illustrate the power of social imagination and collaborative problem-solving (until the whistle was blown and the cover lifted). The issue: What to do with assets and income (especially financial funds in U.S. dollars) that controlling persons (i.e., beneficial owners) want concealed from various legal processes (e.g., U.S. DoJ, U.S. Treasury). This is an extension of the specific practice of making assets bankruptcy remote to making assets remote entirely from official (i.e., legal) seizure. The venue of the controlling person is made irrelevant: It does not matter whether the individual initiating the concealment process resides in the U.S., Russia, etc., so long as the service providers (e.g., law firms, banks, brokers) have the network to transfer jurisdiction over the assets (e.g., an account, a shell company) to a sovereignty (e.g., Panama) that allows its registered agents (e.g., Mossack Fonseca) to value their clients’ protection and confidentiality above the laws and regulations of foreign jurisdictions.

The process deployed by initiating individuals is similar to the process of fraudsters generally; i.e., conceal the fruits of the profitable venture so as to convert to private use without giving a cut to Caesar. Whether the first prong of the fraudsters’ imperative (i.e., to commit theft by deception) has been met in some cases will await the further unfolding of the facts (or not). Some have raised the issue of not only the sources of funds but the entire disclosure to the public (e.g., from illicit and/or clandestine schemes?)

For context and proportion an analogous scandal – the LuxLeaks – ought to be reviewed. It has faded into comparative obscurity, however the attributes of concealment and potential tax evasion / avoidance are shared, as well as the necessary flight from transparency of the public domain to official but not public data vaults that lack the connections to economic reality (e.g., the paths to the economic enterprise for which the subservient legal entities and shells are created and used) to establish the actual business purpose of such official registrations and rulings.

Back to the NYT article – the alleged crime may be data theft, though it seems more like illicit data sharing. After all, the data are still possessed by their original custodian. Assuming these data are akin to the intellectual property of the custodian (really, is my social security number mine or does it belong to the Social Security Administration?), one may readily conceive that these data as intangible property cannot be owned legally by a custodian that uses such for an illegal purpose. The data could be seized by a law enforcement agency with jurisdiction. Based on the global nature of the concealment schemes depicted by the Panama Papers, there are many possibilities, especially when assessing whether such schemes and practices serve the public interest, and if they do not, who is providing the inspection and oversight to assure the public that these schemes and practices do not impair the public interest for the benefit of a few private interests? Presently, I suppose it’s none of my business.

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