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How to Hide a Billion Dollars: Data Leaks, Tax Havens, and the Panama Papers

Tuesday night we went to the Happy Dog on Detroit Avenue for the monthly "Happy Dog Takes on the World" and the subject matter for the evening was "How to Hide a Billion Dollars-Data Leaks, Tax Havens, and the Panama Papers" presented in conjunction with the City Club, Cleveland Council on World Affairs, 90.3 WCPN Ideastream, IMG_1807and the Northeast Ohio Consortium for Middle East Studies (NOCMES).

Mr. Tony Ganzer of host/producer of WCPN was the moderator of a discussion featuring Mr. Richard Gordon, Director of the Financial Integrity Institute, Associate Director of the Frederick K. Cox Law Center; and Professor at CWRU School of Law; Mr. Justin E. Herdman, Partner at Jones Day and former federal prosecutor; and Dr. Valdis Krebs, Founder and Chief Scientist at Orgnet, LLC. who is, as the Orgnet website states, "a management consultant, researcher, trainer, author, and the developer of Inflow software for social and organizational network analysis."

First of all, as "Wikipedia" contends, "the Panama Papers are 11.5 million leaked documents that detail financial and attorney–client information for more than 214,488 offshore entities. The leaked documents were created by Panamanian law firm and corporate service provider Mossack Fonseca; some date back to the 1970s. The leaked documents illustrate how wealthy individuals, including public officials, are able to keep personal financial information private. While offshore business entities are often not illegal, reporters found that some of the Mossack Fonseca shell corporations were used for illegal purposes, including fraud, kleptocracy, tax evasion, and evading international sanctions."IMG_1809

One of the slides that Dr. Krebs shared with us maintained that the "secret" of money laundering is "distance" which leads to distortion, difficulty, and deniability.

Among the things that the panel discussed were the possible involvement in money laundering by certain foreign officials such as Iceland's Prime Minister Sigurdur Ingi Johannsson and very possibly Russia's President Vladimir Putin; anti-corruption legislation such as the North Korea Financial Asset Program that has shown positive results; the pitfalls of conducting successful investigations when other countries are involved; the in's and out's of the current legal procedures when it comes to money laundering and how they could be improved upon;  how the financial institutions of the United States are much more transparent than certain foreign entities and how this works for the better for all of us; and the progress of the investigations into the Panama Papers thus far and how long it might take before we see results and possible ramifications.

Overall we found tonight's program to be fascinating but disturbing so we appreciated the humor that Mr. Sean Watterson, the owner of the Happy Dog, brought to the proceedings when he said that he used to be "an anti-money laundering, anti-terrorism lawyer before I started selling hot dogs" because we could now understand why he found his present line of work to less psychologically taxing.


One of the highlights of the evening was when Dr. Krebs showed us a series of slides that demonstrated his form of network analysis; how a data scientist "can find non-obvious patterns in complex connected data." Among the examples he showed us, in addition to "Patterns in the Panama Papers", were how he traced the 9/11 hijackers and the various parties involved in what lead to the foreclosure of a home in Slavic Village.

Before the presentation, we got to visit for a moment with Dr. Krebs and his wife, Ms. Silvija Krebs and found them to be very charming people. We learned that both of their families immigrated to the United States from Latvia in the 1950's and they are first generation Americans. They very deeply oppose the current anti-immigrant sentiments and respect the work that Mr. Joe Cimperman is doing via Global Cleveland and the Global Initiative.

Along these lines, Mr. Dan Moulthrop, City Club CEO, spoke for a moment about the very promising upcoming City Club program featuring Mr. Mustafa Akyol, a Turkish political commentator and the author of a book titled "Islam Without Extremes: A Muslim Case for Liberty" for which Margaret W. Wong and Associates has purchased a table.


Michael Patterson 

Community Liaison,

Margaret W. Wong & Assoc. Co., LLC


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