Feds probe financial firm that was focus of Herald’s Pandora Papers investigation (original) (raw)

The Internal Revenue Service building in Washington, D.C.Getty Images

The U.S. Internal Revenue Service has launched a broad probe into whether financial services firm Trident Trust Group helped well-heeled Americans evade taxes. The company has numerous offices around the world including in New York, Houston and Miami.

Trident took on hundreds of wealthy clients who abandoned the Panamanian financial services company that was at the heart of the “Panama Papers” shortly after the scandal broke, a Miami Herald investigation found. These included shell companies and trusts owned by billionaires, alleged terrorists and Saudi royals.

The IRS and the U.S. Justice Department announced on Dec. 23, 2024 that a federal judge in the Southern District of New York signed off on the IRS’ request to demand wide-ranging financial and legal records from Trident.

The IRS noted that the services Trident offers, while not always illegal, often “bear the hallmarks of abusive offshore arrangements.” These include setting up and maintaining offshore accounts and entities; helping their clients keep their identities anonymous on official paperwork through a focus on “secrecy and concealment” and facilitating the “migration of companies from one jurisdiction to another.”

The action comes in the aftermath of several news stories on Trident’s potentially dubious activities, including the Herald investigation that revealed that right after the Panama Papers series was published, Trident took on roughly 700 clients of Mossack Fonseca, the financial services company at the heart of the scandal, bypassing traditional methods and fast-tracking their switch to Trident.

Trident employees even had a name for this: the “MossFon Project.”

Trident Trust Group, in a statement, denied any wrongdoing. A spokesperson said that Trident is “fully committed to compliance with all applicable regulations” and “proactively informs the relevant authorities where any compliance process gives rise to concerns.”

The gleaming towers at 1395 Brickell Ave. house the Miami offices of Trident Trust, doing business in Florida as Integritas Trust. (Photo: Carl Juste/Miami Herald) Carl Juste cjuste@miamiherald.com

While the IRS did not disclose the identities of any of Trident’s clients, the agency noted in the court filings that it already knew of nine U.S. taxpayers who used Trident to create offshore companies and failed to comply with U.S. tax laws. The agency is now seeking to broaden the scope of their investigation.

The IRS is demanding business and legal documents and client records from Trident and its affiliates; financial records and data from banks Trident worked with – including the Federal Reserve Bank of New York, HSBC, the Bank of New York Mellon, Bank of America, Wells Fargo and Deutsche Bank – and Trident’s mailing records from Fedex, UPS and DHL. The IRS uses these broad, so-called “John Doe” summonses to seek information when the identities of individuals and financial entities are unknown.

“These records will assist the IRS and its partners in finding those taxpayers, ensuring their compliance with the U.S. tax laws and delivering on our mission of a fair tax system,” IRS commissioner Danny Werfel said in a statement.

The probe into offshore accounts and potential tax evasion comes as a federal judge in Texas blocked the enforcement of the recently-passed federal Corporate Transparency Act, which would require companies to report their beneficial owners to the U.S. Treasury Department. Elon Musk, a billionaire ally of President-elect Donald Trump, tasked with leading the “Department of Government Efficiency” advisory committee, has also floated the idea of “deleting” the IRS.

The IRS and Justice Department also announced that they are pursuing parallel summonses in federal courts in Georgia and emerging tax haven, South Dakota, where Trident has incorporated affiliated businesses.

The parallel summonses show that the case isn’t “just an offshore problem,” said Ian Gary, the executive director of the nonpartisan advocacy group, Financial Accountability and Corporate Transparency Coalition. He commended the federal agencies and said that cases like this shows why he believes that funding the IRS is a “smart investment.”

Shirsho Dasgupta is an investigative reporter with the Miami Herald/McClatchy DC Bureau. He was named a Livingston Award finalist in 2024 for international reporting. His stories have spurred investigations, influenced legislation and received numerous awards and citations from the National Press Foundation, Investigative Reporters and Editors, the Society for Advancing Business Editing and Writing and others. He holds Master’s degrees in English and Journalism.