Panama Papers without the myth

Ten years on, the Panama Papers are remembered as a list of famous names. The record is more useful than the legend: what a nominee actually is, what the leak did and did not prove, and why the files are still producing court judgments in 2026.

Charles Pycraft · October 2026 · London

Cover card: Panama Papers without the myth. An investigation by Charles Pycraft

Every big leak turns into a story people tell about it. The Panama Papers story usually goes like this: in 2016 some celebrities and politicians were caught hiding money on tropical islands, there was a fuss, and nothing changed.

Almost every part of that sentence is wrong, or at least incomplete. The public record, built over ten years by journalists, tax authorities and courts, tells a slower and more instructive story. It is worth reading without the myth, because the machinery it describes is still in use.

What the files actually were

In April 2016 the International Consortium of Investigative Journalists (ICIJ), the German newspaper Süddeutsche Zeitung and more than 100 media partners began publishing an investigation based on 11.5 million documents from Mossack Fonseca, a Panamanian law firm with branches in Hong Kong, Zurich and dozens of other places. According to ICIJ, the files covered 214,488 offshore entities connected to people in more than 200 countries and territories, incorporated across 21 offshore jurisdictions, from Nevada to the British Virgin Islands to Singapore.

That is not a celebrity list. It is the back office of one mid-sized incorporation business: emails, spreadsheets, passport copies and corporate records. The famous names were a small fraction of the whole. The rest was routine paperwork, which is exactly why it matters. It showed how ordinary the product was.

Four myths, one record: celebrity list, illegality, inaction, and conviction are the wrong frame for the Panama Papers.
Four myths, one record: celebrity list, illegality, inaction, and conviction are the wrong frame for the Panama Papers.

Myth one: offshore means illegal

It does not. A company in the British Virgin Islands or a foundation in Panama is a legal object. People use them for holding assets, joint ventures, inheritance planning and plenty of dull commercial reasons. The ICIJ coverage said so at the time, and so did Mossack Fonseca.

The problem the files exposed was narrower and more precise: separating the person who really owns and controls an asset from the names that appear on paper.

A German court has now described that service in unusually plain terms. In April 2026 the Cologne Regional Court (Landgericht Köln, case 116 KLs 8/23) convicted a former co-owner of Mossack Fonseca of aiding and abetting tax evasion. The published judgment describes the firm's offer as an "anonymisation service" sold to international clients, not as a bespoke arrangement for one customer but as a worldwide, largely standardised and digitised mass business. The companies were fitted with nominee directors and nominee shareholders drawn from a small pool of the firm's own staff. Those nominees held formal meetings and passed formal resolutions. The real owners did not appear on any register and were instead given wide powers of attorney behind the scenes. The court also noted that the companies were introduced through banks or asset managers, the "intermediaries".

That is the mechanism in one paragraph. The name on the register belongs to someone with no real power. The power sits with someone whose name is on no register. The structure is legal; what it is used to hide may not be.

Myth two: the names were the story

The names made people read. The structures were the story.

Three public roles appear again and again in the reporting, and they are worth separating because they are often blurred:

A later piece in this series will take trust construction and beneficiary types on their own: settlor, trustee, protector, letter of wishes, and the difference between a fixed interest and a discretionary one. For now the point is simple. Reading a structure means asking who decides, not only who is named.

On the register and behind it: nominee anatomy from the Cologne judgment of April 2026.
On the register and behind it: nominee anatomy from the Cologne judgment of April 2026.

Myth three: nothing happened

This is the myth the record contradicts most clearly.

None of that made offshore secrecy disappear. It did change the price of being found.

Ten years on the record: from April 2016 publication to the Cologne conviction of April 2026.
Ten years on the record: from April 2016 publication to the Cologne conviction of April 2026.

Myth four: a leak is a conviction

This is the most important correction, and the most uncomfortable one for anyone who wants a neat ending.

In June 2024 a Panamanian court acquitted all 28 defendants in the Panama Papers money laundering case, including the firm's surviving co-founder. Panama's judiciary said the electronic evidence taken from Mossack Fonseca's servers, which had been submitted on paper, did not meet the chain of custody or the principles governing digital evidence, chiefly because it lacked "hash" values that would show it was authentic and unaltered. The judge found the remaining evidence insufficient.

Two years later, in Cologne, a different court reached a different result against a different defendant, on a narrower charge, after a confession. The German judgment set the tax loss across 50 cases at more than €13 million. ICIJ reports a suspended sentence of one year and nine months.

Read together, the two judgments say something calm and useful. Journalism exposes. Courts convict only on evidence that survives their own rules. A leak can show a pattern beyond reasonable doubt in the public mind and still fail in a courtroom if the files were not gathered and preserved properly. Anyone who works on offshore structures, as a journalist, a compliance officer or an investigator, should take that lesson seriously. Provenance is not a technicality.

Where this sits on the map

The Panama Papers are often filed under "Panama". The files point wider. About half of Mossack Fonseca's companies, according to ICIJ, were incorporated in the British Virgin Islands, the firm had Swiss offices, and ICIJ found that the most active intermediaries ordering companies were based in places such as Hong Kong, Switzerland, the UK and Luxembourg. The incorporation brand was Panamanian. The route was global, and much of it ran through British-administered jurisdictions and Swiss private banking. Both are coming next in this series.

Watched and exposed

Ten years on, the Panama Papers are less a scandal than a method. Leaked records led to registers. Registers led to questions. Questions led, slowly, to tax recoveries and judgments, in some countries and not in others. Structures built years earlier on the assumption that nobody would ever read the file were read in 2016 and were still being argued over in a German courtroom in 2026.

That is the quiet change. The offshore system was designed for a world in which paperwork stayed in the drawer. That world has gone.

Related reading: The quiet desk: how trust lawyers sit between client and shell; China Turns the Light on Offshore Trusts; Offshore & Investigations. Next: Switzerland, and how banking secrecy was built.

I write about offshore structures as an independent researcher, from public sources only.

Sources