Panama Papers Fugitive Arrested In Ukraine After 3 Years On The Run

ODESSA, Ukraine -- After nearly three years on the lam, Italian fugitive Giuseppe Donaldo Nicosia — whose lavish spending of allegedly stolen money was laid bare in the Panama Papers — has been arrested in Ukraine.


Giuseppe Donaldo Nicosia (C) was arrested on April 18 in the Ukrainian city of Odessa. He is wanted in Italy for allegedly masterminding a massive tax fraud. 
Police in the Black Sea port of Odessa captured Nicosia on April 18, acting on a request from Italy’s financial police and Interpol, Italian prosecutors said in a statement. 
A video released by Ukraine’s security service shows Nicosia in handcuffs, wearing a New York Mets cap over curly, brown hair. 

“Are you Giuseppe Nicosia?” an agent asks in English. 

“I am,” Nicosia replies. “But you ... I don’t know you.” 

Nicosia stands accused in Italy of masterminding a complex $48 million scheme that claimed fraudulent tax credits for the purchase of advertising space. 

The businessman cut a colorful figure, sporting a tattoo in support of Italy’s former fascist dictator Benito Mussolini on his right arm and buying expensive motorcycles, horses and cars. 

He fled Europe shortly before an Italian judge issued a warrant for his arrest in June 2014, traveling to South Africa, Brazil and Panama before finally landing in war-torn Ukraine, Italian law enforcement sources say. 

Nicosia is awaiting extradition to stand trial in Italy. 

His alleged partner in the scheme, the former Italian senator Marcello Dell’Utri, was sentenced to four years in prison for tax fraud and seven years for Mafia ties. (Dell’Utri, an ally of former prime minister Silvio Berlusconi, may seek a hearing from a higher court on the fraud conviction.) 

A judge said the scheme netted Dell’Utri and his collaborators “dozens of millions of euros.” 

Secret offshore world 

The Panama Papers — a leak of 11.5 million documents from Panama-based law firm Mossack Fonseca — revealed how Nicosia turned to the secretive world of offshore companies to hide his fortune. 

Before the alleged fraud ring was busted, Nicosia used Mossack Fonseca’s Miami office and a local law firm to structure a purchase of two luxury Manhattan condos. 

The condos, valued at $3.2 million, were owned through shell companies based in Delaware and the British Virgin Islands. 

Both are secretive corporate jurisdictions that don’t require company owners to reveal their identities. 

Confidential documents in the Panama Papers show Nicosia controlled both companies. 

But no one examining public records would have been able to make the connection. 

The opaque deal illustrates a worrying lack of oversight in the offshore world that critics say allows criminals to hide their profits with impunity. 

The 2017 Pulitzer Prize for Explanatory Reporting was awarded to the Miami Herald, its parent company McClatchy and the International Consortium of Investigative Journalists for a series of stories on how offshore corporate secrecy allows corruption to flourish. 

Mossack Fonseca’s founders, Jurgen Mossack and Ramon Fonseca, have been arrested on money laundering charges in Panama. 

They deny any wrongdoing. 

The Secret Shell Game 

Italian prosecutors already suspected Nicosia of using money from the tax fraud to buy the condos, which were combined into one unit. 

In 2015, they asked a U.S. district court in Washington, D.C. to seize the property, federal court records show. 

But it was too late. 

Within two days of the request, Nicosia had signed a contract to sell the home to another Delaware shell company for $3.72 million. 

The sale went through before the court could act. 

“The buyer, to date, does not appear to be associated with Nicosia,” a prosecutor with the U.S. Justice Department’s money laundering unit wrote in a motion seeking to dismiss the case earlier this year. 

“The United States is currently providing mutual legal assistance to Italy to trace the proceeds of the sale.” 

Source: Miami Herald

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