New York’s Ethan Allen Insurance Fraud Case Cited in ‘Panama Papers’

April 7, 2016

An insurance scam that involved selling bogus liability policies — including one to the operator of the New York tour boat Ethan Allen before it sank in 2005 — has gotten a mention in the data leak dubbed “Panama Papers.”

The Panama Papers refer to 11.5 million leaked documents tied to Panama-based law firm Mossack Fonseca & Co.

The firm is described as “one of the world’s top creators of shell companies, corporate structures that can be used to hide ownership of assets,” according to the International Consortium of Investigative Journalists, a Washington, D.C.-based nonprofit journalism group that has been coordinating efforts to examine these documents during the past year.

The Panama Papers are said to shed light on financial dealings and offshore accounts of prominent politicians and public officials around the world.

In 2011, accountant Malchus Irvin Boncamper, of the Federation of St. Kitts and Nevis, West Indies, pleaded guilty to conspiracy to launder money in a scam involving the sale of bogus insurance to Shoreline Cruises Inc., which operated the tour boat Ethan Allen on Lake George in upstate New York.

Prosecutors said Shoreline Cruises discovered its policy was fictitious after the Ethan Allen sank on Oct. 2, 2005, in a tragic accident that claimed the lives of 20 tourists. Officials said none of the claims made against the policy could be paid.

According to prosecutors, Boncamper acquired four insurance companies for the scheme in St. Kitts and Nevis — Commercial Acceptance Indemnity, United Re-insurance Group, Polaris International and Brentwood Re — and created financial statements for the companies listing assets he knew to be worthless. He is serving an 8-year prison sentence.

The International Consortium of Investigative Journalists said that when Boncamper pleaded guilty in 2011, this posed a problem for Mossack Fonseca & Co., “because Boncamper had served as the front man — a ‘nominee’ director — for 30 companies created by the law firm.”

The group said Mossack Fonseca quickly told its offices to “replace Boncamper as director of the companies — and to backdate the records in a way that made it appear the changes had taken place, in some cases, a decade earlier.”

The group said it’s one of the examples showing the Panama-based law firm using “questionable tactics to hide its own methods or its customers’ activities from legal authorities.”

Mossack Fonseca on Monday issued a statement in response to recent media coverage of the leaked documents.

“Recent media reports have portrayed an inaccurate view of the services that we provide and, despite our efforts to correct the record, misrepresented the nature of our work and its role in global financial markets,” the law firm said in the statement. “These reports rely on supposition and stereotypes, and play on the public’s lack of familiarity with the work of firms like ours.”


Topics Fraud New York

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