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Panama Papers Accountant Seeks Early Release Due To Virus

By David Hansen · 2021-01-11 19:16:14 -0500

The government should grant early release to a 76-year-old accountant brought down by the Panama Papers investigation because he has COVID-19, his attorneys told a New York federal court Monday.

Frank Gaffey, the accountant, fell ill from a "massive outbreak" of the novel coronavirus occurring at his federal prison after he reported to it in late November, his attorneys said. The court must hold an emergency hearing after the government's counsel in the case indicated the U.S. will likely oppose the motion, they said.

"Since surrendering nearly six weeks ago, Mr. Gaffey has experienced a horrific period of isolation and severe illness in custody," they told the U.S. District Court for the Southern District of New York. "To leave him in prison as the pandemic rages is to gamble with his life in a way that violates principles of justice and proportionality in sentencing."

In September a federal judge sentenced Gaffey, 76, to 39 months in prison for tax evasion, wire fraud, money laundering and other charges for helping clients of law firm Mossack Fonseca avoid taxes, according to court documents. He also received three years of supervised release and almost $9 million for his role in concealing assets and investments from the Internal Revenue Service from 2000 to at least 2018.
 
Gaffey's federal prison, FMC Devens in Massachusetts, had zero COVID-19 cases when he reported in November, his attorneys said. Since then it has experienced a "ferocious" outbreak infecting 319 prisoners, or about 43 percent of the prison population, including Gaffey, they said. COVID-19 is the respiratory disease caused by the virus.

Gaffey's condition is improving, his attorneys said. Still, he remains in "grave danger" because of his already poor health and age, they said. Gaffey suffers from diabetes, chronic renal failure and high blood pressure and had a prior bout of bladder cancer, they said.

That Gaffey already contracted COVID-19 should not diminish the need for his release, his attorneys said. Courts have granted compassionate release to prisoners who already contracted the virus, including those whose symptoms abated, they said. Severe symptoms can appear suddenly, and those who were infected can catch the virus again, they said.

Courts also have granted release to prisoners who, like Gaffey, served short periods of their sentences, his attorneys said.

"The arduous conditions Mr. Gaffey has already endured in custody, followed by lengthy home confinement, are sufficient punishment," his attorneys said.

If released, Gaffey would convalesce at his Massachusetts home and would remain quarantined from his family while ill, they said. The attorneys proposed that his prison term be reduced to time served and that he spend his supervised release of three years confined to his home.

Gaffey was the accountant for private equity manager Harald Joachim von der Goltz, who lived in the U.S. from 2000 through 2017 and was required to report and pay taxes on worldwide income under U.S. tax laws, according to court documents.

Gaffey and von der Goltz in 2020 both admitted to concealing von der Goltz's assets from the IRS with the help of Panamanian law firm Mossack Fonseca. Millions of the firm's documents were leaked to the news media in 2016, providing a glimpse into how the world's powerful people hide their wealth offshore.

Von der Goltz pled guilty in February and was sentenced to four years in prison. A federal judge last month delayed the start of his sentence until March to give him a chance to receive the coronavirus vaccine. 

Legal representatives of the U.S. did not respond to requests for comment Monday.

Gaffey legal representative Daniel Marx declined to comment Monday.

The U.S. government is represented by Eun Young Choi, Nathan Martin Rehn and Kristy Jean Greenberg of the United States Attorney's Office for the Southern District of New York and by Parker Tobin of the Tax Division of U.S. Attorney's Office for the Southern District of New York.

Gaffey is represented by Daniel N. Marx, William W. Fick and Amy Barsky of Fick & Marx LLP.

The cases are U.S. v. Gaffey, case number 1:18-cr-00693-RMB-3, and U.S. v. Owens, case number 1:18-cr-00693, in the U.S. District Court for the Southern District of New York.

--Additional reporting by Amy Lee Rosen and Reenat Sinay. Editing by Vincent Sherry. 

Correction: A previous version of this story misidentified counsel for Gaffey. The error has been corrected.

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