The Isle of Man is implicated in the first US prosecution related to the so-called Panama Papers.

Four defendants have been charged with wire fraud, tax fraud, money laundering and other offences in connection with their roles in what Federal authorities describe as a ’decades-long criminal scheme perpetrated by Mossack Fonseca & Co’, the Panama-based global law firm.

The defendants, who were employees and a client of Mossack Fonseca, allegedly ’shuffled’ millions of dollars through offshore accounts and created shell companies to hide fortunes.

US citizen Richard Gaffey, 74, Ramses Owens, 50, of Panama, and Dirk Brauer, 54, and Harald Joachim Von Der Goltz, 81, both German citizens, were charged in an indictment unsealed last week in Manhattan federal court, the US Department of Justice confirmed.

Manhattan US Attorney Geoffrey S. Berman said: ’As alleged, these defendants went to extraordinary lengths to circumvent US tax laws in order to maintain their wealth and the wealth of their clients.

’They had a playbook to repatriate un-taxed money into the US banking system. Now, their international tax scheme is over, and these defendants face years in prison for their crimes.’

The indictment alleges that Owens, a Panamanian attorney who worked for Mossack Fonseca, opened two offshore accounts in the Isle of Man for a client.

These two accounts were nominally held by two offshore shell companies formed by Mossack Fonseca and which conducted ’no real operations’.

The client initially deposited about $1 million into the two offshore bank accounts but over time continued to deposit his earnings into them, totalling several million US dollars in value.

From 2000 through 2017, Owens and Brauer conspired with others to help US taxpayer clients of Mossack Fonseca conceal assets and investments through ’fraudulent, deceitful, and dishonest means’, the indictment alleges.

The pair worked to establish and manage ’opaque’ offshore trusts and undeclared bank accounts, marketing, creating, and servicing ’sham’ foundations and shell companies in countries such as Panama, Hong Kong, and the British Virgin Islands.

The names of clients generally did not appear anywhere on the paperwork for the ’sham’ foundations or related shell companies, although the assets were beneficially owned by them.

Von Der Goltz, who was one of Mossack Fonseca’s US taxpayer clients, was arrested in London on Monday last week. Gaffey, a partner at US-based accounting firm Elder, Gaffey & Paine, was arrested in Massachusetts the next day.

Elder, Gaffey & Paine said in a statement that it believes the charges in the indictment are without merit and Mr Gaffey will be mounting a defence against the government’s allegations.

Brauer, who worked as an investment manager for Mossfon Asset Management, SA, an asset management company closely affiliated with Mossack Fonseca, was arrested in Paris on November 15.

Owens was arrested in Panama last week.

If convicted, the four face a maximum of 20 years in jail. Mossack Fonseca found itself at the centre of the Panama Papers revelations in 2016 when millions of files from its database were leaked. The unprecedented leak shone a new light on the hidden world of international offshore finance.