Panama Papers' firm co-founder: We didn't know

Maybe we were too trusting early on: Mossack
Maybe we were too trusting early on: Mossack
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Mossack Fonseca building under scrutiny
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Long-term implications for Panama Papers fallout
Long-term implications for Panama Papers fallout

Juergen Mossack, co-founder of the firm at the center of the Panama Papers, didn't know that associates of top politicians from around the world were using his company to help hide money, he told CNBC in a Friday interview.

Mossack Fonseca, the Panamian law firm under intense scrutiny because of the release of four decades of documents detailing the establishment of offshore companies for the global elite, has always sought to follow the laws in its jurisdiction, Mossack said. And, he added, if the firm had ever discovered its clients were tied to individuals like Russian President Vladimir Putin, it would've immediately stopped those dealings.

Still, Mossack was not appreciative of the recent data leak that has been dubbed the Panama Papers by the international media.

"We were alarmed because this is obviously something that shouldn't be out there," he told CNBC. "Private information is private and should remain private."

And that information, Mossack said, did not demonstrate any wrongdoing on the part of his firm.

"There are many firms where you don't even have to be an attorney who are company providers in the United Kingdom, in the United States, in many European countries, and they all do the same business as we do," he said. "We haven't done anything illegal, so that means we haven't been caught: We have been hacked."

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Mossack said his company is investigating how the information got into the hands of the press, and that there was no indication it was an inside job. Rather, he said, his firm's investigation had determined it'd been hacked from the outside.

Still, Mossack said the resulting media reports had been illuminating for him, as he did not know some of his clients had been tied to Putin or to at least eight present or past members of the Communist Party's Politburo Standing Committee.

And if his firm had known about those connections, "normally in a case like that we would resign, we would stop dealing with that client and with that company," he said.

Explaining why Mossack Fonseca hadn't known earlier, Mossack emphasized to CNBC that his firm does not regularly monitor the activities of the companies it helps setup.

Although recent local rules have tightened the need for firms like Mossack's to perform due diligence on their clients, he said business practices in "the old days" were much looser. Still, he added, his due diligence department has been working on going back through old records and conducting investigations.

Mossack said he didn't think he'd been "too trusting" in the past, but acknowledged that there was an element of trust in those "old days" transactions.

The Panama Papers were published by a team of journalists on Sunday, detailing offshore "shell companies" setup by Mossack Fonseca that could help the international wealthy hide assets from their country's taxes.

Although scandals have erupted across the world because of the reports, there's been little mention of an American connection. Mossack explained that his firm has very few U.S. clients — "you could count them probably with the fingers of two hands" — and they are only accepted if they produce a legal opinion from an American lawyer or tax adviser certifying that the individual is compliant with all U.S. laws and regulations.

—CNBC's Eamon Javers and the Associated Press contributed to this report.