A screenshot shows the website of Panamanian law firm Mossack Fonseca on April 4, 2016.
A screenshot shows the website of Panamanian law firm Mossack Fonseca on April 4, 2016. ()

Ten months after a hacking scandal hit one of Panama’s top law firms, pulling back the veil of secrecy covering the offshore legal work, prosecutors in the Central American country have arrested Mossack Fonseca name partners Ramon Fonseca Mora and Jurgen Mossack in connection with a massive bribery case.

The allegations involve offshore accounts that permitted Brazilian conglomerate Odebrecht SA to perpetrate a corruption scheme throughout the Americas. Odebrecht and one of its 12 business units, petrochemical company Braskem SA, agreed in December to pay $2.6 billion in one of the largest settlements in the U.S. under the Foreign Corrupt Practices Act. Quinn Emanuel Urquhart & Sullivan and Paul Hastings had key roles in shepherding that landmark deal, according to sibling publication the New York Law Journal.

Fonseca and Mossack were arrested Saturday in Panama City after being indicted on money laundering charges related to the bribery scandal at Odebracht. Panama’s Attorney General Kenia Porcell said in a subsequent press conference that Mossack Fonseca was a “criminal organization … that is dedicated to hiding assets or money from suspicious origins.” Porcell credited prosecutors in Brazil, Colombia, Ecuador, Peru, Switzerland and the U.S. with aiding her office’s inquiry. (Peruvian officials claimed in January that Odebrecht’s corruption had cost the country $283 million.)

Elias Solano, a Panamanian defense lawyer for both Fonseca and Mossack, blasted the decision to detain his clients after two days of interrogations. Panamanian law enforcement authorities searched both lawyers’ homes Friday and searched the offices of Mossack Fonseca on Thursday. Calling the case against Fonseca and Mossack “weak,” Solano vowed to fight the case. Local news reports cited Mossack Fonseca lawyer Edison Teano and legal director Sara Montenegro as also being under investigation.

Despite a dearth of American clients in the “Panama Papers” leak at Mossack Fonseca, the hack of the firm’s files laying bare its ties to oligarchs, dictators and other rebarbative individuals led many U.S. firms to express concerns about their own cybersecurity. The disclosure of Mossack Fonseca’s internal files—by an anonymous whistle-blower who in an 1,800-word manifesto last year cited growing income inequality for their actions—also raised questions about the ethical obligations of U.S. lawyers in taking on certain foreign clients.

The Daily Business Review, a sibling publication, reported last year on the Mossack Fonseca disclosures potentially being used as a starting point for fraud investigations. The network of companies controlled by Salvador, Brazil-based Odebrecht used to disseminate bribes reportedly includes entities represented by Mossack Fonseca. (The charges against the firm’s name partners are reportedly linked to Brazil’s wide-ranging “Lava Jato” corruption probe, also known as Operation Car Wash, which has embroiled some of the South American country’s top politicians and largest companies.)

Shortly after last year’s hack, Mossack Fonseca started a website that it states seeks to refute inaccurate media coverage about the firm and its clients. Mossack Fonseca claims that its internal documents were stolen. The firm, though its Twitter account, has continued to vigorously deny any wrongdoing.