Men at the center of Panama Papers scandal arrested

View of a sign outside the building where Panama-based Mossack Fonseca law firm offices are in Panama City

Story highlights

  • Arrests were related to Brazilian bribery scandal
  • Ramón Fonseca and Jürgen Mossack both say they are innocent

(CNN)The two founders of the law firm at the center of 2016's explosive Panama Papers scandal are claiming innocence after they were arrested.

Ramón Fonseca and Jürgen Mossack both face charges of money laundering after authorities raided the firm's Panama City headquarters last Thursday. The investigation of the firm and subsequent raid were related to "Operation Car Wash," an investigation into a sprawling Brazilian bribery scandal.
    In a statement, the Attorney General of Panama Kenia Porcell said the firm allegedly worked with contacts in Brazil to "destroy evidence related to those implicated" in the bribery scandal.
    "In short: Money from bribes circulate through various places to return laundered to Panama," she said.
    Fonseca and Mossack both say they're innocent. Fonseca released a statement saying the actions of the authorities are "an attempt to divert the attention" away from other cases.
    "In the more than ten months since the beginning of this investigation, caused by a suspiciously unreported crime committed against our firm, they have not presented a single piece of evidence that shows us guilty," he continued.

    Connection to Panama Papers

    In April 2016, Mossack Fonseca was connected to a huge leak of documents that seemed to reveal a large collusion of global power players who were set up with secret offshore companies to hide money. The network included then-Icelandic Prime Minister Sigmundur David Gunnlaugsson and Russian President Vladimir Putin.
    At the time, Mossack and Fonseca claimed they had done nothing illegal.
    "The facts are these: while we may have been the victim of a data breach, nothing we've seen in this illegally obtained cache of documents suggests we've done anything illegal," a statement provided to CNN at the time said.