In September 2015, Beyoncé sat on a yacht drinking sparkling wine with her legs wrapped under a striped, earth-toned blanket as the Faraglioni rocks, near Capri on Italy’s west coast, passed by.
The singer and her husband, Jay Z, paid a reported $900,000 that week to sail the Mediterranean Sea on the Galactica Star, a 65-meter private cruiser with a helipad, 10 dining areas, Jacuzzi and sun deck.
Unknown to the celebrity couple, the yacht’s owner was soon to be a wanted man.
Held through a shell company created by the law firm at the heart of the Panama Papers scandal, Mossack Fonseca, the yacht is now caught up in a massive investigation in Nigeria. The government claims the yacht was bought with profits from crude oil sales that were diverted and never paid to authorities.
The Galactica Star’s owner is Kolawole Aluko, a petroleum and aviation mogul who is one of four defendants accused of helping to cheat Nigeria out of nearly $1.8 billion owed to the government on massive sales of oil. In a separate investigation, Nigerian authorities are also reportedly probing whether Mr. Aluko helped smuggle millions of dollars out of the country as kickbacks to Nigeria’s former petroleum minister, Diezani Alison-Madueke.
Mr. Aluko is part of a constellation of Nigerian oil executives, state governors, cabinet ministers, military officials and tribal chiefs within the Panama Papers. Mossack Fonseca, a Panama-headquartered law firm with offices around the world, worked for three former Nigerian oil ministers who used companies to buy boats and homes in London, the records show.
The prevalence of Nigerians within the Panama Papers may be no coincidence. Nigeria loses more money from illicit activity, including graft and corporate tax abuse, than any other African nation, research by anti-corruption groups indicates. As much as 12 percent of Nigeria’s annual gross domestic product is lost to illicit financial flows, according to Oxfam.
“Our firm, like many firms, provides worldwide registered agent services for our professional clients (e.g., lawyers, banks, and trusts) who are intermediaries,” Mossack Fonseca told ICIJ. “As a registered agent we merely help incorporate companies, and before we agree to work with a client in any way, we conduct a thorough due-diligence process, one that in every case meets and quite often exceeds all relevant local rules, regulations and standards to which we and others are bound.”