A SUBSIDIARY of the law firm Mossack Fonseca (MF),whose principals had  advisory roles to the present Panama administration,  was used for tax evasion says a former employee.

Attorney María Mercedes Riaño, who is being investigated for money laundering by the Public Prosecutor's Office, said that Mossfon Trust, a subsidiary of Mossack Fonseca was used to perform the role.

Riaño, who ran the firm's office in Brazil, made the statement Feb. 15 to anti-corruption prosecutors investigating the firm.

That testimony was released to the public on Thursday March 3.

Riaño said that the firm specifically sold companies to clients from jurisdictions that "were off the blacklist of the OECD," which were used as intermediaries to raise funds from clients and then" transferred to accounts of traditional companies that came from blacklisted jurisdictions."

The OECD, or Organization of Economic Cooperation and Development, has often targeted

jurisdictions such as Panama which   has been widely criticized for its failure to evenly apply rules, and MF apparently took advantage of this, reports La Prensa.

Brazilian investigators are looking into MF's practices in that country as part of the Lava Jato operation. that has uncovered bribes that were paid to state officials in exchange for contracts. MF is accused of helping to facilitate those payments.

In her testimony, Riaño said that the firm "knew who the final beneficiaries of the bank accounts were and where the money came from."

This testimony contradicts the public statements by the firm, in which it insisted that it never knew what its companies were used for.

But Riaño said that not only did the company know, it also actively sought to create "the most sophisticated tax structures for tax evasion."