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Costa Rica’s Institute on Drugs, which coordinates counter-narcotics policy, said in May it had examined 302 reports of suspicious financial transactions made during the previous year.
By Ezra Fieser / ISH
The discovery of an international money-laundering ring in Costa Rica in late June is evidence the country’s crackdown on the illicit practice is working, Public Security Minister Mario Zamora said.
Authorities are working to eliminate money laundering in the Central American country, which has become a favored spot for international criminal groups to launder their ill-gotten proceeds, he added.
On June 27, authorities were investigating a Venezuelan man and a Costa Rican lawyer when they carried out raids in the capital of San José. The men allegedly were involved in a scheme that transferred at least US$14 million through Costa Rican bank accounts.
Authorities said funds were being transferred from Venezuela to Costa Rican companies and then out of the country to the Caribbean island of Curaçao. The Costa Rican government froze the local accounts when it discovered the scheme, authorities said.
No arrests were made, but Zamora called the investigation “documented evidence that the system is reacting” to money laundering.
“This speaks highly of our capabilities,” he said.
In this case, authorities allege Venezuelan lawyer Agustín Vincente Lyon D’Angelo and his suspected accomplice in Costa Rica, Álvaro Moya, moved funds from a Venezuelan arms manufacturer with ties to several Venezuelan institutions to Costa Rica from May to June.
Venezuelan press said that Lyon had fled Costa Rica after the allegations were announced.
Costa Rica has earned the reputation of being a turnstile for illicitly acquired money in the laundering process. Criminal organizations regularly move those proceeds through intermediaries to disguise the cash’s origin.
Costa Rica’s lax regulations, especially for online entities, have led questionable groups to establish operations in the country. Last year, Costa Rican Arthur Budovsky Belanchuk was named as a key cog in an international network that moved about US$6 billion worth of illicit funds into his money wire service, Liberty Reserve. Budovsky was arrested in Spain for his connection to the alleged money-laundering scheme in May.
Zamora defended his country’s counter-money laundering mechanisms, telling reporters Costa Rica saw only US$100 million of the $US6 billion of Liberty transfers. The remainder was moved through other countries.
Costa Rican officials are investigating more financial transactions than in previous years.
The Institute on Drugs (ICD), which coordinates counter-narcotics policy, said in May it had examined 302 reports of suspicious financial transactions made during the previous year.
Banks and financial institutions report such transactions when they sense something suspicious, though the dealings can turn out to be legal in some instances.
“These are very complex cases,” ICD Director Carlos Alvarado said. “Sometimes, something can seem suspicious, but in the end there is justification for the transaction.”
A decade ago, authorities received only 24 reports of suspicious activities. But that number has grown steadily, reaching 363 reports in 2011, according to the ICD.
The rise in suspicious transactions has mirrored the spread of drug cartels in recent years. From Guatemala to Panama, criminal networks have set up shop, and countries like Costa Rica – relatively wealthy by regional standards – have become hotbeds for money laundering.
“Generally, the money comes by land from Mexico, Guatemala, Honduras, Nicaragua and Costa Rica,” said Francisco Segura, director of the country’s Judicial Investigation Agency (OIJ), which has a division dedicated to investigating money laundering. “This money generally is invested here and the profits are sent to Panama.”
But Zamora said the tools are in place for Costa Rica to combat money laundering.
“Our banking system has more information about its users than any other in Central America,” he said. “We’re improving our capacity to react and we’re not an easy in for money laundering, because the operations are being prosecuted thanks to our detection system.”