US Alleges Honduras President’s Brother is Major Drug Trafficker

0
Prosecutors in the United States allege that the brother of the president of Honduras is a major drug trafficker in Central America, providing further evidence that the country’s political elites play an active role in the drug trade. Federal authorities in Miami arrested former Honduran congressman Juan Antonio “Tony” Hernández November 23 on drug and weapons charges. Antonio Hernández is the brother of current Honduran President Juan Orlando Hernández. Prosecutors say Antonio Hernández is a “large-scale drug trafficker” who worked in Colombia, Honduras and Mexico. A criminal indictment obtained by InSight Crime says that he imported “multi-ton loads of cocaine” into the United States for more than a decade.  The arrest comes less than a year after Devis Leonel Rivera Maradiaga — a former leader of the once powerful “Cachiros” criminal group — testified that he paid Antonio Hernández $50,000 in bribes.  The exchange ensured that the government paid a debt to a company that the Cachiros used to launder drug proceeds, according to the indictment.

SEE ALSO: Honduras News and Profiles

Just months before that, US authorities in Miami considered Antonio Hernández a “person of interest” in a high-profile drug trafficking investigation linked to Wilter Blanco, the suspected leader of the Atlantic Cartel. Reacting to his brother’s arrest, President Hernández said that “nobody is above the law.” He added that he hopes the justice system will clarify whether these accusations are true. President Hernández is not the only Honduran head of state from the ruling National Party to have family members with alleged ties to the Cachiros’ drug trafficking operations. In September 2017, US authorities sentenced Fabio Lobo, the son of former President Porfirio Lobo, to 24 years in jail for conspiring with the criminal group to traffic cocaine into the United States.

InSight Crime Analysis

Perhaps the most surprising thing about this indictment is that it comes as no surprise. The Cachiros wove Honduras’ political elites tightly into their criminal modus operandi, and the case of President Hernández’s brother is no exception. Juan Antonio Hernández wasn’t a small-time drug trafficker. He was allegedly involved in every step of the cocaine trade: processing, receiving, transporting and distributing. The former congressman had such a prominent role that his initials, “TH,” were allegedly stamped on some of the cocaine shipments he handled. Drug loads were protected by members of the national police, which he called upon to act as heavily armed security, according to the indictment. He also afforded other drug traffickers protection through his political connections.  Not only did he pay enforcement officials for information critical to protecting drug shipments, but he also served as a conduit for large bribes paid by major drug traffickers to high-ranking Honduran politicians, according to the indictment.

SEE ALSO: Honduras Elites and Organized Crime

It’s unclear what Antonio Hernández’s arrest means for US-Honduras relations. President Hernández is the United States’ main ally in Central America. The North American nation backed Hernández even after his bitterly contested reelection victory was marred by allegations of electoral fraud. At home, President Hernández is already in the crosshairs of anti-corruption prosecutors in the Attorney General’s Office and the internationally-backed Support Mission Against Corruption and Impunity in Honduras (Misión de Apoyo contra la Corrupción y la Impunidad en Honduras – MACCIH) regarding his alleged role in diverting millions of dollars of public money for political purposes. The United States is one of the major funders of the MACCIH, but it remains to be seen if the arrest of the president’s brother and the ongoing investigation into Hernández’s alleged criminal activity will alter the relationship of the two nations.

Netflix’s Cocaine Coast: Drugs, Spain and Central America

0
Relying on a formula that has become an entertainment industry darling, Netflix has once again produced a series featuring a group of men who strike it rich by trafficking cocaine — this time in Spain. The smugglers lives — from hardscrabble beginnings — parallel those of traffickers in Central America and other regions, showing that if you’re familiar with the routes, it’s easy to go from fish to fariña. “Don’t look at me. I can barely read,” said a bearded man dressed in shabby clothes in a court hearing. The man’s name was Laureano Oubiña, and he stood accused of being one of the biggest drug traffickers in Spain’s autonomous region of Galicia. Manuel Charlín, another trafficker who pled innocent in the same hearing, said: “I’m just a businessman … I make my living from my sardine canning factory.” These scenes portray a Spanish federal court case in 1990 against several Galician drug traffickers following a police raid called Operation Necora (Operación Nécora, literally “Operation Velvet Crab”). The traffickers were the first to introduce Central American and Colombian cocaine to Spain. Baltazar Garzón was the judge who tried the case. He later issued a warrant for the arrest of former Chilean dictator Augusto Pinochet. The operation and court case figure into the Netflix series Cocaine Coast, or Fariña in the original Spanish version, which was produced in Spain and based on journalist Nacho Carretero’s book by the same name. The book became a bestseller despite being partially banned by a court order. Like so many others of its kind, the series abounds in the classic myths surrounding drug trafficking, including the figure of the trafficker acting as a Robin Hood-esque public benefactor, or the dichotomy of corrupt versus honorable police officers. Cocaine Coast, however, fleshes out those myths with painstaking depictions of the experience of declining Spanish coastal life at the time. Smugglers find themselves with few economic opportunities in rugged, distant lands and are inevitably susceptible to further corruption. They see an easy way to make money through illegal markets, going from smuggling cigars and seafood to cocaine, or “fariña,” the drug’s Galician moniker due to its likeness to flour. At times, it can seem like some characters or scenes are exaggerated, but they are not. Men like Oubiña and Charlín existed. They were shippers, born into remote communities before becoming drug traffickers. They are akin to the drug traffickers who became the everyday picaresque icons of Central America: arrogant, clever and violent, while always seeming to escape their comeuppance. Having covered the history of drug trafficking in El Salvador and Honduras over the course of this century in my work, I can say definitively that the Central Americans and their Galician counterparts have many aspects in common. Here are four of them:

1. Remote and Isolated Geography

Difficult geography lends itself to the transformation from shipper to drug trafficker. El Salvador has the Perrones cartel, which operates in the country’s east, near the mangrove-laden Gulf of Fonseca on the Pacific Ocean. In Honduras, the mountains of the Yoro and Olancho departments, which descend to the Atlantic, play host to the Cachiros. An apt counterpart for such lawless territories in Galicia would be the Ría de Arousa, with its many peninsulas and islands, where a little money goes a long way in corrupting border guards. Charlín, Oubiña and their boss, Sito Miñanco, got their start in tobacco smuggling. In Central America, the Perrones cartel’s Jose Natividad Luna Pereira, alias “Chepe Luna,” and Reynerio Flores Lazo smuggled cattle and dairy products from Nicaragua to El Salvador before expanding into drugs. What unites them is the unforgiving terrain that allowed them to establish themselves. Luna and Flores were smuggling kings ruling over dusty routes that no one knew like they did.

2. Corrupt Guards

Perhaps the ultimate ubiquitous characteristic of drug smuggling — be it in Central America, Galicia, Mexico or Afghanistan — is the extent to which it depends on corrupt government authorities to function. Law enforcement, judges, mayors, border control, all employ individuals who have the potential to be bribed into contributing to the passage of cocaine over international borders, whether by turning a blind eye or becoming full-fledged criminals themselves. In my book Infiltrados on organized crime’s penetration of the Salvadoran police force, I describe how smugglers, such as El Salvador’s Perrones and Guatemala’s Lorenzanas, went from bribing local police officers in small towns to funding the election campaigns of mayors and presidents. “We were paying informants in the customs departments, and they told us something big was coming. Reynerio was dealing with more drugs and money. The problem was that the government needed to have something to show. They gave Reynerio a sort of political collection notice. They pressured him into contributing to the [political] campaign, but he refused, so they billed him,” said one of the advisors closest to Reynerio, the boss of the boss of the Perrones.

3. Culture of Flamboyance and Boastfulness

One of the surest signs of just how far some drug smugglers get without being brought to justice is how much wealth they amass — and how they spend it. Cocaine Coast takes pains to recreate designer 1980s decorations and fashion, capturing the luxurious lifestyles the Galician drug traffickers eventually maintained. Granted, they were not as extravagant as Pablo Escobar with his zoos, but many did not shy away from spending their money on luxury vehicles, gold chains and above all property. When the Galicians went to court in 1990, they had a strategy to downplay their wealth: dress poor, the idea being to sell the judge that they were honest, struggling businessmen, starting from nothing. The reality was they were swimming in money.

4. The Never-Ending Market

“It will never end. As long as a gringo is involved, it won’t end,” said a fictionalized Pablo Escobar in another series, El Patrón del Mal, to one of his henchmen after the police seized a shipment of his drugs. Oubiña — the Galician drug trafficker whom the Cocaine Coast character is based on — said something similar in an interview with a Spanish television station when he was released from prison after serving a 22-year sentence for drug trafficking: “No one has a gun to his head to get involved with drugs.”

New Corruption Case More Trouble for Embattled Former Honduras President

0
A new investigation has involved Ramón Lobo Sosa, brother of former Honduras President Porfirio Lobo, in a corruption scheme that diverted funds from the president’s party to private individuals. This case further cinches the net around Lobo and his circle of loyalists, who are suspected of drug trafficking links. On November 5, the Honduras Attorney General (MPH) filed an indictment with the Supreme Court against Ramón Lobo Sosa and Walter Francisco Cerrato Durón, former secretary of state for the administration and financial management of the president’s office. It stated that they were instructed to create “a framework to divert public money that was initially intended to use the security costs of the presidential household for personal benefit.” The MPH investigation carried out jointly with the Mission Against Corruption and Impunity in Honduras (Misión de Apoyo contra la Corrupción y la Impunidad en Honduras – MACCIH), indicated that Lobo Sosa and Cerrato Durón embezzled around $350.000 (8.4 million lempiras).       SEE ALSOHonduras News and Profiles Cerrato Durón, who held the rank of minister, was the administrator of funds for use at the discretion of Porfirio Lobo during his entire presidential term (2010-2014). On January 21, 2011, Cerrato Durón opened two bank accounts from which he would run the security costs for the presidential household, budgeted at around $1.7 million (40 million lempiras). From these two accounts, between 2010 and 2014, Cerrato Durón signed 84 checks for two individuals, now witnesses in the investigation, who have been identified by the MPH as Omega 1 and Alpha 1. Neither of these two individuals had any contract nor were they employed by the Honduran state, making the payments illegal, according to authorities. Ramón Lobo, the president’s brother and accused by a member of the Los Cachiros drug trafficking gang of having collaborated with them, was in charge of endorsing the checks of the presidential household after depositing them in a personal account.

InSight Crime Analysis

This new case is being used by the MPH and the MACCIH to escalate legal pressure on the ex-president Porfirio Lobo, a veteran politician from the ruling National Party and whose family is facing multiple accusations of having collaborated with the most important organized crime groups in Honduras. Fabio Lobo, his son, has been accused of being an accomplice of Los Cachiros. Rosa Elena de Lobo, the former first lady, is being investigated for potential embezzlement of $500,000. The latest investigation further confirms the deep infiltration of corruption and organized crime among Honduran political elites. But this case also points to embezzlement having taken place within the heart of the Honduran presidency, which was unclear until now. In neighboring El Salvador, the misuse of funds by the office of the president has led to two corruption cases against former presidents, Antonio Saca and Mauricio Funes. Between them, according to the indictments, just over $700 million were embezzled, equivalent to the country’s fiscal deficit in 2017. Saca is now serving a 10-year sentence for corruption and Funes is a fugitive from justice. In the Honduran case, the MPH and MACCIH have been investigating the links between the Cachiros and other drug trafficking groups with political elites, as well as cases of corruption implicating national deputies from across the political spectrum. However, this is the first case to reach the epicenter of political power.

3 Crime Factors Driving Northern Triangle Migrants Out

0
Thousands of men, women, and children from Honduras, Guatemala, and El Salvador are marching through Mexico, trying to reach the United States, but why are they fleeing? While poverty, climate change and a lack of economic opportunities are among the main reasons for people to leave their countries in search of a better future, crime and corruption are also high on the list.

1. Rampant Crime and Violence

El Salvador, Honduras, and Guatemala — often collectively referred to as the Northern Triangle — have a plethora of gangs who extort businesses and individuals, recruit minors, and murder those who cross them. Adding to the danger is the fact that the gangs are also involved in local drug sales, meaning their turf battles turn violent rapidly. Although homicide rates in all three countries have dropped in recent years, the Northern Triangle still tops of the list of the world’s deadliest regions outside a war zone. This is largely due to the reach and power of region’s most prominent street gangs, the Mara Salvatrucha (MS13) and the Barrio 18, who exert control over mostly poor neighborhoods and fight for control of territory and commercial space to secure more revenue streams. These battles happen in public spaces where millions of people live, work, and commute. In 2014, for example, more than 400 people died, most of them bus drivers and their assistants, in attacks against the public transport system in Guatemala. Extortion of the public transport system is a perennial source of money for the gangs. In effect, gangs are so pervasive they create an invisible but powerful border in some of even the smallest towns, deterring families from visiting their relatives, going to school, or taking a job in a place controlled by the rival gang.

SEE ALSO: The MS13

Extortion is also breaking the backs of the poorest in the region. It costs Salvadorans $756 million a year, according to a group of investigators with the Central Bank of El Salvador. In Honduras, La Prensa reported that locals pay an estimated $200 million in extortion fees annually. Most of the victims are poor and small businesses. People threatened by gangs often find themselves without refuge within their own countries. And decades of gang control across the most populous areas has “worn people out psychologically,” Douglas Farah, a security expert on Central America, told InSight Crime. All of these leads to a near constant stream of people seeking refuge. According to a 2016 report by the American Immigration Council, Central Americans who described themselves as victims of violent crime were more likely to say they had plans to emigrate than those who had not been victims. And interviews with 322 child migrants returned to El Salvador found that about 60 percent of them said that they had fled because of gang threats or violence, according to research done by Elizabeth Kennedy, a Fulbright Fellow, in 2014. Nearly 200 said that they had at least one gang in their neighborhood. More than 100 said that they had been pressured to join a gang, and 22 said they were assaulted after refusing.

2. Broken Institutions, Impunity

Central American residents have little faith in the authorities tasked with protecting them. This stems from a combination of under-resourced and poorly-trained security forces, and sky-high impunity rates for corruption and abuses. Of the 69 countries assessed in the 2017 Global Impunity Index, Honduras and El Salvador ranked 12th and 13th, respectively. Guatemala was 19th. High impunity rates “play a huge factor into feeding hopelessness,” said Farah. When crimes are not prosecuted, it reinforces the belief that authorities are corrupt and that criminal groups control them. In Honduras, for example, the national police commissioner was arrested in October and accused of money laundering, among other crimes. In other cases, the authorities show a complete disregard for rule of law. Security forces tasked with tackling gang violence in El Salvador, for instance, have been accused of extrajudicial killings. The result is that people often take matters into their own hands. Guatemalans in Villa Nueva, just south of the capital, responded to the lack of police protection by forming a self-defense group. In July, the group took to the streets, carrying high-powered weapons, after gang members murdered two residents, according to Prensa Libre.  In the end, without rule of law, many people flee.

3. Corruption at Highest Levels

Corruption in the Northern Triangle reaches the highest levels. The cases include two former presidents in El Salvador, one who is accused of embezzling $351 million from government coffers and the other of stealing some $300 million of public funds. In Guatemala, President Jimmy Morales is currently embroiled in an illicit campaign finance scandal. His predecessor, Otto Pérez Molina, resigned over his alleged involvement in a massive corruption scheme within the country’s customs agency. And in a recent investigation, InSight Crime revealed that his predecessor, Alvaro Colom, took campaign contributions from drug traffickers.

SEE ALSO: Elites and Organized Crime

In Honduras, prosecutors in June accused 38 government officials of misusing more than $12 million of government funds for political purposes. Some of the money allegedly went to a program that was part of President Juan Orlando Hernández’s first bid for office in 2013. The cases have led to protests and some successful prosecutions. But for many, it is not enough, and they leave.

Arrests of Honduras Police Reveal Setbacks in Purge

0
The arrest of high-ranking Honduras police officers accused of having criminal network ties illustrates the challenges the government will have to tackle if it wants to successfully complete the purging of its police forces. On October 9, the Honduran Attorney General’s Office announced the arrest of National Police Commissioner Lorgio Oquelí Mejía Tinoco and another 15 police officials, some on active duty and some who had already left the force or lost their positions. Those arrested stand accused of participating in a cattle trafficking network during the commissioner’s previous tenure as head of the police force in Choluteca department, on the Nicaraguan border. At least three of the officers allegedly involved had already been let go as part of a purging process that began in 2016. More than 5,000 police employees have left the institution as a result of the purge, and another 2,000 are still being investigated. The Attorney General’s Office is accusing Mejía of money laundering, bribery, illicit association and creating a “criminal structure” that charged cash bribes to allow transporters to move cattle without being stopped at police checkpoints. InSight Crime learned that some of the cattle entered Honduras illegally from Nicaragua.

SEE ALSO: Honduras News and Profiles

A later report from El Heraldo also indicated that Commissioner Mejía might be linked to the landing of a small plane loaded with drugs in Choluteca while he headed the department’s police force. At the time the arrests were made, more than 31 assets were seized including seven homes, six vehicles and more than 20 bank accounts. Authorities are still to reveal more information about the massive amount of medications and medical supplies found in one of Mejía’s properties when it was raided. The commissioner must now explain the origin of nearly 17 million lempiras (more than $700,000) found in his possession that do not correspond to the monthly salary of approximately $2,000 he received over the last two years. The commission in charge of the police purging process appointed Mejía as deputy police commissioner in May 2016. In 2018 he was promoted to commissioner, the highest position in the institution.

InSight Crime Analysis

While the process enacted to purge Honduras’ police force has had some success since it began in mid-2016, it has also had its fair share of scandals and criticism. The situation involving Commissioner Mejía underscores some of the shortcomings in the process and raises concerns about the possible participation of other current police leaders in criminal activities. It is a wake-up call that police reform in Honduras remains an unfinished task that requires significant improvements in transparency, institutional coordination and political will if it is to be achieved. Despite Honduran law requiring that public officials declare their assets annually before the country’s Superior Accounts Tribunal (Tribunal Superior de Cuentas – TSC), Mejía managed to fly under authorities’ radar for years. Moreover, this is not the first time authorities have identified police officers on active duty who were supposed to have been purged from the ranks. In July media outlet La Prensa reported a case in which a detective continued to receive his salary of 21,000 lempiras (nearly $900) a month despite having been dismissed for alleged links to drug trafficking. In this and other cases, one way that police officials have managed to obstruct dismissal proceedings is by arguing that they are protected under Honduras’ old organic police law.

SEE ALSO: Coverage of Police Reform

To such roadblocks in purging the police can be added structural difficulties in both the institution itself and other governmental bodies. Conflicts of interest are commonplace, such as the police force investigating itself. And the selection process for Honduras’ attorney general ensures that the Attorney General’s Office often has its hands tied when it comes to independently investigating and pursuing cases, as evidenced in the paltry number of convictions it has secured for some of the country’s most important cases. One bright spot is that Honduras has strengthened its money laundering laws. Recent sentences of up to 15 years were leveled against former police officers with lower ranks than Mejía in a case of illicit enrichment involving only a fraction of the money allegedly tied to the commissioner. With the country’s new legislation possibly bringing sentencing up to 20 years, it is no wonder that so many purged police officers implicated in crimes are jumping at the chance to be extradited to the United States — where they often receive much less jail time — to face their charges. Such was the case of a Honduran police officer who was sentenced to five years in prison in the United States for trafficking cocaine there. In another case, Carlos Valladares, former regional commander of Honduras’ now-defunct special criminal investigation unit (Dirección Nacional de Investigación Criminal – DNIC) in the city of San Pedro Sula, was recently sentenced in the United States to 14 years in prison. The charges against Valladares were related to his involvement with the Cachiros drug trafficking group, with the United States alleging that he worked for them as a hitman. Image credit: Esteban Felix/AP

In Berta Cáceres Murder Trial in Honduras, Prosecutors Will Fall Short*

0
The murder trial of environmental activist Berta Cáceres in Honduras could open a small window into the nexus between criminal networks and elites, but will more likely illustrate just how difficult it is to prosecute powerful families.

Correction: An earlier version of this article falsely connected the Atala Faraj family to DESA and the Agua Zarca project. Neither the family nor the bank Ficohsa has anything to do with DESA or the Agua Zarca project. InSight Crime regrets the error. 

The trial starts September 17, two-and-a-half years after armed gunmen stormed the home of the indigenous environmental rights leader in the city of La Esperanza in southwest Honduras, killing her and wounding Mexican environmentalist Gustavo Castro. The case caught the attention of international activists and governments alike. Cáceres long fought for the rights of indigenous groups and environmental activists and received the highly regarded Goldman Environmental Prize in 2015 for her work against the Agua Zarca Dam project that threatened indigenous Lenca communities living along the Gualcarque River. Latin America consistently ranks as the world’s most murderous region for environmental defenders, and land activists are more likely to be killed in Honduras than almost any other country in the region. But the case also gives us a glimpse into the Honduran underworld where elite families mingle with criminal networks. The question remains: How much will authorities talk about those ties? The Honduran government has already been heavily criticized for their mishandling of the case, and the family in question has powerful friends.

Who’s on Trial and Who’s Not

In total, eight men will stand trial. Security forces in Honduras first made four arrests in connection to the activist’s murder in March 2016. Two of the men, Sergio Ramón Rodriguez and Douglas Geovanny Bustillo, are former employees of Desarrollos Energéticos SA (DESA), the company that was building the dam.

SEE ALSO: Honduras News and Profiles

By the middle of January 2017, authorities made four more arrests, including those of former Honduran soldiers Henry Javier Hernández Rodríguez and Edilson Atilio Duarte Meza. Authorities arrested a ninth individual, Roberto David Castillo Mejía — DESA’s executive director at the time of Cáceres’ death — in March 2018. Castillo Mejía is in pre-trial detention, but it’s unclear when and if he will face trial.  No charges have been filed against the owners of DESA, the powerful Atala Zablah family, who deny having any involvement in Cáceres’ murder. The family owns numerous businesses and has longstanding political influence. “There’s been a fraudulent campaign to link innocent people to a capital crime with absolutely no evidence … This is an economic attack against entrepreneurs trying to bring jobs to Central America,” DESA’s lawyer, Robert Amsterdam, told the Guardian.

A Bellwether for the Justice System

The investigation has been a bellwether for the Honduran justice system and has been scrutinized at every turn. From the beginning, there were accusations of mismanagement of the evidence both at the scene and thereafter. In an embarrassing turn of events just months after Cáceres’ murder, an appellate court judge was allegedly stopped by two vehicles who proceeded to rob her of her car and the case file. The judge reportedly took the case file from her office in order to further analyze it at home. National and international organizations have also criticized the handling and sharing of key evidence in the murder case. Cáceres’ family and private prosecutors have filed four court orders and requested, on more than 30 occasions, that the prosecution share crucial information with her family. The Civic Council of Popular and Indigenous Organizations of Honduras (Consejo Cívico de Organizaciones Populares e Indígenas de Honduras – COPINH), which Cáceres founded, has also denounced the Attorney General’s Office’s mishandling of the case. To be sure, it’s possible that dozens of electronic devices seized by authorities were never analyzed at all, according to a recent report from Truthout. “It’s a form of denial, of refusing to determine what is really behind the murder,” Cáceres’ daughter Berta Zúñiga Cáceres, now COPINH’s general coordinator and a member of an opposition political party, told Truthout regarding the holes in the evidence.

Cutting Prosecutions Short

Despite it all, the Honduras Attorney General’s Office has taken this case further than most murder trials. And with the arrest of DESA’s executive director, prosecutors appear to be knocking at the door of the Atala Zablah family. Still, activists and their allies are likely to walk away unsatisfied, no matter the verdict, unless prosecutors find some way to connect the powerful family. In the meantime, they are happy to push their own theories.  “The owners of DESA killed my mother,” Zúñiga Cáceres flatly told the Associated Press. Others have done their own investigation of the case. An October 2017 report from an independent group of experts claimed that Cáceres’ murder was a coordinated plot made months in advance by senior DESA business executives and Honduran officials.

SEE ALSO: InDepth Coverage of Elites and Organized Crime

The existing evidence is “conclusive regarding the participation of numerous state agents, high-ranking executives and employees of DESA in the planning, execution, and cover-up of the assassination,” the report found. While Honduran authorities have allegedly arrested several of those thought to be material authors in Cáceres’ murder, Castillo Mejía is the only alleged intellectual author to be arrested in connection to the crime. “The [independent group] report asserts that, to date, the Honduran judicial system has failed to bring charges against the intellectual authors of the crime, although the investigators … could determine that the eight men charged were taking orders from higher-ups,” Lisa Haugaard, the executive director of the Washington, DC-based Latin America Working Group, told InSight Crime at the time of the report’s publishing. *Correction: An earlier version of this article falsely connected the Atala Faraj family to DESA and the Agua Zarca project. Neither the family nor the bank Ficohsa have anything to do with DESA or the Agua Zarca project. InSight Crime regrets the error.

Honduras Top Cop Killed for Cachiros: US Prosecutor

0
Revelations from a drug trafficking case in New York illustrated the depth of police collusion with criminal groups in Honduras, which included murdering rivals and safeguarding drug loads. The information emerged in the case against Carlos Alberto Valladares Zúñiga, a former Honduran police official facing sentencing in the Southern District of New York. As part of the accusation, Assistant US Attorney Emil Bove said Valladares —who was a regional commander of the special criminal investigations unit (Dirección Nacional de Investigación Criminal – DNIC) in San Pedro Sula— committed murder for the once powerful Cachiros drug trafficking organization, reported La Prensa. “The defendant’s conduct was not limited to simply helping transport narcotics or providing information to drug traffickers,” Bove wrote in a September 10 letter addressed to the judge in the case. “The defendant participated in several murders in furtherance of the drug-trafficking conspiracy.” On one occasion in October 2011, Valladares mounted a death squad partly composed of police officers to assassinate a Cachiros’ rival known as “El Sapo,” or “The Toad.” The former Honduran cop drove the then-Cachiros leader Devis Leonel Rivera Maradiaga “so they could witness a mass attack on rival drug traffickers,” reads Bove’s letter. In a scene resembling that from a Hollywood movie, after arriving at the point of attack, the two men watched from a safe distance as a firefight left six dead. “You’re about to hear what war sounds like,” Valladares told Rivera Maradiaga, according to La Prensa. Valladares, who pleaded guilty in May 2018 and admitted to conspiring with the Cachiros for nearly a decade, also recruited between eight and ten police commissioners for the Cachiros, according to El Heraldo. Once on the Cachiros’ payroll, these commissioners were tasked with ensuring the safe passage of drug shipments. Valladares is among several former Honduran police officers to face US charges stemming from the testimony of Rivera Maradiaga, whose cooperation with the DEA has rocked Honduran elites and landed the son of former President Porfirio Lobo in jail. Last month, in a letter to the judge in charge of the case, Valladares’ defense attorney admitted that his client “made the terrible mistake of doing favors for the people who controlled drug trafficking with the active assistance of the Government of Honduras.” But the attorney argued that there was “no turning back” once the initial mistake had been made and asked for a lighter sentence of five years, rather than the 14 to 17.5 years the government prosecutor Bove recommended. “It is clear that if he did not continue to work with Leonel Rivera and his associates, he would have been deemed a security risk and murdered,” the defense lawyer’s letter reads.

InSight Crime Analysis

The depth of corruption revealed by Bove’s letter and the case, in general, is striking. By using even the highest ranks of the national police as recruitment pools to carry out the Cachiros’ dirty work, Valladares illustrated what could be considered the deepest possible level of collusion between police and organized crime. Valladares’ is not an isolated case. In 2014, the government shut down the entire DNIC and suspended its 1,400 employees due to suspected collusion with criminal groups.

SEE ALSO: Honduras News and Profiles

Such profound corruption has not disappeared in recent years. A special commission has purged over 5,000 police officers since 2016, many on suspicion of corruption. Omar Rivera, the head of the commission, recently told InSight Crime that police ties with organized crime in the country were “historically institutionalized.” Rivera called it “a fraternal relationship.” Despite the gravity of the situation, the political will needed to lastingly deal with corruption appears lacking. Honduran President Juan Orlando Hernández had promised to tackle the issue during his campaign in 2017, but his contested reelection has left him with little political capital. What’s more, Hernández’ own brother has been implicated by Rivera Maradiaga’s court testimony.

5 Ways the MS13 Launders Money

0
A number of recent operations have revealed that the MS13 has developed a financial structure that’s helped them increase their income. But how does the gang weave its dirty money into the legal market? Extortion has traditionally been the main source of income for gangs like the MS13. More recently, these groups have ventured into other criminal markets, including unsuccessful attempts at becoming increasingly involved in international drug trafficking, which has helped beef up the gang’s financial muscle.

SEE ALSO: MS13 News and Profile

This new method of making money has forced every “clica” — or cell —  to find a way to efficiently manage its growing resources. In the past, the money was used to maintain the gang’s criminal activities, pay members and purchase weapons and vehicles, as well as implement different money laundering schemes. Up until now, these methods have proven quite rudimentary, as InSight Crime detailed in a recent investigation. These new money laundering schemes don’t just represent a new source of income for the MS13 — which in some cases, such as with motels, can exceed proceeds from extortion and microtrafficking — but they have also helped strengthen the presence of organized crime in the legal economy and increased the gang’s economic, political and social control in the communities in which they operate. Below, InSight Crime highlights five of the main ways in which the MS13 launders money throughout the region:

1. Auto Theft and Resale

Since the early 1990s, stealing and reselling used cars has been one of the primary ways in which the MS13 launders money. Although this method has traditionally been limited to the gang in El Salvador, in most cases the cars come from the United States, Mexico and Honduras. The cars are then sold and legalized in the used and restored car market in the Central American nation before they are later sold in used car lots. The theft and sale of cars was an important aspect of “Operación Jaque” (Operation Check), which authorities in El Salvador carried out against the MS13 starting in 2016. During the operation, authorities arrested Dennie Antonio González Mirando, who, according to the country’s former head of customs (who was also linked to the case), had imported more than 2,000 used cars into the country and committed a series of administrative- and contraband-related crimes. González Mirando has since been released.

2. Shell Companies and Property

Investing in property continues to be one of the preferred money laundering methods for criminal groups throughout the region. This is largely due to the fact that there are few regulations on financial transactions in this business, and it also allows criminal groups to move large quantities of money in one single transaction. In one operation against the MS13’s finances this year in El Salvador, prosecutors said that the gang now had a network of shell companies to launder money. The shell companies — ranging from hotels, bars, restaurants, parking lots and brothels — which at times are used as legitimate businesses, are in some cases created from scratch. They even return the “investment” and the profits “as if they were partners” with the gang, according to El Salvador National Police Director Howard Cotto. In addition, some of these properties, such as motels, are also allegedly used as meeting points for the gang to hide out or commit murders.

3. Small Businesses

Another thing Operation Check revealed was that many small businesses that had for years been extorted by the gangs were also being used to launder the gang’s money. This shifted the previously parasitic relationship between extortionists and those being extorted to a more symbiotic one. The gang acquires the products that are later sold at a higher price in local clothing, food and liquor stores typically located in central plazas. The gang can demand up to 70 percent of the profits made.

4. Loan Sharking

Another money laundering technique used by the MS13 in some areas of Honduras is loan sharking — lending money to individuals at very high interest rates, also known as “gota a gota” (drop by drop) — allegedly in coordination with Colombian organized crime groups. Illegal loan sharks can typically charge a daily interest rate of up to 30 percent to local business owners in various Honduran cities like the capital Tegucigalpa, San Pedro Sula and La Ceiba. Some of these groups have also ventured into laundering money through the sale of illegal lottery tickets and other betting games. At times their earnings can surpass those of official lotteries. Paying late or failing to pay all together can result in threats, assaults and even death.

5. Money Transfers

Yet another way in which the MS13 launders money is through the official financial system, either by making small deposits into bank accounts, asking victims to make electronic transfers or through other financial intermediaries like Western Union. A 2013 investigation published by El Faro showed how the gang used a remittance service — offered by the cell phone service provider Tigo and known as Tigo Money — to collect extortion payments locally and from abroad. The only conditions to use the service, which allows for transfers of up to $750 per month, were that the sender and receiver had a Tigo sim card and an identification card. The diversification of bank accounts and entities where the money is transferred, by using the bank accounts of those closest to the gang, for example, is a crucial part of this money laundering method in order not to raise the suspicions of financial intelligence institutions.

In Honduras, a Congressman’s Threats Scream of Desperation

0
A congressman in Honduras has blamed a prominent Honduran NGO for the decision by members of the US Congress to request an investigation of his alleged ties to drug traffickers, highlighting how elites often employ tactics of diversion and delegitimization when put in legal jeopardy. In an August 2 interview with the television news channel TN5, Óscar Nájera, a long-serving congressman from the department of Cólon, reacted to the request from the US Congress by criticizing the Association for a More Just Society (Asociación para una Sociedad más Justa – ASJ), a Honduran civil society group that has worked with InSight Crime and that serves as the local chapter of Transparency International. Nájera, who belongs to the governing National Party (Partido Nacional), accused ASJ’s leaders of spurring the move by the US Congress. The congressman denied wrongdoing, and called the group “truly shameless.”

SEE ALSO: Honduras News and Profiles

The broadside came in response to an August 2 letter signed by several members of the US Congress that requested that President Donald Trump consider sanctioning six individuals accused of participating in corruption in Central America, including Nájera. The letter cited evidence suggesting Nájera had a corrupt relationship with the Cachiros crime group, a largely dismantled organization with a stronghold in Colón that was once a significant player in the international drug trade. ASJ responded on August 6 to Nájera’s rhetorical attack by releasing a statement condemning his comments. “The actions of Congressman Nájera encourage hatred and animosity by those who, like him, are being accused of having committed unlawful acts or are being prosecuted by judicial bodies in Honduras and abroad,” the organization wrote.

InSight Crime Analysis

Nájera’s response to the move by the US Congress fits into a broader pattern of elites accused of corruption trying to muddy the waters by impugning the reputations of others. InSight Crime knows firsthand what this looks like. Enrique Rais, a Salvadoran businessman whose name appeared in the recent letter from Congress, unsuccessfully sued InSight Crime Senior Investigator Héctor Silva Ávalos for defamation after Silva published articles about Rais’ alleged involvement in criminal activities.

SEE ALSO: InDepth Coverage of Elites and Organized Crime

Elites have also taken these types of counteroffensives online, utilizing “armies of trolls” to propagate messages aiming to discredit the work of those fighting against corruption and to sow doubt about the veracity of allegations against them.