Documents leaked to OjoPúblico, a Peruvian news organization, revealed that $2.2 billion leaked into Peru’s financial system that is linked to clients with connections to criminal activities such as drug trafficking, tax evasion, corruption and illegal gold mining.
The documents, leaked by Unidad de Inteligencia Financiera (UIF), Peru’s Financial Intelligence Unit, showed that the $2.2 billion started entering the market in 1998. UIF provided OjoPúblico with the proper documents and information to create a list of 400 banks that have engaged in suspicious activities or transactions in the past including institutions and individuals accused of criminal activities by the US Justice and Treasury department. OjoPúblico chose to focus on BBVA Continental and the Banco de Crédito del Perú (BCP), two of the largest banks in Peru. An investigation on BBVA and BCP was launched that revealed cases of money laundering by organized crime groups whereby these banks showed non compliance with anti-money laundering (AML) regulations, and even Peru’s own oversight entity, the Superintendency of Banks, Insurance and Pension Funds, was shown to have taken no action in preventing these violations. When OjoPúblico asked BBVA and BCP why they accepted clients with links to criminal activities, the two banks refused to comment.
BBVA and BCP violated Know Your Customer (KYC) regulations by failing to conduct proper customer due diligence and allowing their institutions to be used to launder illicit funds into real estate, transportation and currency exchange businesses in Lima, Peru’s capital city. Sistema de Distribución Mundial, a known front company for Fernando Zevallos Gonzales, a notorious drug trafficker in Peru, was even included on the US Treasury Department’s list of “derivative designations” under the Foreign Narcotics Kingpin Designation Act but was still accepted as a client by BBVA, BCP, and Banco Wiese and allowed to move $27 million between the three banks between 2000 and 2004. In addition, an investigation by narcotic police also discovered that Zevallos, using the alias “Lunarejo,” had ordered the murder of witnesses to his crimes at the same time that his front company was depositing or transferring funds through these banks. UIF documents showed that, through Sistema de Distribución Mundial, Zevallos was able to move $20.3 million through BBVA, $1.5 million through BCP, and $5.3 million through Banco Wiese.
Another client accepted by BBVA and BCP was Chilean national, Mauricio Mazza-Alaluf, who has been linked to Peruvian currency exchange houses that are accused of laundering money for criminal groups in Columbia, such as the Revolutionary Armed Forces of Columbia. Over 150 people were involved with moving cash through these exchange houses, depositing a total of $369 million into accounts at BBVA, BCP and other financial institutions. The dirty money would then be transported through airports in Peru, Colombia, Chile and the US either in suitcases or even, in some instances, glued to a person’s body.
BBVA and BCP violated AML laws further by failing to notify the UIF of suspicious transactions within a certain time period, which was discovered after checking reports from the National Superintendency of Tax Administration (SUNAT), the money laundering unit of the Attorney General’s Office, and the leaked Panama Papers. The time period to report suspicious activity was within 30 days, but was changed recently to 24 hours in 2017. OjoPúblico noticed that many cases of suspicious activity were reported past the maximum reporting time, ranging from four months to five years after the offense had already occurred. An example of the late reporting can be seen in the case of Paul Chinchay Echevarría, a Peruvian drug dealer, and BCP client who was convicted of human trafficking in Italy but was allowed to conduct $178 million worth of transactions through BCP before the bank finally reported Chinchay for suspicious activities more than a year later and after he had been indicted and charged for other criminal activities. In the case of Velit Núñez, who was arrested for having ties to drug trafficking in 2008, the UIF had sent BBVA a warning in October 2006 regarding several frequent and unexplainable money transfers, but the bank still failed to freeze Núñez’s accounts and report any suspicious activities until after media reports on Núñez’s arrest went public.
OjoPúblico discovered that when the compliance department of BCP detected suspicious transactions, they would warn their clients by phone or by sending letters to address the situation that read, “Dear sir, we are writing to express our appreciation for the trust you have placed in us when conducting your banking transactions through the use of our institution. The aforementioned transactions are for significant amounts.” While the recipients of the letters were mostly between the ages of 20 to 23, listed as unemployed and had no prior history, they were still able to move millions in transactions over a short period of time while BCP knowingly looked the other way. In one particular case, the UIF requested that BCP send them the past banking history on José Sánchez Marín from his time as an army Colonel in the 1990’s, after receiving a suspicious transaction report from BCP in 2005 regarding large transactions that could not be supported by Marin’s income, but BCP did not have the information because they claimed that the bank was not required to keep client records for longer than 10 years.
On top of failing to conduct proper due diligence and suspicious activity reports on their customers, OjoPúblico discovered four cases in which employees at BBVA and BCP were not properly investigated for illicit activities and some were found to be connected to crime groups in high-risk areas such as Áncash and Loreto. One such employee of BCP was working as the “financial advisor” for a mafia and was able to move millions through bank transfers using front men with no financial or credit history. In 2009, Sergio Cisneros Francia, BBVA branch director in Lima, collaborated with the Global Trade Import and Export group in an attempt to transport one of the largest drug shipments in Peruvian history. Due to Cisneros’s position at BBVA, it was suspected that he was able to help other criminals set up the legal procedures to start Global Trade Import and Export and, in 2017, police seized 4.3 tons of cocaine that were being shipped by Global Trade Import and Export in artichoke cans destined for Spain.
According to OjoPúblico, BBVA and BCP both claim to keep high AML standards and will comply and cooperate with the authorities. However, it is evident that the number of criminal activities occurring “under their noses” pinpoints to the many loopholes that exist in the compliance programs at these and other financial institutions in Peru, and that new procedures and stronger regulations and penalties are needed in order to prevent further criminal activity from going unreported and unpunished for too long.
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