Guatemalan banker busted in drug-laundering probe targeting politician, others
14 Nov 2019

A Guatemalan banker accused of accepting hundreds of thousands of dollars in bribes from drug traffickers to move cocaine profits between Central America and the United States appeared in Miami federal court Wednesday after his arrest on money-laundering conspiracy charges.

Alvaro Estuardo Cobar Bustamante, the director of a national Guatemalan bank, was the target of an FBI sting operation in which he accepted $20,000 from a cooperating witness convicted of drug trafficking, according to a criminal complaint unsealed Tuesday. The banker agreed in a recorded conversation to move the purported cocaine proceeds to the United States.

Another cooperating witness, Manuel Antonio Baldizon Mendez, a former candidate for president of Guatemala, assisted federal authorities in the undercover operation after pleading guilty last year to accepting about $1.6 million from narco-traffickers to facilitate their distribution network. Baldizon used half of that tainted money to buy a condominium in Miami, federal authorities said.

Baldizon was sentenced to more than four years in prison, but his case was not known to the public until Tuesday because it remained under seal as he played a secret supporting role in the sting operation targeting the Guatemalan banker, according to court records. Baldizon was one of four cooperating witnesses convicted of drug-related crimes in Miami who assisted the FBI, Drug Enforcement Administration and other agencies in targeting Cobar, records show.

Federal authorities said drug traffickers moving Colombian cocaine through Central America and Mexico to the United States pay off politicians and bankers in Guatemala because it is a critical transportation hub for drug shipments.

“In addition to political corruption, the business community plays a role in either helping or preventing narcotics trafficking,” according to an FBI affidavit filed with the criminal complaint. “Banks in particular are prized targets of [drug trafficking organizations] and the ability to move or launder money through a banking institution represents not only an achievement for a DTO but the pinnacle of bad confluences — drug trafficking, corruption and bank involvement — that can seriously plague a country otherwise battling narcotics trafficking.”

At least two cooperating witnesses who pleaded guilty to drug trafficking charges in “Operation Black Mass” said they began going to Cobar to convert millions of dollars in drug profits to local currency in Guatemala in 2015, the affidavit said. The banker collected a 17 percent fee for multiple transactions. The witnesses said they used the converted money to finance their narcotics business, including making payments to distributors in South America.

By Jay Weaver, Miami Herald, 13 November 2019

Read more at Miami Herald

RiskScreen: Eliminating Financial Crime with Smart Technology

You can claim CPD minutes for this content, by signing up to our CPD Wallet