‘El Chapo’ Laundered Over US$5M in Andorra for Almost a Decade

“MX” for Borderland Beat

Andorra, in between the borders of Spain and France, was considered by US authorities as a “secretive conduit” for international money-laundering due to its laxed banking restrictions and tax haven. The money Joaquin ‘El Chapo’ Guzman (pictured above) laundered there is only a faction of the entire scheme, investigators say.

Mexico’s Financial Intelligence Unit (UIF) claims that Joaquin ‘El Chapo’ Guzman, the former head of the Sinaloa Cartel, laundered over MXN$105 million (US$5.2 million) in Andorra for nearly a decade.

The scheme was done through a network of businesses that issued fraudulent invoices, transactions, and transfers to launder drug proceeds. Some of these entities are linked to the Brazilian construction giant Odebrecht and several prominent Mexican figures.

The shell companies used by the Sinaloa Cartel transferred funds to Europe to prevent them from being tracked by financial intelligence services, the UIF said.

Although the scheme worked for almost 10 years, the first concrete clues of this money laundering network were identified by the UIF after they detected that at least 22 Mexican companies registered transactions with Andorran entities.

These businesses were doing transactions with 72 limited liability corporations (known in Mexico as sociedades mercantiles) that had ties to the Sinaloa Cartel.

The UIF suspects that the MXN$105 million laundered is only a tiny fraction of the Sinaloa Cartel’s doings in Andorra.

Mexican investigators believe that like many political figures and businesspeople in Mexico, the Sinaloa Cartel benefitted from the lax financial system available in Andorra. Until 2018, Andorra was one of the most important tax havens in the world.

Details

The report explains that the UIF, headed by Santiago Nieto, detected that Manuel Eduardo Rodríguez, considered the main financial operator of El Chapo in this scheme, resorted to this network of shell companies to transfer capital from Mexico to Andorra.

His goal: disguising drug proceeds from the Sinaloa Cartel and Colombian drug trafficking groups tied to them.

It is not known exactly how several of these businesses ended up also being used by Odebrecht in its extensive bribery system.

What the investigations do reveal is that while the UIF made decisions to close the money laundering channels, the Sinaloa Cartel turned moved the money to other bank accounts in Europe. The documents establish an intricate network in which, as companies appear and disappear, deposits in pesos and dollars are registered in Andorran bank accounts.

Logo of Mexico’s Financial Intelligence Unit (UIF)

For example, the UIF detected that after the companies ZOCLE MERCANTIL S.A. and Comercializadora PITER S.A. de C.V. were identified as laundering firms, the Sinaloa Cartel used their accountants to transfer their funds to other entities in Europe.

These two companies were crucial for the Sinaloa Cartel since they were tied to an aircraft that security forces shot down in Venezuela in November 2013. The plane was carrying drugs that were destrined for the Sinaloa Cartel.

After the two entities mentioned above were identified, the Sinaloa Cartel used another company, COPADEC CRIC S.A. de C.V., which transferred US$200,000 to Andorra via another company known as Gallaxy Real Estate S.A. de C.V.

The UIF investigated these companies and noticed that COPADEC had the same business address as VIKOCEL S.A. de C.V., another Sinaloa Cartel shell company. VIKOCEL was formed at the same time as ZOCLE under public notary Leonardo Alfredo Beltran Balderas at his office in Nezahualcoyotl, State of Mexico.

COPADEC sent MXN$45.5 million to ZOCLE and received MXN$6 million in cash in return. VIKOCEL sent ZOCLE MXN$1.1 million and received MXN$4 million in return.

Two other companies, Enterprisse Gamki S.A. de C.V. and Varys Comercial S.A. de C.V., where ran by Juan Collado, a former attorney of President Enrique Peña Nieto. These two companies were tied to the Sinaloa Cartel and managed up to US$4.4 million in Andorra.

Since 2019, Collado has been in prison for money laundering, tax fraud, and organized crime involvement.

Many of these 22 shell companies shared the same or similar addresses and telephone numbers. Some of them even sought to open bank accounts on the same day ten years ago. All of them are based in the State of Mexico when Peña Nieto was Governor.

The shell companies in question are also involved in the La Estafa Maestra (Master Swindle), an ongoing embezzlement case in Mexico involving multiple high-level politicians under Peña Nieto’s administration.

List of companies

Gallaxy Real Estate S.A. de C.V. was the “umbrella” company by which the Sinaloa Cartel transferred money to the rest of the shell companies below.

Firms in the State of Mexico

  • Amber Global S.A. de C.V.
  • Diseños Textiles Dug S.A. de C.V.
  • Distribuciones Novo Mundo S.A. de C.V.
  • Grupo Macrobay S.A. de C.V.
  • Riu Construcciones S.A. de C.V.
  • Servicios Especializados Icall S.A. de C.V.
  • Skilum Trade S.A. de C.V. 
  • Tessa Textiles S.A. de C.V.
  • Textiline Collection S.A. de C.V
  • Distribuciones JDB S.A. de C.V.
  • Sales Advisors Muscae S.A. de C.V.
  • Systesoluciones S.A. de C.V.
  • Tentazzion Textil S.A. de C.V
  • Terra Globo Distribuciones S.A. de C.V.
  • Varys Comercial S.A. de C.V.

Firms in Mexico City 

  • Enterprisse Gamki S.A. de C.V.
  • Kolory Internacional S.A. de C.V.
  • Madvysion S.A. de C.V.
  • Myelmart S.A. de C.V.
  • Estado de México 
  • Tentazzion Textil S.A. de C.V
  • Terra Globo Distribuciones S.A. de C.V.
  • Varys Comercial S.A. de C.V.
Firms identified as fraudulent
  • Distribuidora Comercial Franwi S.A. de C.V.
  • Grupo Liztik S.A. de C.V.

Sources: Milenio; EFE; Proyecto Puente