Financial secrets reveal billion-dollar penetration of illegal money in banking

Financial intelligence documents accessed by Ojo-Publico.com show, together with other entities in the banking system, Banco de Crédito and BBVA Continental received more than US$2.2 billion from clients under suspicion because of their links to organized crime and tax evasion. The cases presented here demonstrate the responsibility that financial institutions have in the struggle against the money laundering by the organizations that mobilize the most illicit funds in Peru.

24 Abril, 2018

Secret documents leaked to Ojo-Publico.com reveal that more than US$2.2 billion from alleged criminal activities entered the Peruvian financial system through clients under suspicion for links to the activities that mobilize the most financial resources in the country: the illicit drug trade, illegal gold mining, tax evasion and corruption—all crimes that contribute to violence, citizen insecurity, environmental pollution, and the flight of capital to tax havens.

The investigation we publish today—with Peru being one of the world's largest producers of coca leaf, Latin America’s principal exporter of illegal gold, and the country experiencing the second greatest impact from the Lava Jato case—establishes the responsibility of the banking system in the laundering of money from organized crime. We demonstrate numerous cases of non-compliance with the regulations that aim to combat this scourge, and inaction by the state’s sole supervisory body—the Superintendency of Banking, Insurance and Private Pension Fund Administrators (SBS).

The #Dineroleaks project has drawn on a report from the Inter-American Development Bank (IDB), which, in 2016, issued an unusual warning about the penetration over recent years of dirty money into banking system. Barely known within the judicial system, the report states: “Financial entities have been used, in one way or another, to commit these crimes [money laundering].”    

An IDB report warns that financial institutions have been used to launder money.

Based on that report, Ojo-Publico.com has accessed secret documents of the Financial Intelligence Unit (UIF is the Spanish acronym), a key pillar in the fight against money laundering and decisive in the Lava Jato investigations against ex-presidents Alejandro Toledo, Ollanta Humala, and Pedro Pablo Kuczynski, which has shown that money of illegal origin totaling US$2.2 billion has entered the financial system since at least as early as 1998.

Based on the UIF documents, and on various reports of the Anti-Drug Police, Ojo-Publico.com has created the first register of bank clients with suspect transactions.* This list includes operators and companies that have been included by the US Department of Justice and the US Treasury either in complaints before the US courts or in the Foreign Narcotics Kingpin Designation Act for conspiracy to launder money from illegal gold mining or drug trafficking.

After analyzing the profile of more than 400 clients and their suspect transactions, the investigation focused on the two largest banks in the country: BBVA Continental (BBVA); and Banco de Crédito del Perú (BCP), the second largest national company by revenue and considered in the top 20 of institutions of its kind in Latin America—its parent company is on the Forbes Top 1000 list of the companies with the greatest wealth in the world. The investigation also detected cases with Interbank and Scotiabank.

THE LARGEST. Banco de Crédito del Perú, along with other entities of the financial system, received more than US$2.2 billion from clients investigated for organized crime and tax evasion.
Photograph: Andina

In recent decades, the US government and several regulatory entities in Europe have filed criminal charges or issued million-dollar fines against banks for associating with criminal groups to launder money, or for violating anti-laundering practices. These cases include the Bank of Credit and Commerce International (BCCI) in the 1980s; the 2008 scandal involving HSBC laundering money from Mexican cartels, and; the Meil Bank and Private Banking of Andorra (BPA), used by Odebrecht to pay bribes in Latin America.

The Peruvian state, through the Superintendency of Banking, Insurance and Private Pension Fund Administrators (SBS) sets regulations to punish failures to prevent money laundering. The legislation is benign given that the maximum penalty is payment of 100 UITS (PEN 415,000, or just US$130,000). It requires impeccable behavior by bank employees and diligence in the identification of unlawful conduct. It also obliges banks to be aware of their clients´ activities and to establish whether these have public links with criminal organizations.

The cases we are publishing provide an unprecedented glimpse into the type of clients the financial system (and BCP and BBVA in particular) accepts; the allegedly unlawful operations these individuals carry out; the deficiencies in the anti-laundering system, including failure to identify the high risk profile of clients; the failure to detect the penetration of dirty money, and; the accusations of links between some bank officials with criminal groups.

First infrigement: when the bank does not know its client

The list of BCP and BBVA bank clients who have registered unusual operations includes figures prominent in local and international drug trafficking in Latin America and their alleged money launderers operating real estate, air transport, and money exchange companies in Lima. On the basis of the UIF reports, Ojo-Publico.com has detected a roll call of individuals with a high profile risk.

CONTINENTAL. BBVA is the second largest bank in Peru and, together with Credicorp, the parent company of BCP, is in the Forbes list of the world's leading companies.
Photograph: BBVA

Both BCP and BBVA, together with Banco Wiese (Scotiabank since 2006) each had as a client Global Distribution System, a front company that laundered the money for the most powerful drug trafficker in Peru, Fernando Zevallos Gonzales 'Lunarejo'. Between 2000 and 2004, the company—whose main shareholder was the now dead discontinued company, Aerocontinente—made suspicious transactions through the three banks totaling US$27 million.

The US Treasury Department included the company on the Foreign Narcotics Kingpin Designation Act list. The company has also been included in the current mega investigation against Zevallos for money laundering. Investigations by the Anti-Drug Police have shown that Lunarejo ordered the murder of witnesses to his criminal activities around the same time that Global Distribution System received or transferred dirty money through BCP, BBVA, and Wiese.

Zevallos—whose history of drug trafficking dates back to 1982 and who was involved in the brutal murder of journalist Todd Carper Smith in 1989 and other unpunished murders in Lima and Huallaga—moved US$20.3 million through BBVA, US$5.3 million through Wiese, and US$1.5 million through BCP using Global Distribution System as a front company. Since 2005, Lunarejo has been serving a twenty year prison sentence for drug trafficking and has an extradition order to the US pending following his eventual release.

Two Peruvian companies regarded by US and Colombian authorities as fronts for the powerful businesses of the now defunct Cali cartel of brothers Miguel and Gilberto Rodríguez Orejuela are also linked to the national financial system: Colfarma Peru, with transactions in Interbank, and Distribuidora Continental 6, a BCP client. In 2003 the US Treasury department included Colfarma in the Foreign Narcotics Kingpin Designation Act. In subsequent amendments it also included the owners of Distribuidora Continental 6.

DRUG TRAFFICKING. Front companies of the Cali cartel and of the powerful Peruvian drug trafficker Fernando Zevallos injected more than US$30.4 million into the Peruvian financial system.
Documents: Foreign Narcotics Kingpin Designation Act

Five Peruvian companies accused of drug trafficking since the 1980s—all owned by Luis Valdez Villacorta and all BCP clients—also appear on the list. During almost the same period in which he was accused of the crime against journalist Alberto Rivera (2004) and arrested for money laundering (2008), Valdez—linked also to the seizure of half a ton of cocaine bound for Guatemala in 2003 and the confiscation of 176 kilograms of drugs to the Netherlands in 2008—administered millions of dollars held in BCP through Industrial Ucayali, Triplay Veneers, Cervecería Amazónica, Técnica de Ensamblaje, and Universal Import.

The list of bank clients also includes the network of Peruvian money exchange houses linked to the Chilean Mauricio Mazza-Alaluf (indicted by the US Department of Justice), who was accused of laundering dirty money from the criminal groups in that country such as the Revolutionary Armed Forces of Colombia (FARC). The organization, made up of more than 150 people in Peru, used BCP, BBVA and other financial entities to enter US$369 million. Its method was to transport bundles of bank notes in suitcases or attached to bodies through airports in Peru, Chile, Colombia, and the US, before leaving the cargo with exchange houses, and then splitting the money up through successive deposits and transfers.

LUIS VALDEZ. Clients of Banco de Crédito del Perú included companies linked to the former mayor of Pucallpa under investigation for drug money laundering.
Photograph: Dirandro

The powerful criminal organization of Pedro Pérez Miranda 'Peter Ferrari', accused this year by the US Department of Justice for conspiracy to launder money from the illegal gold trade, was also a client of BCP and of BBVA. Through both banks the Peter Ferrari network of companies, with a criminal record for drug trafficking and mineral smuggling dating back to the 1990s, administered US$503 million from the sale of minerals of suspicious origin. Today almost all of its partners in Lima and Miami are either in prison, or await extradition.

According to the charges brought by Peruvian authorities and the US Department of Justice, Peter Ferrari and his network of companies in Lima bought gold from areas devastated by illegal mining in the south of the country. Peter Ferrari in particular, from whom dozens of properties in the capital have recently been seized, received million-dollar payments from the gold trade through accounts held in BCP and BBVA by his related companies: Business Investments, La Mano de Dios, Gold MPP, and Comercializadora de Minerales Rivero.

The gold mining company Los Poderosos Minera Aurífera is another company that features as an important BCP client on Ojo-Publico.com’s list. It belonged to the illegal Apurimac gold merchant, Leonardo Callalli Warthon, a trader in minerals of suspicious origin in Madre de Dios who, in 2013, was arrested in possession of three bars of gold. For many years one of his main clients was the national export company Universal Metal Trading, which ceased to operate after its suspicious operations were discovered. In 2015 Callalli, whose mining company was a client of BCP, was sentenced to ten years in prison for money laundering.

DIRTY GOLD. The network of 'Peter Ferrari' front companies, with records for drug trafficking and ore smuggling dating back to the 1990s, administered more than US$503 million from the sale of mineral of suspect origin through BCP and BBVA.
Photograph: Andina

The list also includes the gold exporting company AS Peru belonging Anibal Sucari Sucari and with mineral purchase operations registered in Madre de Dios. Sucari, from Cusco, whose company received millions in deposits to its BCP account from the sale of gold of allegedly suspicious origin to the Swiss company Metalor, is included in investigations by the Public Ministry and the Public Prosecutor's Office for money laundering. AS Peru also used BBVA and other banks to transfer funds to its principal suppliers of minerals from areas where illegal mining occurs.

The list of BCP clients also includes Claver Acosta y Rodríguez ('El Chino'), alleged to be a member of 'Los Rambos'—an Alto Huallaga drug trafficking clan that supplied a Mexican cartel and was linked to the coca-growing region’s faction of Shining Path—who was detained in 2007 by the Anti-Drug Police in possession of 163 kilos of cocaine. Bahía Continental, one of El Chino’s interprovincial transport companies in Huánuco, was also a client of BCP and, because of involvement in multiple drug seizures, is regarded by police intelligence as high-risk company.

The intelligence work also determined that BCP’s client was a member of an organization led by Nelson Neira James 'Runa Mula' and Hernán Tapia Trujillo 'Rambo', who controlled three clandestine drug laboratories in the Monzón Valley. In the same year that Claver was arrested, three former members of Shining Path told Peruvian authorities that Mario Tapia Trujillo, the clan's security chief, paid protection money to 'Artemio', ringleader of the subversive faction in the Huallaga.

FINANCING. The organization of BCP client Claver Acosta y Rodríguez ('El Chino'), was accused of paying protection money to 'Artemio', leader of Shining Path in Alto Huallaga.
Photograph: La República

BCP also administered four bank accounts with operations worth US$110,000 for Numa Soto Sánchez, a powerful and confessed Peruvian drug trafficker, who also served almost three years in prison in Colombia and had been a supplier to Mexican mafias since the 1980s. In March 2008 the Anti-Drug Police seized two tons of cocaine from the Soto Sanchez organization camouflaged inside mattresses. The police intelligence work determined that the illicit merchandise came from Iquitos and Pucallpa and had the Netherlands as its final destination.

The documents show that two other important leaders of the organization, the Ecuadorians Pedro Bejarano Alvarado and Daniel Hernández Barreto, accused BCP’s client of being “one of the stockpilers” of the drug seized in 2008. Numa Soto was finally captured in December 2009, almost two years after the operation, whilst hiding in a hotel in the Lima district of Lince.

Another important drug trafficking group, Global Trade Import & Export, was a BBVA client and played a central role in one of the most memorable drug shipments in history. The company sought to ship 4.3 tons of liquid cocaine alkaloid to Spain hidden in more than eight thousand cans of artichoke. The documents show that this front company was part of an organization composed of more than one hundred people, who used “the banking system (...) to facilitate their criminal activity.”

The Ojo-Publico.com investigation reveals weaknesses in the anti-money laundering systems of BCP and BBVA.

BCP’s vaults, together with those of other financial entities, also held more than US$234,000 of the assets of David Soto Aranda, sentenced to twenty-five years in prison in October 2016 (and released some months later following a controversial Supreme Court decision) for being the ringleader of a family drug trafficking clan with criminal records dating back to the 1990s.

The BCP client and his brother, Héctor Soto Aranda, were prosecuted in the 1990s for drug trafficking in Chile. Aranda’s brother-in-law, Heber Farfán Loyola, was sentenced in Italy in 1994 to eight years in prison for drug trafficking. The most recent operation against this family occurred in 2010, when police in Spain seized 116 kilos of cocaine camouflaged in a shipment of twenty-two tons of timber. Peru’s Judicial Branch found that the drug had been sent through a ghost company belonging to another of Aranda’s brothers: Cuenen Soto Aranda.

The list of BCP clients also includes Ami Oil, a fuel company which received up to US$7 million from overseas. It was investigated for laundering money from the organization belonging to Alfonso Reyna Sánchez, sentenced to seventeen years in prison for drug trafficking, and Óscar Rodríguez Hurtado, also accused of the same crime. The story came to light during a police operation that seized residential properties in Lima, land and 280 head of cattle in San Martín, and two aircraft belonging to brothers of Reyna Sánchez.

DRUGS. One of the companies included in the investigation against the drug trafficker Alfonso Reyna Sánchez was a client of the BCP. In 2011, the National Anti-drug Agency (DIRANDRO) seized buildings and aircraft belonging to an organization of which he and his brothers were members.
Photograph: Archive

The list of BBVA clients includes an air transportation company whose base is located on Peru’s border with Colombia, an area dominated by drug trafficking and arms smuggling. Transzel Continental was included in a report by the Army and the Anti-Terrorist Police in which they identified suspected FARC collaborators in Peru. After having accumulating capital of US$720,000, the company’s sole owner Zelma Hernández requested a loan of US$1.7 million from BBVA to purchase a plane. When the UIF investigated the case, it established that Transzel did not have the financial capacity to justify its assets.

The list of clients also features a group of human traffickers linked to Asian mafias. One such case is the organization allegedly headed by the Peruvian Eduardo Orozco Chiang, who, in partnership with the 'Red Dragon', used the country as a hub to transfer migrants from China to the US. Another member of the organization, Julio Uribe Chiang, had been a BCP client since 1998. He received large sums of money, some via Western Union, from countries linked to the route used by a criminal network that had managed to infiltrate the Peruvian consulate in Shanghai.

The boss of the organization “The Big Family”, Angel Ramón León Arévalo 'Viejo Paco’—who served two terms in prison for crimes including bank robbery—used his partner Maritza Díaz Huamán to create six transport companies, acquire real estate and vehicles, and then inject money from his illegal activities into the banking system. According to case documents, this organization, accused of handling weapons of war and assassinating its rivals in the north of Peru, charged protection money that generated income valued in the millions of dollars.

The 'Viejo Paco' partnership—also investigated for money laundering from organized crime—became a client of financial entities including BBVA, Scotiabank, and Interbank. The charge reads: “It was determined that the money obtained as a result of extortion has been reinserted into local commerce, through his son Angelo Janpier León Díaz and the daughter of his partner, Yesica Emperatriz Ramos Díaz".

THE BIG FAMILY. BBVA, Scotiabank and Interbank each had as a client the partner of Ángel León Arévalo's (’Viejo Paco’), head of a criminal organization accused of laundering money, handling weapons of war, and assassinating rivals in northern Peru. Viejo Paco’s partner was also prosecuted for money laundering.
Photograph: La República

The Ojo-Publico.com list also includes companies that concealed the real value of their overseas trade businesses in order to defraud the tax system. A group of timber extraction companies based in Madre de Dios, Loreto and Ucayali—territories dominated by illegal logging operators—received transfers from China of US$13.8 million into their BCP accounts yet only declared exports for US$5 million. The money was transferred to other companies related to the same owner, Xiandong Ji Wu. According to the UIF, this organization sought to “hinder the identification and destination of funds received from overseas.”

The list of bank clients also includes alleged tax evaders; for example, a group of wholesalers at the Santa Anita Producers Market, clients of BCP and BBVA, were investigated for tax fraud through the million-dollar trade in rice trade, a staple food in Peru. They reported income of PEN61 million but the UIF concluded that they failed to pay more than PEN5.5 million in tax.

Also part of the list are suspicious BCP clients who imported millions of dollars’ worth of merchandise from China. The Peruvian Alejandro Huamán Yupanqui used family members and workers from his shopping center in downtown Lima to make 238 transfers totaling US$1.5 million to the accounts of suppliers of his business selling toys, fantasy jewels, and other items. His company, Moda Patro's, located near the Palace of Government, declared imports valued at US$441,000 to the Customs Office, an amount which the UIF suspected represented an undervaluation.

PUCALLPA. Organized crime groups also operate behind the timber trade to launder money from tax fraud and the illegal extraction of natural resources.
Photograph: Ojo-Publico.com

Ojo-Publico.com discovered the same pattern in the IT business. Manuel Mujica López, a BCP client, together with seven other Scotibank clients, sent US$758,000 to the North American Lantronix USA Corp. but declared imports valued at only US$32,000 to the tax authority. According to documents, Mujica confessed that his company had used third parties to make transfers in order to acquire the technological equipment. Each was charged with tax fraud.

Second infringement: delayed anti-laundering alerts

Where money laundering is concerned, Peru’s financial system—composed of, inter alia, major banks, municipal and rural banks, and entities supporting the development of small and medium-sized enterprises—is overseen by the Superintendency of Banking, Insurance and Pension Fund Administrators (SBS). Following an Ojo-Publico.com request, this entity reported that the financial system has been penalized only sixteen times since 2002. On four of these occasions BCP has been the target, for deficiencies in the prevention of money laundering. BBVA has received a reprimand.

However, an analysis of documents—cross checked with reports from the Anti-Drug Directorate of the Police, the National Superintendency of Tax Administration (SUNAT), the Public Prosecutor's Office of Money Laundering, and the Panama Papers—has brought to light other cases in which entities such as BCP and BBVA have failed to comply with one of the SBS's most important anti-money laundering measures: complying with maximum alert periods to the UIF in their capacity as reporting entities for suspect transactions.

Regardless of the amount involved, for twenty years money laundering compliance management units or divisions have been obliged to report suspicious transactions to the UIF in a period of no more than thirty days from date of detection. In 2017 the period was reduced to 24 hours.

The front company of drug trafficker Fernando Zevallos was a client of BCP and BBVA.

The analysis shows that the banks took on average more than four months to alert the UIF to hundreds of irregular operations associated with alleged organized crime and tax evasion—five times longer than the time stipulated by the SBS. In some cases a delay of up to five years was discovered. In other cases the bank sent the alert only following publicity from the news media.

Ojo-Publico.com detected this pattern of late reporting—considered a serious infringement and subject to a fine of US$130,000 (the equivalent in dollars of 100 Peruvian Taxation Units)—in some of the most important cases of money laundering in recent years.

BCP Delays

According to the documents, Peruvian Paul Chinchay Echevarría was a BCP client. He was charged with drug trafficking and sentenced in Italy for human trafficking. The bank took one year and four months (491 days) to report its client to the UIF. By the time it sent the alert in October 2008 for suspicious transactions totaling more than US$178,000, its client had already been in detention for fourteen months for drug trafficking and for one year following action by the Public Ministry.

“Paul Chinchay Echevarria, Patrizi Borboni, Fallon Mendoza, Sheilla Alfaro and Jorge Cavero are part of a criminal organization dedicated to money laundering from drug trafficking, using the modality of sending cocaine hydrochloride to Milan-Italy,” says the UIF document. The Prosecutor’s Office accused Borboni and Chinchay of being responsible for transferring and receiving the money, and the remaining individuals for collecting and transferring the money and preparing the mules.

Segundo Manuel Sánchez Paredes, brother of the drug lords Simón Sánchez Paredes (murdered in Mexico in 1987) and Perciles Sánchez Paredes (killed in Trujillo in 1991), had been a BCP client since 1997. He is the subject of different allegations from the National Anti-Drug Police dating back to the late 1970s and the 1980s. Together with this brothers Orlando and Wilmer, and his son Fidel Sánchez Alayo, he is currently being prosecuted for money laundering from drug trafficking.

FAMILY CLAN. The drug lords, Simón Sánchez Paredes (left) and Perciles Sánchez Paredes, were murdered in Mexico in 1987 and Trujillo in 1991, respectively. Their brother, Segundo Manuel Sánchez Paredes, who is currently being prosecuted for laundering money from drug trafficking, was also a client of the BCP.
Photograph: Ojo-Publico.com

It took the bank nearly six years to report “significant movements of funds” in the accounts of Manuel Sánchez Paredes, and only after the national press revealed the Public Prosecutor's investigations into the powerful La Libertad family’s alleged links with cartels in Mexico and Colombia.

BCP had accounts holding more than US$746,000 for Hilder Lino Céspedes 'El Químico', a specialist in camouflaging industrial quantities of drugs, who collaborated with the 'Los Caruzo', a family clan dedicated to drug trafficking in Tingo María (Huánuco) from the early 1980s. In this case, the suspicious transaction alert reached the UIF eight months late.

BBVA failures

It was 2002 when the Anti-Drug Police first targeted for laundering drug trafficking assets a money exchange organization later found to be a key link in a network of funds transfer companies in Latin America. The targets of the investigation were Percy Velit Núñez, a BBVA client from July 2006 until his detention in May 2008, and his children Sandro and Percy Velit, linked to Amasban S.A. and Money Express SRL in Lima.

When the investigation was made public in 2008, the Police and the Public Prosecutor's Office had already established that the Velit family’s money exchange offices had laundered money from Colombian criminal organizations. Despite this, and even though its own unit in charge of preventing money laundering had first issued an alert to the UIF in October 2006 because of frequent and unjustified national and international transfers, BBVA continued to maintain the accounts of Velit Núñez.

A subsequent report issued by BBVA about suspicious Velit Núñez transactions made reached the UIF almost one year after its earlier alert, and after the media announced his arrest in the context of the investigations by the Anti-Drug Police into the family’s money exchange business. The head of this group of suspects, the Chilean Mauricio Mazza-Alaluf, was convicted by the US justice system.

MONEY EXCHANGE. The network of companies and individuals linked to the Chilean Mauricio Mazza-Alaluf—which included the Peruvian Velit Hurtado family—was accused of entering more than US$369 million through BCP, BBVA, and other financial entities. 
Photograph: National Police of Chile.

The pattern recurs in the case of Hernán Bahamonde La Hoz and the operations of his network of businesses and alleged front men. Despite his record of fraud, tax evasion, and illegal possession of weapons, his companies remained clients of BBVA and the latter’s alert reached the UIF with four months beyond the deadline specified by the legislation.

The pattern recurs once more in the fishing sector: BBVA took two months to report a transaction involving “triangulation” of US$1.3 million between a fish exporter, a fishing industry machinery company, and a Panamanian company with accounts in Switzerland. The UIF discovered that the fishing company, Corporación Lusaka—the BBVA client—was a “front company” created to “support the money laundering activities of criminal organizations.” The suspect transactions also included the Peruvian company Prime Fishmeal, whose founder is Hans Buhler Von Ehren, owner of the Pappas Grill restaurant chain and an individual with a record of deceiving the tax authority.

Third infringement: lack of due diligence

The document analysis provides an unprecedented insight into the processes that BCP and BBVA’s prevention and compliance areas follow when they discover clients with suspect transactions. Even when the client is evidently a front because he or she has no financial history, or resides in a poor area of Lima (or even a shanty town), the bank provides a warning using communications such as letters and telephone calls.

BCP's compliance management team sent letters to certain clients in Lima reporting unusual transactions and providing the client with an opportunity to explain: “Dear sir, we are writing to express our acknowledgement for the confidence you have shown by making your transactions through our bank, which we appreciate given their size,” say the letters obtained for this investigation.

These banks took more than four months on average to alert the UIF about hundreds of irregular operations.

After reviewing the profile of these BCP clients, Ojo-Publico.com, found that even though the great majority were between twenty and twenty-three years old and had no profession or financial history, they had registered more than US$3.4 million in national and international transactions in the space of a few months. The analysis of these cases demonstrates the lack of a strong process and due diligence to prevent money laundering given that the target of a future investigation by UIF receives advance warning of future action against them.

In fact, the decision by the banks to inform their clients about the suspicious transactions that have been detected, leads some individuals to take steps to avoid investigation of their source of their money. Interbank, for example, detected that a client suspected of being a member of an organization dedicated to smuggling products from Bolivia received almost 300 deposits into their accounts totaling US$2.3 million. A business executive of the bank then made telephone contact.

AUDIT. The Superintendency of Banking, Insurance and Private Funds Administrators (SBS) is in charge of auditing financial entities and penalizing them in matters of money laundering prevention.
Photograph: Ojo-Publico.com

According to the UIF report, the bank employee advised the client of the transactions and asked for an explanation. In reply, the client admitted that the money derived from business with the illegal soybean trade on the border with Bolivia; but he refused to provide the name of the company behind the operations. Although Interbank reported the matter, it did so five months after the last unusual transaction.

Following the alert, the UIF concluded that the smugglers may have been “using or trying to operate in another financial institution, given the level of funds they administer, and the apparent need to mobilize funds quickly.”

Former congressman David Perry Cruz reacted in a similar way after being alerted by BCP. He threatened to withdraw his business if the bank did not cease to inquire about two matters: unjustified overseas transfers valued at US$21,000; a deposit into his personal account of a check valued at PEN 120,000 that had been written by a businessman who provided services to the state. Despite the fact Cruz was considered a politically exposed person (PEP), the bank, following a series of communications, waited one year and two months after the initial payment to report the matter.

BCP and BBVA clients include prominent national and international drug trafficking figures.

The documents also reveal alleged criminal activities that ought to lead to changes in the anti-laundering regulations. As one of the cases reveals, BCP keeps suspicious client transaction reports for ten years, as the law requires. This, however, becomes a problem when the UIF investigates people whose suspicious activities date further back. In 2008, the governing body in the fight against money laundering asked BCP for information about a high-ranking army officer, José Sánchez Marín, who had received payments of US$11 million into his account after becoming mayor in Bagua (Amazonas).

After detecting the case in a 2005 suspicious transaction report sent by BCP, and suspicious about irregular activities during the army officer’s tenure in the town at the end of the 1990s, the UIF requested addition information relating to much earlier periods. BCP responded that it had no obligation to maintain records dating back further than ten years and proceeded to provide only information limited to checks written to withdraw the funds.


A subsequent UIF investigation showed that the former Army officer continued to be a BCP client until her received a new alert in 2008. In the intervening years Sánchez Marín, had invested in Credicorp, Backus and Telefónica shares in amounts that were incompatible with his income. After placing money in the financial system, he made various transfers before redeeming a part in 2005, which he then invested in a Credifondo mutual fund account. This unjustified transaction was reported.

Former mayor Luis Valdez administered million-dollar sums in BCP through five companies.

In another case of lack of due diligence by BCP, Ojo-Publico.com has identified that in 2011 the bank delayed sending information about deposits totaling US$7 million to the Ami Oil company, included in the investigation against Alfonso Reyna, who was serving a prison sentence for drug trafficking. In July of that year the police asked the Prosecutor's Office to seek documents from BCP’s compliance manager. It took until September for the bank to respond, and even then only to request an extension due to demands of compiling information that covered such a long period (2000 to 2007).

Final infringement: organized crime in the system

The documents also put to the test the anti-money laundering regulations that oblige the financial system to ensure the integrity of its personnel. Ojo-Publico.com detected four cases in which employees of BCP and BBVA, some of them working in areas with a high risk profile such as Áncash and Loreto, were accused of being members of criminal organizations.

Case 1: A report prepared by the UIF identified an employee of BCP’s Chimbote (Áncash) branch acting as “financial advisor” to a mafia that injected millions of dollars into the system through irregular transfers from Colombia through dozens of front men without any financial or credit history. The intelligence document received by the Public Prosecutor’s Office is revealing:

“The organization is believed to use Jimy [Henry] Orellana Dominguez, a BCP official and beneficiary of US$425,000 of Colombian remittances, as an advisor [since he] has 'requested service' for some members of the alleged criminal organization from the Serviban agency [today Western Union] in Chimbote. Given that as a banking official he knows the controls present in the money laundering prevention system, it can be presumed that he advised the [organization] to enter US$5.8 million in the financial system, a serious situation since he is an employee [of BCP]”.

PARTNERS IN CRIME. The investigation #Dineroleaks (Moneyleaks) identified this and three other cases in which employees of BCP and BBVA were accused of being members of criminal organizations.
Photograph: Ojo-Publico.com

During the time the now incarcerated regional president, César Álvarez, was a dominant figure in Áncash politics, Orellana Domínguez was an employee of BCP (from 1999 and 2009). Orellana subsequently became director of the José Gálvez de Chimbote football club, a position which gave him regional fame. He also became involved in an investigation for procuring a minor.

Case 2: The UIF located an organized criminal group working in a BCP branch in Iquitos (Loreto). Its report does not identify the bank official, but it does show he was an accomplice of Manuel Sánchez Rengifo. Using false documents, the latter claimed more than US$50,000 through checks issued by alleged front companies of Luis Valdez Villacorta, the former mayor of Pucallpa, under investigation since 2008 for laundering money from drug trafficking.

Four cases were detected in which employees of BCP and BBVA were accused of being members of criminal groups.

The Anti-drug Police files reveal that at the same time Sánchez Rengifo received the money with the approval of BCP, authorities of the Netherlands seized 176 kilograms of cocaine alkaloid hidden inside a shipment of timber exported by Forestal Export. This company was the principal issuer of the checks and, together with Sánchez Rengifo, was included in the case against Valdez for money laundering.

Case 3: The Prosecutor's Office and DIRANDRO reported alleged collusion between BCP workers and operators of a network led by Numa Soto Sánchez, who served a sentence for drug trafficking in Colombia and was accused by two Ecuadorian drug traffickers of being a dealer in Huallaga and in the jungle of Ayacucho.

CONFISCATION. In 2008 DIRANDRO seized two tons of cocaine from Numa Soto Sanchez's organization camouflaged in a shipment of mattresses. BCP administered four bank accounts with operations of more than US$110,000 from this confessed drug trafficker.
Photograph: Anti-drug Police.

Peruvian authorities concluded that, as part of the methods used by this drug clan to launder illegal profits, it was “evident” that there was “direct participation of Banco de Crédito del Perú officials” in the overvaluation by US$170,000 of a property for the subsequent delivery of a mortgage loan by the same financial institution.

Case 4: In 2009, the Public Prosecutor's Office found that Sergio Cisneros Francia, manager of BBVA’s San Isidro branch, collaborated with the group that tried to export one of the largest consignment of drugs in history. According to a document in the case: “As manager of the Chacarilla office of Banco Continental, he is believed to have provided facilities to Jorge Luis González Sánchez and Alex Ángel Montoya Agüero for the incorporation of the legal entity Global Trade Import & Export.”

In September of that year, DIRANDRO seized 4.3 tons of cocaine alkaloid hidden in preserved artichokes that were to be exported to Spain by Global Trade Import & Export, a client of BBVA. As a result of this operation, the Public Prosecutor’s Office opened an investigation against a criminal organization made up of more than 100 people, including Cisneros Francia, for laundering their illicit profits through successive deposits and transfers in the financial system.

SENIOR MANAGEMENT. Dionisio Romero Seminario, chairman of Banco de Crédito del Perú's board of directors, was prosecuted for his illegal relations with Vladimiro Montesinos. The case lapsed. José Graña, another director of BCP, resigned from his position last year after being included in an investigation for money laundering in the Lava Jato case.
Photographs: Archive

Bank officials with links to criminal organizations is not a new issue. In 2001, after the fall of the government of Alberto Fujimori, the then chairman of the board of BCP, Dionisio Romero, was investigated by the judiciary for his links with Vladimiro Montesinos. The case was archived in 2005. Thirteen years later, another BCP executive, José Graña Miro Quesada, left his position when he came under investigation in the Lava Jato case for money laundering.

Before the close of this edition, Ojo-Publico.com sought statements from BBVA and BCP about the cases covered in our investigation. Each bank said it collaborates fully with authorities and maintains high quality standards in its systems of money laundering prevention. Neither responded to some of our questions about the cases, arguing that their clients are protected by bank secrecy provisions.

UPDATE: 24-04-2018 (6:46 p.m.)

(*) Ojo-Publico.com communicated with Banco de Crédito and BBVA Continental to find out if the individuals named in this report continue to be clients. Both organizations replied that confidentiality provisions prevented them from providing the information.