Two emblematic cases resume

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Corruption Bros
Central characters still at large: the Martinelli Linares brothers, Ricardo on the left and Luis Enrique on the right. They were friends with the owners and creators of the Financial Pacific brokerage firm, Iván Clare and West Valdés. Being sons of the now jailed former President Ricardo Martinelli, all sorts of opportunities opened around them. The brothers are accused of laundering millions in Odebrecht bribe money, which ended up in Switzerland and was frozen by authorities there. Photo by the Presidencia.

Odebrecht and Financial Pacific cases restart with a bang

by Eric Jackson

On Wendeday, April 25, two long-delayed criminal investigations went back into motion. The Odebrecht bribery probe and the prosecution of people in connection with the Financial Pacific brokerage firm that served as one of the clearinghouses for many other crimes got back underway on the same day, having been delayed by motions and lower court rulings that they were not complex cases and thus that the investigation of these matters had not been finished in time. Lawyers for several of the defendants responded with motions designed to start new delays.

In the Odebrecht case prosecutors have one more year to investigate and bring charges. They have information provided by the governments of Brazil, Switzerland, the United States, Antigua and Spain, plus have already taken the depositions of nearly 100 people and institutions. The Public Ministry promises that more defendants will be implicated in the Brazilian company’s bribery, kickbacks and money laundering operations, and that more searches, seizures and asset freezes are underway.

Perhaps the most newsworthy new Odebrecht development is the arrest order for one José Porta Álvarez, who was the 2014 campaign treasurer for the Cambio Democratico ticket of former Housing Minister José Domingo “Mimito” Arias and the first lady at the time, Marta Linares de Martinelli. Nobody doubts that this was an operation totally controlled by former President Ricardo Martinelli Berrocal, but the ordinary courts and prosecutors would not have jurisdiction over him — only the Supreme Court has that.

In the Financial Pacific case there are 18 new defendants, many of them already implicated in other cases.

When the Securities Markets Superintendency shut down Financial Pacific, one of the allegations was that it was a money laundering center for criminal organizations of several other countries — but they never did say which organizations and which countries. Perhaps we shall see some of that. We already know of several international operations with that connection.

Ricardo Martinelli senior is in a Miami jail fighting extradition to Panama on illegal wiretapping charges. The Israeli equipment and Italian software for that operation obtained via Caribbean Holding Services, a company owned by the ex-president’s brother-in-law, Aaron Mizrachi. Caribbean Holding had an account at Financial Pacific which has been under investigation as a possible conduit for the proceeds of various criminal enterprises in which Ricardo Martinelli was allegedly involved. Mizrachi is a fugitive with a Financial Pacific related warrant out for his arrest. His son, Mayer Mizrachi, is out on bail under charges of having defrauded the Panamanian government on the sale of computer software.

The elder Ricardo Martinelli allegedly ran a pump and dump stock swindle scheme that in part relied on insider information and a hidden stake in Petaquilla Minerals and its environmentally notorious Petaquilla gold mine. Petaquilla Minerals was a Canadian company and the illegal trades in shares registered on the Vancouver stock exchange were conducted via a Danish bank largely through a stock exchange in Germany, with proceeds going to a “mirror company” in South Korea with a name similar to one of that country’s industrial giants. Two Financial Pacific accounts allegedly controlled by the ex-president, High Spirit and Jal Offshore, are suspected of further laundering the proceeds of the insider trading, with Jal Offshore notably being used by a number of alleged participants in Martinelli administration corruption to invest in shares of Facebook stock.

One might well say that if Financial Pacific was the brokerage financial clearinghouse for Martinelli era corruption, the bank associated with those operations was Banco Universal, which was liquidated over corruption charges. Its principal figure, former Vice President Felipe “Pipo” Virzi (who served in that post during the 1994-1999 PRD administration of Ernesto “Toro” Pérez Balladares) is related to the Martinellis by marriage and has been ordered to come in for questioning on new lines of the Financial Pacific investigation. Virzi, one of the original financiers of Financial Pacific, is out on bail with respect to a number of other charges. Another Martinelli insider, Riccardo Francolini, who had served as head of the state-owned Caja de Ahorros bank during the previous administration, has also been ordered to come in for questioning. Francolini is out on bail on a number of charges, including a role in the elder Martinelli’s purchases of media properties using funds ultimately derived from the Panamanian government.

The Financial Pacific probe is of activities during the Martinelli administration and shortly thereafter. The Odebrecht probe goes back to the firm’s arrival here to do business during the Martín Torrijos administration through the second year of the Varela administration, roughly 2008 through 2016. That time frame would encompass the Brazilian company’s large payments to current President Juan Carlos Varela’s political operations, but ordinary courts and prosecutors have no jurisdiction over Varela. The power to investigate, prosecute and try him lies with the National Assembly.

 

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