Guatemala’s Customs Scandal Reaches Private Sector

A Guatemala judge has barred 50 businesspeople from leaving the country, marking a new phase in the investigations into an enormous customs fraud ring that have already led to the incarceration of a former president and vice president. 

The judge ordered the ban following a request by prosecutors that the suspects not be permitted to leave the country, reported Prensa Libre. Last week, Guatemala’s Attorney General Thelma Aldana said more than 1,500 businesspeople participated in the customs fraud ring, commonly known as “La Linea,” which involved importers paying artificially lowered taxes in exchange for bribes. 

Among the suspects prohibited from leaving the country are South Korean importers, according to Prensa Libre.

Meanwhile, El Salvador’s Attorney General, Luis Martinez, announced prosecutors in that country have opened an investigation into former Guatemala President Otto Perez Molina and former Vice President Roxana Baldetti for money laundering, reported La Prensa Grafica. Guatemalan prosecutors have accused Perez Molina and Baldetti of running La Linea, and both are currently in prison facing charges of fraud, among others. 

InSight Crime Analysis

The decision by Guatemalan authorities to ban importers from leaving the country represents a new chapter in the investigations into La Linea. Until now, prosecutors have only taken significant legal action against those who operated the fraud ring, which included both government officials and non-state actors. Authorities are now targeting the importers complicit in the criminal network, who make up the third set of suspects involved in La Linea.

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The recent comments by Attorney General Aldana indicate the investigations into the private sector will likely be far-reaching, and could ensnare importers from a variety of nations. In addition to South Koreans, Salvadoran entrepreneurs are also suspected of having connections to alleged La Linea operators. In fact, a separate investigation into a Chinese importer is what led prosecutors to investigate the customs fraud ring in the first place.

As for Perez Molina and Baldetti, it is unclear how — or if — the money laundering investigation in El Salvador will affect their cases in Guatemala. However, it certainly appears the pressure is piling up on the disgraced presidential duo. In the last month, the two alleged top operators of La Linea have testified against the former president and vice president, including statements that the pair collected nearly half of all illicit earnings derived from the criminal network.