Honduras Crime Group Used Natural Disaster to Launder Money

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A powerful drug trafficking group in Honduras allegedly used a natural disaster to launder money, showing how far organized crime groups are willing to go to maximize their revenues.

The Honduran crime group known as the “Cachiros” allegedly used the devastating tropical storm Agatha that swept through Central America in May 2010 to launder an estimated $6.4 million, reported La Tribuna.

The criminal organization reportedly set up several businesses that were hired by state companies to carry out 28 major infrastructure projects in the aftermath of the storm. Authorities believe the projects were supervised by companies that were either controlled by the Cachiros, or did not exist. 

Honduras’ Anti-Corruption Council (Consejo Nacional Anticorrupción – CNA) said one of the state companies implicated in the illegal scheme was the electricity company (Empresa Hondureña de Energía Eléctrica – ENEE), which allegedly paid inflated prices to an enterprise linked with the Cachiros. ENEE representatives, however, have rejected the accusations, saying they were unaware of links between the criminal organization and the companies they hired to carry out projects.

InSight Crime Analysis

Exploiting a natural disaster to launder money shows the extent to which organized crime groups are willing to go to increase their profits. To be sure, laundering money through large scale infrastructure projects is not a new strategy for organized crime groups in the region. What is noteworthy, however, is the rapidity with which the Cachiros appear to have jumped on the bandwagon after the natural disaster.

SEE ALSO: Elites and Organized Crime: The Cachiros

The fact that the crime group was able to so quickly and easily take advantage of the surge in government funding for the relief effort speaks not only to the Cachiros’ criminal ingenuity, but also to the weakness of Honduran institutions, and how indifferent many officials are to the harm caused by corruption in that country. 

Corruption has had deadly consequences in Honduras, both before and after the 2010 hurricane. A 2013 report on corruption in the country’s health sector showed that millions of dollars worth of medicine were removed from the state-owned medical supply company and were likely sold on the black market, threatening the lives of countless of Hondurans. 

Another report released in June 2016 showed corruption cases in Honduras rarely bring high-level officials to justice, spotlighting an ineffective and excessively bureaucratic system that allows corrupt officials to act with relative impunity.

Between 2008 and 2015 the Attorney General Office received 3,471 corruption complaints, of which only 283 were presented to the courts. More troubling still, the majority of these cases resulted in alternative sentencing that led to no jail time, little to no resistution, and gave the offender the opportunity to return to public service with no criminal record.

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