The indictment of a former economics minister in Guatemala for money laundering -- some of the very same charges he faced in his home country -- shows how US prosecutors have been willing to pick up cases after local investigations have been stymied.
Acisclo Valladares Urruela, who worked in the administration of former President Jimmy Morales, is accused of laundering "close to $10 million of illegal drug proceeds and other ill-gotten money” used to bribe politicians between 2014 and 2018, prosecutors said in an August 5 Justice Department press release.
The former minister allegedly conspired with a major drug trafficker, a corrupt Guatemalan politician and a crooked Guatemalan bank employee -- none of whom are named -- to launder the dirty money, according to the criminal complaint. He “enabled the illegal drug trade by creating a demand for untraceable cash,” authorities said.
Valladares Urruela's alleged money laundering activities began with one politician's proceeds from a corruption scheme, according to the complaint, which did not name the politician. When the politician's money was finished being "cleaned," Valladares Urruela needed to find a new source of cash, prosecutors said.
He then allegedly took money from a trafficker who made it clear the funds were from cocaine, prosecutors said. A bank employee, who is cooperating with authorities after being arrested in 2019, acted as the bridge between Valladares Urruela and the illicit cash coming from the politician and later the drug trafficker, according to the complaint.
The former minister and the bank employee then hatched a sophisticated plan that included making paperless “mirror payments,” which saw equal amounts of money delivered to two individuals in different countries, according to the complaint.
While the first payment went to an unidentified South American country, the other passed through the US bank accounts of two companies in south Florida, triggering the US investigation.
Valladares Urruela also disguised the payments as false profits from shell companies, according to the complaint.
Illicit cash was even stuffed in backpacks, duffel bags and boxes of liquor disguised as holiday gifts. The payments were so “rapid” and “frequent,” Valladares Urruela joked that “these politicians must think money grows on trees,” according to the complaint.
After serving as economics minister from January 2018 to January 2020, Valladares Urruela fled Guatemala in January to elude separate corruption charges. His current whereabouts are unknown and Interpol has issued a red notice for his arrest.
InSight Crime Analysis
The formula has become commonplace in Central America: the US Justice Department prosecuting elites long suspected of having criminal ties after local investigations are thwarted.
The defunct United Nations-backed International Commission Against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala -- CICIG) and the anti-impunity unit (Fiscalía Especializada Contra la Impunidad -- FECI) of the Attorney General’s Office had long been investigating Valladares Urruela.
In May 2019, local prosecutors backed by the CICIG alleged that Valladares Urruela and other congressmen had paid out millions in bribes between 2012 and 2015 through then-Vice President Roxana Baldetti in order to buy votes for laws they had a vested interest in getting approved. In 2018, Baldetti was sentenced to more than 15 years in jail on separate corruption charges.
The CICIG opened another investigation that year into allegations that Valladares Urruela had also directed a spying network on opposition congress members and businessmen while he was an executive of the Tigo mobile phone service provider between 2012 and 2015. The company allegedly benefited from the corruption scheme that relied on bribing members of congress to pass at least one law that favored the company, according to a news release detailing the investigation.
CICIG investigators said in their report that Valladares Urruela "took advantage of his high position within the Tigo cell phone company to have access to sensitive information from opposition politicians and individuals linked to the business sector."
The Millicom telecommunications company, of which Tigo is a subsidiary, said it notified authorities about "potential improper payments," according to an October 2015 news release.
A third case was presented that same year by the CICIG and FECI as well, where investigators alleged Valladares Urruela was involved in a money laundering scheme using the sale of luxury apartments in Guatemala City. The investigation also implicated the shadowy political operator Gustavo Alejos Cámbara, who is currently jailed on corruption charges and has been accused of interfering with the selection process to appoint judges to two senior Guatemalan courts.
After losing his congressional immunity in January 2020 when a new administration took office, Valladares Urruela fled before authorities could arrest him on charges of illicit association and money laundering.
Shortly after the US charges against Valladares Urruela were announced, FECI Chief Juan Francisco Sandoval said in an August 6 radio interview with Con Criterio that what “US authorities are doing is confirming the investigation we did with the CICIG, an investigation that was branded as ideological."
Many critics of the CICIG said the international commission represented a so-called violation of Guatemala's sovereignty. The work of the CICIG and FECI had “threatened entrenched interests of powerful criminal groups” in Guatemala, according to Mike Allison, a Central America expert at the University of Scranton.
Valladares Urruela's indictment in the United States underscores the conflicted approach Washington has taken towards supporting anti-corruption efforts in Central America. The Justice Department has continued to take on money laundering and drug trafficking cases linked to high-level officials, even as the administration of President Donald Trump and its congressional allies withdrew support for local anti-corruption bodies.
While the US government initially backed the CICIG and its high-profile investigations, it later stood back as the anti-graft commission was attacked and later dismantled by then-President Morales. The former president turned on the CICIG when his family and some of his closest allies came under investigation.
Christine Wade, a Central America expert and political science professor at Washington College, told InSight Crime that “there can hardly be a more ironic turn of events than the outsourcing of justice” for Valladares Urruela to the United States.
“While many will no doubt be heartened to see the wheels of justice turning in US courts," Wade said, "the United States should be encouraging the strengthening of Guatemalan institutions so that corruption cases like these can be brought to justice in Guatemala."