Criminal and rebel groups from Colombia are believed to be laundering money through the sale of smuggled cigarettes produced by a company owned by the President of Paraguay, using a transnational contraband networks believed to "wash" drug trade profits.
Police investigators from the Netherlands have been meeting with their Colombian counterparts to exchange information on contraband networks that move Paraguayan cigarettes into Colombia via the islands of Aruba and Curacao, according to an investigation by Colombian newspaper El Tiempo.
According to El Tiempo, which spoke to unnamed state sources connected to the investigation, the trade earns criminals an estimated $209 million a year and is used to launder drug money by the 59th and 19th Fronts of the Revolutionary Armed Forces of Colombia (FARC), and by Marcos Figueroa, alias "Marquitos," the leader of a criminal group based in the department of La Guajira that is now part of the Urabeños network.
SEE ALSO: Coverage of Paraguay
The cigarettes are produced by Tabesa, a tobacco company founded and owned by Paraguayan President Horacio Cartes. They are legally exported to Aruba and Curacao before being shipped on to the special customs area of Maicao in La Guajira, from where a substantial proportion disappears into the illegal market.
The Dutch investigators also documented a meeting in 2012 between an unnamed minister in Cartes' government and the cigarette companies currently under investigation.
InSight Crime Analysis
Paraguay is at the heart of the Latin American contraband cigarette trade and President Cartes' company Tabesa has been consistently identified as the source of illegal cigarettes flooding into neighboring states.
While the sale of contraband cigarettes is a hugely lucrative criminal activity in its own right, the trade is also closely linked to money laundering. Cartes himself has faced numerous accusations of money laundering, and was subject to a multi-agency investigation by US authorities, according to a 2010 diplomatic cable published by Wikileaks, which identified him as the head of a transnational money laundering network.
Much of Paraguay's contraband trade is focused on Argentina and Brazil -- its neighbors in the Triple Frontier region that is the epicenter of the country's contraband trade. However, the networks that facilitate the trade are transnational, accessible and firmly established, so it is not surprising that Colombian criminal groups -- which also use contraband from locations such as Panama's free trade zone to launder drug money -- are seeking to take advantage.