HomeNewsBriefPeru Sees Growth in Money Laundering
BRIEF

Peru Sees Growth in Money Laundering

MONEY LAUNDERING / 7 JUN 2013 BY CLAIRE O NEILL MCCLESKEY EN

Authorities in Peru have observed a sharp increase in the number of budget hotels, gambling houses, and other small businesses in the Lima metropolitan area used to launder criminal revenues, sparking concerns about whether Peru's illicit economy is growing just as fast as its legal one.

Criminal groups have taken advantage of Peru's growing economy and the subsequent growth in the service, entertainment, tourism, and construction sectors to launder money from drug trafficking, reported Reuters. According to police, stores that appear to turn a high profit while offering extremely low prices are one of the quickest and easiest ways to launder money.

One of the main methods used is through low-rent hotels. Anti-drug prosecutor Jorge Cotrina told Reuters there has been a rapid increase in the number of hotels with rooms priced between $10 and $30, which often report they are fully booked on the registers they give to authorities, when in fact many rooms are empty.

Official data indicates that illicit funds may make up 3.5 percent of Peru's Gross Domestic Product. According to an intelligence report from the Office of the Superintendent of Banking obtained by Reuters, the number of financial operations considered "suspicious" due to connections with illicit activities increased more than 80 percent in the past two years. Of the operations, 71 percent had suspected ties to drug trafficking.

InSight Crime Analysis

Peru, South America's fastest growing economy, has struggled to reign in money laundering. President Ollanta Humala's administration initially took an aggressive stance on the issue, passing a series of financial reforms to increase banking and gambling regulation in 2011, including the National Plan to Combat Money Laundering and Financing of Terrorism. However, despite frequent promises by officials such as Peru's justice minister to take greater action, as of March 2013 the government had yet to achieve any money laundering convictions.

Most disturbingly, allegations of money laundering have reached all the way to the top. Two of Peru's former presidents, Alejandro Toledo and Alan Garcia, have recently faced accusations of money laundering and illicit enrichment after their lavish real estate purchases raised eyebrows, prompting Peru's Attorney General's Office to open investigations into both men's finances.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

FEATURED / 15 MAR 2022

The $215,520 began its journey south in the parking lot of a Meijer grocery store in Louisville, Kentucky, a 19-hour…

COCAINE / 23 JUN 2023

A look at former candidate Carlos Pineda Sosa, a popular outsider who was recently disqualified from Guatemala’s presidential race.

BRAZIL / 8 AUG 2023

Legal protections for the Amazon rainforest are complicated by different domestic laws and competing interests across countries.

About InSight Crime

THE ORGANIZATION

InSight Crime Contributes Expertise Across the Board 

22 SEP 2023

This week InSight Crime investigators Sara García and María Fernanda Ramírez led a discussion of the challenges posed by Colombian President Gustavo Petro’s “Total Peace” plan within urban contexts. The…

THE ORGANIZATION

InSight Crime Cited in New Colombia Drug Policy Plan

15 SEP 2023

InSight Crime’s work on emerging coca cultivation in Honduras, Guatemala, and Venezuela was cited in the Colombian government’s…

THE ORGANIZATION

InSight Crime Discusses Honduran Women's Prison Investigation

8 SEP 2023

Investigators Victoria Dittmar and María Fernanda Ramírez discussed InSight Crime’s recent investigation of a massacre in Honduras’ only women’s prison in a Twitter Spaces event on…

THE ORGANIZATION

Human Trafficking Investigation Published in Leading Mexican Newspaper

1 SEP 2023

Leading Mexican media outlet El Universal featured our most recent investigation, “The Geography of Human Trafficking on the US-Mexico Border,” on the front page of its August 30…

THE ORGANIZATION

InSight Crime's Coverage of Ecuador Leads International Debate

25 AUG 2023

This week, Jeremy McDermott, co-director of InSight Crime, was interviewed by La Sexta, a Spanish television channel, about the situation of extreme violence and insecurity in Ecuador…