The US Treasury Department has designated a powerful Panama-based business family for heading an international money laundering network connected to drug trafficking, drawing renewed scrutiny on Panama as a hub for illicit profits.
On May 5, the US Treasury Department's Office of Foreign Assets Control (OFAC) blacklisted the Waked Money Laundering Organization (MLO) and its presumed leaders, Abdul Mohamed Waked Fares and Nidal Ahmed Waked Hatum, naming them "Specially Designated Narcotics Traffickers." Six associates of the Waked's and 68 companies thought to be part of their network were also targeted.
A day before the Treasury Department announced the Waked MLO designation, Nidal Waked was detained in Colombia during a joint operation between Colombian security forces and the US Drug Enforcement Administration (DEA) on charges of money laundering and bank fraud, reported El Espectador. The DEA described Nidal as "one of the world's most significant drug money launderers and criminal facilitators." He is expected to be extradited to the US to face charges in the Federal District Court of Southern Florida.
The Treasury's designation outlines an intricate network of international companies owned by or associated with the Waked's that were used to launder illicit drug profits, often relying on false commercial invoicing and bulk cash smuggling. The widely recognizable international duty free outfit La Riviera, which has branches at airports in more than 14 countries across Latin America, is among the businesses that have been implicated in the network.
Additionally, Panama's prominent Balboa Bank & Trust and multiple luxury shopping mall developments in Panama City are other Waked business holdings purportedly used in the laundering scheme. On May 5, Panama's superintendent of banks announced his agency would be taking control of the bank.
There has been no mention yet of what drug trafficking organizations the Waked MLO might have been working for.
Abdul Mohamed Waked holds Panamanian, Colombian, and Lebanese citizenship. Nidal Waked holds Panamanian, Colombian, and Spanish citizenship, according to La Prensa. In a statement issued through their attorneys, both men have denied wrongdoing and say they are cooperating fully with authorities.
InSight Crime Analysis
The exposure of the Waked network comes shortly after the massive leak of confidential files from the Panama-based law firm Mossack Fonseca, dubbed the Panama Papers, drew unprecedented international attention to Panama as a hub for suspect financial dealings.
SEE ALSO: Coverage of Money Laundering
The designations announced by the Treasury Department this week will likely fuel calls for Panama to reform its banking system first sparked by the Panama Papers leak in April. Yet the extent and breadth of the Waked network suggests US authorities have been investigating the Waked family for months, predating the document leak and ensuing international outcry.