The U.S. Treasury on Thursday blacklisted an extensive Panama-based money laundering operation that allegedly helped multiple drug trafficking groups hide the source of their illicit gains through various companies, including Balboa Bank & Trust.
The U.S. Treasury's Office of Foreign Assets Control (OFAC) said the operation, led by Nidal Waked Hatum and Abdul Waked Fares, used 68 companies including Grupo Wisa - a holding company that includes real estate, construction, retail and media businesses.
Panama's banking regulator said it was taking control of Balboa Bank & Trust due to its alleged links to the money laundering scheme.
"(Treasury's move) puts at risk the interests of (Balboa) depositors ... given that the prestige of the banking group is in question, and a substantial portion of its liquid assets are located in foreign jurisdictions subject to seizure," the regulator said in a statement, adding there was no risk of contagion to Panama's banking system.
Treasury's targeting of the 68 companies freezes any assets they may have in the United States, and prohibits U.S. firms and people from dealing with them.
Balboa Bank, which has $44.1 million in capital and 172 employees, did not respond to phone calls to its offices.
Abdul Waked, president of Grupo Wisa and one of the two alleged leaders of the money laundering operation, called the accusations "false and unfounded" and said the company would work with authorities to clear up the "unfortunate confusion."
To launder money, OFAC said the two men used trade-based schemes like fake invoices, bulk cash smuggling, and a range of companies from real estate to retail, such as a luxury mall in downtown Panama City, the La Riviera chain of duty-free stores, and two Panamanian newspapers: La Estrella and El Siglo.
Treasury said it is allowing the two newspapers to keep printing and operating at least for the next two months.
Balboa Bank is owned by the Strategic Investors Group, a holding company formed in 2010 when it paid $15.5 million to acquire the local affiliate of Stanford Financial Group. That bank was also seized by Panama's regulators when the United States accused it of perpetrating a "massive" fraud.
Source: http://www.reuters.com
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