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03TEGUCIGALPA1069 2003-05-07 21:38:00 SECRET Embassy Tegucigalpa
Cable title:  

ADVISORY OPINION REQUEST 212(A)(2)(I) --

Tags:   CVIS KFRD EFIN HO 
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This record is a partial extract of the original cable. The full text of the original cable is not available.

072138Z May 03
					  S E C R E T SECTION 01 OF 06 TEGUCIGALPA 001069 

SIPDIS

STATE FOR CA/VO/L/A AND WHA/CEN

E.O. 12958: DECL: 05/07/2013
TAGS: CVIS KFRD EFIN HO
SUBJECT: ADVISORY OPINION REQUEST 212(A)(2)(I) --
INDIVIDUALS INVOLVED IN BANHCRESER SCHEME IN HONDURAS


Classified By: Acting Consul General Victoria Coffineau for reasons 1.5
(b) and (d)



1. (U) This is an action request. See paragraphs 6 and 17.



--------------------------


SUMMARY AND ACTION REQUEST


--------------------------





2. (SBU) In July 2001, the Attorney General of Honduras
initiated an investigation of certain activities of the
principal officers of Banco Hondureno de Creditos y Servicios
S.A. (Banhcreser). Previously, the National Banking and
Insurance Commission intervened due to the insolvency of the
bank, and determined that three (3) related businesses
(Creditos y Servicios S.A., a.k.a. Creser Visa, Arrendadora
Hondurena de Creditos, S.A., a.k.a. Ahcreser, and Ancres
Ltd.) were created to convert public funds to personal use
without authorization from the Honduran Central Bank.
Pursuant to Honduran law (Article 72 of the Financial
Institutions Law), this is a criminal act. There are at
least twenty-four (24) individuals that post has identified
as possibly being involved in these schemes, and who possibly
engaged in money laundering and other financial crimes by
converting more than USD 5.9 million of Banhcreser funds to
personal use. Post requests permission to permanently revoke
the visas of these individuals pursuant to 212(a)(2)(I). END
SUMMARY.



--------------------------


BANHCRESER BACKGROUND


--------------------------





3. (SBU) In July 2001, the Attorney General of Honduras
initiated an investigation of certain activities of the
principal officers of Banco Hondureno de Creditos y Servicios
S.A. (Banhcreser). Previously, the National Banking and
Insurance Commission intervened due to the insolvency of the
bank, and determined that three (3) related businesses
(Creditos y Servicios S.A., a.k.a. Creser Visa, Arrendadora
Hondurena de Creditos, S.A., a.k.a. Ahcreser, and Ancres
Ltd.) were created to convert public funds to personal use
without authorization from the Honduran Central Bank.
Pursuant to Honduran law (Article 72 of the Financial
Institutions Law), this is a criminal act.



4. (SBU) Information at post obtained from several
well-placed sources, in and outside the government of
Honduras, indicates that the Banhcreser officials have
engaged in money laundering as well as other fraudulent
financial transactions and have entered the U.S. to engage in
the same.



5. (S) Reftel discussed a detailed report dated February 6,
2002 provided to post by the Financial Crimes Unit of the
Honduran Attorney General,s Office (Ministerio Publico).
Additionally, the Chief of the Anticorruption Unit of the
Attorney General,s Office (comparable to an Assistant
Attorney General in the United States Attorney,s Office),
Soraya Morales, has provided ConOffs with further information
regarding the criminal charges pending against all of the
individuals named in this cable. One of the attorneys
(comparable to a Deputy Attorney General in the United States
Attorney,s Office) working on the cases for the Attorney
General, Susy G. Coello, has also provided information. Post
emphasizes that the identity of these two (2) individuals
should be kept strictly confidential, due to grave concerns
for their safety.



6. (C) The individuals named in this cable have been charged
with crimes by the Honduran Attorney General. While there
are other people that post believes to be involved in these
money laundering schemes, at this time we are only requesting
that the individuals against whom the Honduran authorities
have taken legal action be added to the list of money
launderers and be entered into the Department,s Lookout
system as 2-I.



7. (C) The fact that the individuals involved have not yet
been convicted of criminal offenses under Honduran law is not
dispositive of these cases. These are wealthy Honduran
citizens with strong political connections. Embassy sources
(including those within the Honduran Attorney General,s
Office) indicate a strong possibility of bribery or other
improper behavior on the part of various defendants in
connection with pending legal proceedings. Institutional
corruption is endemic in Honduras, and judicial corruption is
common.



--------------------------


THE CRESER VISA SCAM


--------------------------





8. (SBU) Through an entity known as Creditos y Servicios S.A
(Creser Visa) the eleven (11) board members absconded with
approximately USD 1,217,647. Members of the Board of
Directors Afif Dieck, Antonio (Jack) Afif Kattan, Carlos
Chahin Chahin, Rene Francisco Kattan Fernandez, Omar Abufele
Salomon, Roberto Constantino Larach Chahin, Constantino
Papadakys, Omar Isaac Monterroso Andonie, Luis Felipe
Aguilar, Luis Felipe Mendieta y Leonel Sosa converted
207,000,000 Lempiras (approximately USD 1,217,647).



9. (C) On February 19, 2002, the Attorney General initiated
criminal proceedings and sought "orders of capture" for
Creser Visa directors Emin Abufele Salomon (President), Omar
Abufele Salomon, Georgette Chahin Chahin, Santos Reynaldo
Casco Gomez, Zacarias Papadakys, Constantino Papadakys, Afif
Dieck, Daniel Shucry Kaffati Canahuati, Omar Isaac Monterroso
Andonie, Miguel Felipe Canahuati Yacaman (Directors), Antonio
Teodoro Sansur Dacarett (Secretary), and Luis Felipe Mendieta
(General Manager), and Christianne Elizabeth Arias Fernandez,
General Manager of Banhcreser. Afif Dieck and Christianne
Elizabeth Arias Fernandez appeared before the court
voluntarily, but the court declined to issue orders of
capture on the other board members. The Attorney General
opined that Judge Bolivar Castellanos abused his judicial
authority in so denying the request for orders of capture.
However, the judge did see fit to issue orders forbidding
Afif Dieck, Antonio (Jack) Afif Kattan, Carlos Chahin Chahin,
Rene Francisco Kattan Fernandez, Omar Abufele Salomon,
Roberto Constantino Larach Chahin, Constantino Papadakys,
Omar Isaac Monterroso Andonie, Luis Felipe Aguilar, Luis
Felipe Mendieta, Leonel Sosa, Lorena Sanchez, Chritianne
Elizabeth Arias Fernandez and Luis Menieta from leaving
Honduras, and ordered that the Honduran Office of Migration
be alerted not to allow these individuals to travel to the
United States.



--------------------------


THE AHCRESER SCAM


--------------------------





10. (C) The Honduran Banking Commission determined that
Ahcreser was an entity used to divert Banhcreser funds in the
sum of 169,000,000 Lempiras (approximately USD 994,117).
Both the Banking Commission and the Attorney General accused
Nicolas Chahin Chahin, Antonio Teodoro Sansur Dacarett,
Antonio (Jack) Afif Kattan Kattan, Daniel Shucry Kafati
Canahuati, Omar Abufele Salomon and Constantino Papadakys of
criminal activity related to the transfer of the Banhcreser
funds to Ahcreser. According to the Attorney General, Judge
Mildra Castillo abused her authority and violated principles
of due process when she summarily ruled in favor of the
defendants and against the Attorney General. The Attorney
General appealed the decision, and on March 19, 2003 the
Supreme Court of Honduras overruled the lower court,s
decision and reinstated the criminal charges.



--------------------------


BANHCRESER AND THE PHANTOM COMPANY ANCRES LTD


--------------------------




11. (SBU) On February 19, 2002, the Attorney General
initiated criminal proceedings against Carlos Chahin Chahin
(President), Santos Reynaldo Casco Gomez (Vice President),
Nicolas Chahin Chahin (Treasurer), Antonio Teodoro Sansur
Dacarett (Secretary), Antonio (Jack) Afif Kattan Kattan
(Director), Emin Jorge Abufele Salomon (Director), Leonel
Osbaldo Medrano Irias (Director) -- all on the Board of
Directors of Banhcreser -- and Caupolican Zuniga Maradiaga
(General Manager) and German Licona Vega (Assistant Manager).




12. (SBU) The above-referenced criminal charges focused on
the misappropriation of USD 3,700,000 deposited in HSBC
Republic National Bank in Miami, Florida on June 5, 1998
(account number 2027549F). When the defendants deposited the
funds in a foreign banking institution, they improperly
rendered the funds unavailable for their intended purpose --
to directly and indirectly guaranty credit, pay "creditos" to
other institutions and caused Banhcreser to be
undercapitalized and ultimately insolvent. All of this took
place without the knowledge and consent of investors, many of
whom lost their life savings.



13. (C) According to the Anticorruption Unit of the Honduran
Attorney General,s Office, the Banhcreser officials set up a
Bahamas-based phantom financial institution called Ancres
Ltd., and covertly deposited the USD 3.7 million in HSBC to
establish a line of credit. The money was used as
collateral, and they eventually borrowed more than USD 3
million through the shell company. This entire scheme was
set into motion by the Directors of Banhcreser from 1998 to


2001. Under Honduran law, these transactions were illegal
and violated banking regulations and laws, including laws
that prohibit the use of such funds as collateral for
Ancres, line of credit.



14. (SBU) Additionally, The Attorney General believes that
the evidence proves that the covert activities were
intentional -- done by the Banhcreser directors and
principals for the express purpose of hiding the true
financial condition of the institution. Once the Banking
Commission intervened, it asked HSBC to return the reserves,
but HSBC declined since Ancres had defaulted on the loans.




--------------------------


THE BOTTOM LINE


--------------------------





15. (SBU) The information delineated in this cable more than
meets the "reason to believe" standard set forth in INA
Section 212(a)(2)(I).



16. (S) It is important to reiterate that the fact that the
individuals involved have not yet been convicted of criminal
offenses under Honduran law is not dispositive of these
cases. These are wealthy Honduran citizens with strong
political connections. Embassy sources (including those
within the Honduran Attorney General,s Office) indicate a
strong possibility of bribery or other improper behavior on
the part of various defendants in connection with pending
legal proceedings. Institutional corruption is endemic in
Honduras, and judicial corruption is common. Nevertheless,
on March 19, 2003, the Supreme Court of Honduras overruled a
lower court,s decision and reinstated the criminal
proceedings against the Banhcreser officials. Investors
(including American investors) in Banhcreser, Creser Visa and
Ahcreser have suffered significant financial losses as a
result of the criminal behavior of these individuals.



17. (C) A number of the persons involved in these three (3)
schemes are reputed to have engaged in a pattern and practice
of fraudulent financial practices in Honduras for several
years -- including Emin Jorge Abufele Salomon, Omar Abufele
Salomon, Carlos Chahin Chahin, Nicolas Chahin Chahin, Daniel
Shucry Kafati Canahuati, Antonio Afif Kattan Kattan, Rene
Franciso Kattan Fernandez, Roberto Constantino Larach Chahin
and Miguel Felipe Canahuati Yacaman. Post requests that the
names of these twenty-four Honduran nationals be added to the
list of money launderers and that their names be entered into
the Department,s Lookout system as 2-I visa ineligibilities.



--------------------------


INDIVIDUALS INVOLVED IN SCHEMES


--------------------------





18. (SBU) Below is the information for the individuals
involved in these schemes:

a. Name: Abufele Salomon, Emin Jorge
Nat: Honduran
DOB: 25 AUG 1943
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: 004437
NOE: Multiple Entries

b. Name: Abufele Salomon, Omar
Nat: Honduran
DOB: 04 OCT 1941
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: 097998
NOE: Multiple Entries

c. Name: Chahin Chahin, Carlos
Nat: Honduran
DOB: 19 OCT 1941
Sex: M
VLO: P2I
COB: Honduras
Ppt: Unknown
Visa: Believe B1B2
PPN: Unknown
NOE: Unknown

d. Name: Chahin Chahin, Georgette
Nat: Honduran
DOB: Unknown
Sex: F
VLO: None
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown
e. Name: Chahin Chahin, Nicolas
Nat: Honduran
DOB: 07 NOV 1954
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: 354773
NOE: Multiple Entries

f. Name: Dieck, Afif
Nat: Honduran
DOB: Unknown
Sex: M
VLO: Unknown
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown

g. Name: Kafati Canahuati, Daniel Shucry
Nat: Honduran
DOB: 23 JUL 1955
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: 033013
NOE: Multiple Entries

h. Name: Kattan Kattan, Antonio Afif (a/k/a Kattan, Jack

Afif)
Nat: Honduran
DOB: 02 SEP 1948
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: 414818
NOE: Multiple Entries

i. Name: Kattan Fernandez, Rene Francisco
Nat: Honduran
DOB: 04 JUL 1945
Sex: M
VLO: P2I
COB: Honduras
Ppt: Unknown
Visa: Believe B1/B2
PPN: Unknown
NOE: Unknown

j. Name: Larach Chahin, Roberto Constantino
Nat: Honduran
DOB: 03 SEP 1958
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: 739500
NOE: Multiple Entries

k. Name: Papadakys Marinakis, Constantino
Nat: Honduran
DOB: 12 JAN 1948
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: Unknown
NOE: Multiple Entries

l. Name: Papadakys, Zacarias
Nat: Honduran
DOB: Unknown
Sex: M
VLO: P2I
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown

m. Name: Monterroso Andonie, Omar Isaac
Nat: Honduran
DOB: 08 DEC 1960
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: A149170
NOE: Multiple Entries

n. Name: Aguilar, Luis Felipe
Nat: Honduran
DOB: Unknown
Sex: M
VLO: P2I
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown

o. Name: Mendieta, Luis Felipe
Nat: Honduran
DOB: Unknown
Sex: M
VLO: P2I
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown

p. Name: Sosa, Leonel
Nat: Honduran
DOB: Unknown
Sex: M
VLO: Unknown
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown

q. Name: Casco Gomez, Santos Reynaldo
Nat: Honduran
DOB: Unknown
Sex: M
VLO: Unknown
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown

r. Name: Canahuati Yacaman, Miguel Felipe
Nat: Honduran
DOB: 06 OCT 1954
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: 793452
NOE: Multiple Entries

s. Name: Sansur Dacarett, Antonio Teodoro
Nat: Honduran
DOB: 15 JUL 1945
Sex: M
VLO: P2I
COB: Honduras
Ppt: Regular
Visa: B1/B2
PPN: Unknown
NOE: Multiple Entries

t. Name: Arias Fernandez, Christianne Elizabeth
Nat: Honduran
DOB: 29 MAR 1964
Sex: F
VLO: P2I
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown
u. Name: Sanchez, Lorena
Nat: Honduran
DOB: Unknown
Sex: F
VLO: Unknown
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown

v. Name: Medrano Irias, Leonel Osbaldo
Nat: Honduran
DOB: 02 OCT 1946
Sex: M
VLO: Unknown
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown

w. Name: Zuniga Maradiago, Caupolican
Nat: Honduran
DOB: 19 DEC 1948
Sex: M
VLO: P2I
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown

x. Name: Licona Vega, German
Nat: Honduran
DOB: 05 SEP 1954
Sex: M
VLO: P2I
COB: Honduras
Ppt: Unknown
Visa: Unknown
PPN: Unknown
NOE: Unknown
Palmer