BELIZE'S MONEY-GRAM MONEY LAUNDERING INVESTIGATIONS

UNCLAS BELMOPAN 000229

SIPDIS

FOR WHA/CEN - JENNIFER VAN TRUMP

E.O. 12958: N/A
TAGS: SNAR EFIN EINV BH
SUBJECT: BELIZE'S MONEY-GRAM MONEY LAUNDERING INVESTIGATIONS


1. Recent GOB investigations into money laundering operations
conducted through a MoneyGram sub-agency in Belize have revealed
identity theft through the fraudulent use of the Belize City
Council's drivers license database during the period October 2007 to
December 2008.


2. Money Exchange International, the MoneyGram sub-agency which is
being investigated for money laundering activities in Belize, was
found to have provided a service called Instadollar to internet
gamblers in Peru, Turkey, and the United States. Foreign funds were
laundered, presumably under the guise of gambling transactions, when
they were sent to Belize using the MoneyGram facility. The money was
thereafter collected using identification details fraudulently
obtained from the Belize City Drivers License database. Over BZ$35
million (US $17.5 million) in fraudulent transactions is estimated
to have occurred during the 18-month period under investigation.


3. It is not yet clear how the Belize City Council's drivers
license database was compromised. However, the staff of the Belize
City Council as well as Fultec Systems Limited personnel had access
to the database. Fultec is a computer software company which was
contracted to set up the database system for the Belize City
Council. It is also a sister company to Ommi Networks Limited,
which was the master agent for MoneyGram International in Belize. In
turn, Money Exchange International was a sub-agent of Omni Networks
Limited. Allegations that the link between these sister companies
may be the reason for the breach of the database system have been
denied by a senior representative of Omni Networks and Fultec
Systems. To date, neither Omni Networks nor Fultec Systems has been
implicated by Belizean authorities in connection with money
laundering activities.


4. Nevertheless, the Central Bank of Belize has since terminated
MoneyGram's operations through the sub-agent, Money Exchange
International, as well as through the master agent, Omni Networks
Limited. These money transfer services have now been transferred to
a limited extent to the Belize Bank Limited.


5. The discovery of identity theft was made as part of a wider
criminal investigation being undertaken by Belize's Financial
Intelligence Unit into money laundering charges levied against Money
Exchange International and its principals. In January 2009, various
members of the Coye family (Marlene, Michael, Jude and Melonie
Coye),along with James Gerou and later Ernest Raymond Jr., who were
connected to the operations of the MoneyGram sub-agency, were
detained after BZ$ 1.5 million in cash was found in the Coye's
residence. The case against Money Exchange International and its
representatives is due to be heard before the Belize City
Magistrate's Court on Tuesday, June 16, 2009.

DIFFILY