Press "Enter" to skip to content

Opinion: The truth about money laundering

Justice Minister Duncan is apparently not aware of any report that indicates St. Maarten has a serious money laundering problem.

Maybe he is unaware of an estimate by the International Monetary Fund that the Caribbean region launders an estimated $50 billion every year. St. Maarten is part of that region.

The recently published crime analysis report about St. Maarten devotes a whole chapter to money laundering, but maybe this has escaped the minister’s attention as well. That happens.

“Sint Maarten is one of those Caribbean islands where criminals launder their money. This is possible because of the relatively strong economic growth due to tourism comes with an extensive monetary exchange via banks and cash transactions. In that situation criminals who launder money attract less attention. The economic growth and the favorable investment climate attract financially powerful investors who invest their money in large-scale projects, especially hotels and casinos.”

That’s only an introductory remark in the money laundering chapter.

The report notes that “in the past” St. Maarten attracted investors who had made their money in a dubious manner. “It is possible that they invested in real estate projects to create the possibilities to launder their criminal capital.”

Then the report becomes more specific: “Of a couple of these dubious foreign investors it is known that they built hotels and casinos in St. Maarten that are operational up to today and that give financially and in terms of employment an impulse to the tourism economy that is so necessary for the country.”

In a footnote, the authors refer to a list of casinos that was compiled in 2008. “That list contained ten casinos and four hotel-casinos of which a few are controlled by two Italian entrepreneurs and one Turkish entrepreneur against whom in previous years criminal investigations were conducted in the United States and Italy. All investigations had to do with money laundering, tax fraud and insurance fraud.”

The footnote is a clear reference to Francesco Corallo (Atlantis Casino), Rosario Spadaro (Casino Royale, Great Bay Beach Hotel casino and Diamond Casino) and Sudi Özkan (Princess Casino).

The report notes that the climate for money laundering in St. Maarten is “very favorable.” The structurally understaffed government is unable to supervise the large numbers of tourists as well relatively easy to move criminal money through the St. Maarten society and to launder it.”

The report’s authors admit that they have no information about how extensive money laundering is in St. Maarten. But they did establish the methods criminals are using to turn criminal proceeds into legal money.

The report refers to a local drugs smuggling group that launders money through the hotel and catering industry and the investment of criminal money in real estate in the Dominican Republic. This seems to be a reference to the Cappuccino Bar in Simpson Bay whose owner Hector Miguel Arrindell was involved in the Snowflake-investigation. This investigation revolved around the smuggling of more than 600 kilos of cocaine from Colombia via St. Maarten to the Netherlands. Arrindell was executed by a rival gang on May 25 of last year, a day before he had to appear in court. His brother Rodolfo, who was also a snowflake-suspect, was executed on July 7. The snowflake-investigation fell apart because a detective antedated a report after which the court declared the prosecution inadmissible.

The report mentions a remarkable example of criminal money coming to St. Maarten from the outside: the arrest of a man in Puerto Rico who carried $114,000 in cash. He claimed that he had found the money.

Information from the national detective agency RST shows that between 2008 and 2010 law enforcement confiscated more than $370,000 in criminal money from human smugglers, $3.7 million from drugs gangs and $9.2 million from swindlers. The better part of this last amount stems from the criminal investigation against Serge and Galina Slipachenko, a Latvian couple that specialized in forging bank references that enabled companies to contract loans for which they otherwise would not have qualified.

The chapter about money laundering runs twenty pages in the crime analysis report. That this has escaped the attention of our Justice Minister seems, to put it mildly, rather odd.
What is the conclusion of all this?

The report’s authors have this to say: “Criminals that invest frequently with cash in real estate in St. Maarten lead to higher real estate prices and therefore to a more expensive social climate. That lowers the prosperity-level and that could create a breeding ground for criminality because there are people who are unable to support themselves sufficiently. Higher real estate prices also affect the competitive position of bona fide real estate traders and it causes the sector to be dominated by money laundering instead of by market mechanisms. That could bring more crime to St. Maarten, for example because more criminals or their buddies settle down in neighborhoods where they have purchased real estate or because buying real estate offers even more possibilities to launder money, for instance by establishing pubs or restaurants in the purchased buildings.”

And it does not stop there: frequent money laundering also leads to doubts about the integrity of professions that are needed for real estate transactions like attorneys, notaries, fiscal experts and civil servants.

Is there a bright side to this story? There is. The report recommends that law enforcement makes combating money laundering a priority because – we’re paraphrasing the report liberally here – it is profitable for the government. In 2008 and 2009 there was 51 million guilders in suspect money on the island. If only a part of this amount could be confiscated through a criminal financial investigation, the report notes, this money will go back directly to the government. It could use the funds for combating crime and for programs to keep youngsters from choosing for a criminal career.

What is really happening? Justice Minister Duncan “seriously questions US money laundering claims” (The Daily Herald, Friday March 9) and says that statements in the American narcotics control strategy report about St. Maarten’s role in money laundering are exaggerated.

And the minister is not knowledgeable of any study or investigation that can confirm the report.”

For the record: On January 11 of this year Duncan was at a press conference in the A.C. Wathey Legislative Hall. To his right were Chief Prosecutor Mr. Hans Mos and Attorney General Mr. Dick Piar. The occasion: Piar presented the crime analysis report to Duncan.

Be First to Comment

    Leave a Reply

    This site uses Akismet to reduce spam. Learn how your comment data is processed.