In the wake of last Friday’s arrest of online currency company Liberty Reserve’s founder, Arthur Budovsky, and several accomplices who were charged by U.S. federal officials on Tuesday of operating a $6 billion money laundering operation, Costa Rica’s Chief Public Prosecutor Jorge Chavarría announced on Thursday that authorities here would begin to investigate possible political links to Liberty Reserve.
Meanwhile, The Tico Times this week uncovered information that appeared to link one of Liberty Reserve’s former key Costa Rican employees with President Laura Chinchilla. However, on Friday, Chinchilla denied those links and said she never met or worked with the woman.
On her LinkedIn page, attorney Angie Portela, 36, describes herself as an “advisor” to Liberty Reserve from December 2009 to December 2011. A source with knowledge of Liberty Reserve’s operations in Costa Rica, who asked to remain anonymous, confirmed that Portela worked at Liberty Reserve, performing legal and political tasks.
Portela’s LinkedIn page also says she worked as an “advisor” to Chinchilla in 2005, when the current Costa Rican president was a lawmaker.
Portela claims to have worked in the “Office of Legislator Laura Chinchilla” from February to July 2005, where her tasks were to “review, edit and propose alternatives for a bill of law for electronic signatures.”
“I don’t remember meeting anyone named Angie Portela, nor does that name sound familiar,” Chinchilla told The Tico Times in an email. “I remember perfectly the names of legislative advisers assigned to my office during the period when I served as a legislator, and among that group there was no one with that name. …
“Considering that a situation like this could be attributed to the irresponsible use of my name, and above all, a falsity contained in the work history of a presumed attorney, we are sending this matter to the legal office of the Costa Rican Attorneys Association,” the president stated.
The Tico Times attempted to check employment records at the Legislative Assembly, but the Assembly’s Financial Department Director Mario Delgado did not return an email with questions and several phone calls to his office on Thursday and Friday. Delgado’s assistant told a Tico Times reporter that he had asked another person in the office to deal with the newspaper’s request, and that person “took the day off.”
No one in the office answered the phones the rest of Friday afternoon.
Portela, reached by phone, said she would not comment due to “the ongoing investigation.”
After receiving Chinchilla’s response at 4 p.m. on Friday, The Tico Times learned through a public records search at the Supreme Electoral Tribunal that Angie Portela’s full name is María de los Ángeles Portela Rojas. She is a member of the Costa Rican Attorneys Association under that name.
The Tico Times was unable to reach Chinchilla or her press secretary after learning the new information.
Chinchilla, who served as a lawmaker for the ruling National Liberation Party from May 2002 to April 2006, is a public security expert who has focused on fighting organized crime throughout her career. From 1996-1998, she served as Costa Rica’s public security minister, and as vice minister from 1994-1996. She became first vice president in 2006, and in 2010, the first woman elected to the presidency in Costa Rica.
The president’s personal webpage notes that, “as a lawmaker, [Chinchilla] presided over various commissions from which she promoted several laws of great impact in the areas of participatory government, public sector efficiency, security, crimes against minors, domestic violence and fighting corruption.”
During the 2009-2010 presidential race, Chinchilla campaigned on a slogan of “honest and firm,” vowing to improve public security and fight organized crime, which has expanded throughout Central America, mostly driven by illicit drug trafficking.
Despite her broad career in public service focused on public security, her administration has been plagued by several scandals involving those close to her. On May 16, Chinchilla announced in a televised address the resignation of two key administration officials – Presidency Vice Minister Mauricio Boraschi, also the head of Costa Rica’s Office of Intelligence and Security (DIS) and the country’s anti-drug commissioner, and presidential adviser Irene Pacheco. Former Communications Minister Francisco Chacón had resigned the previous day over what has become known as “the plane of shame” scandal, in which the president twice traveled on a private jet owned or loaned by Gabriel Morales Fallón, a Colombian who allegedly had introduced himself to Chacón under a false name and was suspected by the Colombian government of having links to international drug traffickers. Morales denies the links.
In 2012, an investigation revealed massive corruption in the construction of a road along the northern border with Nicaragua, secured with emergency government funds and carried out with little oversight, including a $5.6 million contract granted to a company that had no machinery and had never previously received a government contract.
In the past three years, 15 government ministers have resigned from or been asked to leave Chinchilla’s administration. Meanwhile, the threat to Costa Rica by organized crime and drug traffickers continues to mount.
Liberty Reserve, which U.S. authorities say was processing more than 12 million financial transactions annually, at a value of $1.4 billion per year by 2013 and had accounts in at least five Costa Rican banks, operated in Costa Rica for seven years before it was dismantled by the biggest joint money laundering operation ever conducted by U.S. officials. At least 17 countries participated in the investigation.
And on Friday, the body of a 26-year-old turtle conservationist was discovered on a Caribbean beach in Costa Rica, the victim of suspected drug traffickers. Jairo Mora Sandoval was kidnapped and murdered, along with a group of foreign conservationists who survived the attack, in what colleagues believe was retaliation for statements he made to a local daily newspaper saying conservationists were being harassed by drug traffickers and turtle poachers in the area.
A Liberty Reserve ‘advisor’
On her LinkedIn profile, Portela says her duties at Liberty Reserve were to “write, review and edit reports, opinions, policies and other documents,” as well as to, “write and administer client and employee contracts, conduct and coordinate research into a variety of legal issues,” “provide analysis and counsel on legal issues,” and “litigation and arbitration management.”
Portela also said on her profile that she studied at the University of San José in 1993 as an “International Technician in Risk Management Systems of Money Laundering and Terrorism Financing.”
In a conversation with The Tico Times, a source who worked at Liberty Reserve referred to Portela as a company attorney. Portela corresponded with Liberty Reserve clients by using the email address email@example.com. In response to an angry client who said he was having trouble obtaining his funds from Liberty Reserve, Portela advised, “As to a third party involved in this communications [sic] I respectfully ask you to not take advice from people not related to L.R.”
In the correspondence, Portela also gives other legal advice.
She also is listed as “agente residente,” or registered agent, for at least four Liberty companies: Worldwide E-Commerce Business S.A. (WEBSA), Silverhand Solutions & Technology S.A., Liberty Reserve Solutions CR S.A., and World Treasure Consulting & Management S.A. As a registered agent, she received all legal correspondence involving the companies, most alleged by the U.S. government to be Liberty shell companies used to obstruct the investigation (U.S. officials ordered WEBSA funds in a Banco Nacional account seized on Tuesday).
WEBSA and Silverhand offices were raided on May 21. The previous day, a judge ordered banking secrecy laws suspended on accounts for all four businesses.
A black eye, or a major victory?
Faced with last Friday’s raids of Liberty Reserve businesses and properties, Tuesday’s indictment in New York of several key participants, and growing outrage that such a large criminal operation was taking place here, Costa Rican officials are portraying recent events as a sign of success in the country’s bilateral battle with the U.S. to fight organized crime.
At a Friday press conference at Casa Presidencial, Bernardita Marín, associate director of the Costa Rican Drug Institute, said the operation to dismantle Liberty Reserve was initiated by Costa Rican authorities, not the U.S. Celso Gamboa, who replaced Boraschi as head of DIS and presidency vice minister, and Gilberto Serrano, president of the National Banking Association, also attended the press conference.
“In the case of Liberty Reserve, two national financial institutions detected unusual transactions through the monitoring procedures in place,” Marín said in a press release. At the conference, she added, “Thanks to the efforts of both the U.S. and Costa Rican governments, the biggest money laundering case ever was uncovered,” adding, “It wasn’t by accident.”
Marín said Costa Rican authorities were aware of the Liberty Reserve operation since 2009. According to the U.S. federal indictment, Costa Rica’s Financial Institution Superintendency notified Liberty that it needed to apply for a license to operate as a money transmitting business.
Marín also stressed that not all of the $6 billion that moved through the company in the past seven years – which represents roughly 25 percent of Costa Rica’s entire economy – was managed through the Costa Rican financial system.
She said Costa Rican officials seized Liberty funds on three separate occasions – in 2011, 2012 and 2013 – although the U.S. indictment mentions only one seizure of $19.5 million, after Budovsky, Allan Hidalgo and Azzeddine El Amine allegedly began emptying Liberty Reserve bank accounts in Costa Rica of “millions of dollars.” They transferred those funds to a bank account in Cyprus held in the name of a shell company controlled by Budovsky and El Amine, and then to another account in Russia, the indictment alleges.
On Wednesday, according to the Costa Rican Prosecutor’s Office, a court ordered the seizure of the “financial products and services” of Budovsky, Maxim Chukharev – who is under arrest in Costa Rica awaiting extradition to the U.S. – Worldwide E-Commerce Business S.A. (WEBSA), and Grupo Lulu Ltda., as well as accounts in Banco Nacional, Banco de Costa Rica, BAC San José, Bancrédito and Davivienda.
The Prosecutor’s Office also stated that they, along with the Judicial Investigation Police, began a criminal investigation on March 7, 2011, following a report of suspicious activity filed by Banco Nacional and Bancrédito.
Costa Rican law enforcement officials first met with their U.S. counterparts on Dec. 5, 2011, the Costa Rican Prosecutor’s Office said. A request for banking secrecy laws to be lifted against Liberty Reserve was filed on Dec. 13, 2011.
Portela said she left Liberty Reserve in December 2011, after working for the company for more than two years.
Liberty accounts that have been seized in Costa Rica since January 2012 include $17 million in Grupo Mutual Alajuela, $1.8 million in Bancrédito and $1 million in Banco Lafise, the Prosecutor’s Office stated.
The Prosecutor’s Office also released a detailed report of the actions U.S. and Costa Rican officials took to investigate and prosecute the case, beginning in March 2011.
Fate of other players?
Another question is what will happen to other players in the Liberty Reserve operation, particularly a group of Costa Ricans who remain at large. The Prosecutor’s Office will not comment on Allan Hidalgo, aka “Allan García,” Ahmed Yassine, aka “Alex,” or Kelsin Antonio Varela Figueroa, who is listed in public documents as the president of Liberty Reserve Solutions CR S.A.
It is unclear if an arrest warrant has been issued for any of the men. Yassine and Hidalgo are named in the U.S. indictment, although sources told The Tico Times that they could not be extradited to the U.S. because they are Costa Rican nationals. The Costa Rican Constitution prevents nationals from being extradited, except in very specific drug- or terrorism-related cases.
According to public records, Hidalgo, 28, who is listed as president of Liberty Reserve S.A., has not left the country since arriving from Colombia in September 2012.
Yassine, 42, a Moroccan who became a naturalized Costa Rican following a November 2006 marriage (he and his Costa Rican wife were divorced in March 2010, according to public records), has not left Costa Rica since returning from Spain in October 2012.
Confidentiality contracts that Liberty employees were forced to sign state that Yassine is Liberty’s “legal representative.” A search of the Attorneys Association registry does not show that he is an affiliate.
The confidentiality contract requires employees to “maintain in strict confidentiality all information” about the company, including “administrative affairs, operations and financial details” for 15 years after employees leave the company. The contract also requires employees to inform company operators if they receive a judge’s warrant to reveal confidential information about the company.
A search of public documents shows that Hidalgo, who is married and has no children, claimed an income of ₡920,833.33 in the past 12 months, the equivalent of about $1,841.67. He is also listed as treasurer of Inversiones Hidalgo Jiménez S.A., president of Silverhand Solutions & Technology S.A. (which prosecutors allege was one of the many Liberty shell companies), president of World Treasure Consulting & Management S.A.(another suspected shell company) and secretary of Liberty Reserve Solutions CR S.A.
Last Friday, agents raiding Budovsky-linked homes and business seized over $1 million in luxury automobiles alone, including two Jaguars, three Rolls Royces and a Mercedes Benz. According to sources, some – if not all – of the automobiles were paid for in cash.
On its blog on Thursday, the U.S. Embassy in Costa Rica referred to the case, asking, “Why did the accused come to Costa Rica, in the first place, to set up an illegal business? Why did they renounce their U.S. citizenship, and in the case of the mastermind, Arthur Budovsky, who seems to have married a Costa Rican empanada vendor, without ever having seen him, in exchange for ₡200,000 [$400]?
“The answer is simple,” the embassy blog said. “They suspected that Costa Rica did not have the laws to detect and block their operations. … They committed a grave error.”