Honduras: Drug Trafficking and the Economy

Money laundering has positive economic effect on economies, but also impoverishes the quality of institutions leading to dramatic effects on quality of life in society.

Monday, October 12, 2015

The excellent analysis by Norma Lezcano in his article on Estrategiaynegocios.net, on the US Treasury Department´s inclusion of members of the powerful Rosenthal family in the list of the Office of Foreign Assets Control (OFAC) can be extrapolated to all Central American countries, and is a warning to the governments of the region, where drug trafficking has ingratiated itself and is creeping through state institutions, weakening them by making them serve criminal aims, and preventing them from carrying out their duties properly.

Referring to the forced liquidation ordered of Banco Continental, owned by the Rosenthals, the analyst notes that "... The liquidation of this institution (which generated 11,000 direct jobs, 25,000 indirect ones) is the clearest effect of the structural quick fixes of financing the real economy with money which comes from crime. These "quick fixes" have been put in place by politicians (regardless of party), business, regulatory institutions, governments ... and not for one or two years, but for decades. "

The inclusion of the Rosenthals and their companies in the OFAC list, may have been a consequence of the testimony of key members of the Los Cachiros cartel, "... imprisoned in the United States, where they handed themselves over for fear of being murdered in Honduras . ... their decision to speak (in exchange for leniency in their sentences) is what brought about the 'Rosenthal case' and caused the Honduran elite to tremble. "

"... The point is, experts say, the drug circle starts with producers, distributors and continues with vendors and ends with the entry of profits into the real economy, and this is where the responsibilities are expanded, as well as the dramatic consequences which occur when the money circuit is uncovered. "

..." This is not unique to Honduras, it occurs in all economies permeated by drug trafficking," said one expert consulted by E & N.

More on this topic

Money Laundering in Central America

March 2017

The housing market, casinos, concert halls, and the livestock sector are all used to launder money in Central American countries.

Excerpted from the report "International Narcotics Control Strategy Report, Volume II, Money Laundering and Financial Crimes" by the  US State Department:

Rosenthal Organization Profiled by the US

October 2015

Diagram showing the people and companies identified by actions related to money laundering, according to the U.S. Department of the Treasury´s Office of Foreign Assets Control.

Rosenthal Money Laundering Organization Chart.

Regarding the Liquidation of Banco Continental

October 2015

The US Treasury Department has advised that it will not sanction individuals or institutions participating in the liquidation provided that those transactions do not benefit any individual or entity other than those previously identified by the OFAC.

The Office of Foreign Assets Control (OFAC) of the Treasury Department of the United States has issued a statement regarding the decision of the Honduran authorities to liquidate Continental Bank, after identifying the institution and several of its executives as being involved in drug money laundering:

Honduras: Forced Liquidation of Banco Continental

October 2015

It has been announced that deposits up to $9,200 (L200,000) per person will be returned, and then payments to employees, depositors and others, noting that "... there are sufficient resources to address them all."

The cause is the inclusion of the institution in the list of the U.S Office of Foreign Assets Control, and the freezing of its assets abroad.

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