Fact Check: Argentina

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The K Money Trail: Nevada court blows the lid off Mossack Fonseca, and there is a lot more coming

The U.S. District Court in Nevada has just issued a ruling that is a victory for those seeking to uncover the details of embezzlement and money laundering schemes involving Argentine public funds. Those schemes are known around the world as “The K Money Trail.”

In a 27-page opinion, Judge Cam Ferenbach agreed with the allegations made by ATFA member NML Capital.  The Judge ruled that the world-renowned Panamanian shell company factory – a firm known as Mossack Fonseca – stonewalled the release of documentation that would expose how a web of Nevada shell companies were used to launder tens of millions of dollars in stolen public funds.   Those companies have been attributed to K businessmen Lázaro Báez and Cristóbal López, who are both business associates of the Kirchner family and recipients of valuable government concessions.  Judge Ferenbach also ruled that Mossack Fonseca and its Nevada affiliate are one and the same, and, therefore, that the Panamanian head-office is subject to a discovery order that enables plaintiffs and others to unearth details about how Mossack Fonseca masterminded the K Money Trail that was used to move and hide millions of dollars in public Argentine funds.

As our readers in Argentina know well, an Argentine prosecutor named José María Campagnoli revealed the path of the “K Money Trail,” until the Kirchner government launched a failed attempt to remove him. That’s how the Kirchner administration deals with judges or prosecutors who dare to shed light on shady actions.  But the now-public documents produced in the Nevada case corroborates  Campagnoli’s report.  That confirmation adds powerful credibility to the efforts of investigators in Argentina and jurisdictions around the world. Judge Ferenbach agrees that the evidence is strong, and the investigation must go deeper.

At the same time, new evidence just surfaced that Cristóbal López isn’t just a friend of the Kirchner family, but a client. Not only is López tied directly to the Kirchner family’s hotel businesses – which are under investigation by an Argentine court as part of a vast money laundering scheme, but two López-owned companies are renting several properties owned by a Kirchner family company, Las Sauces, in the same building in Buenos Aires where an infamous money laundering financial center, SGI “La Rosadita,” operated.   The invoicing that was obtained by La Nacion shows that López has paid the Kirchner family at least 2.8 million pesos in the last eight months alone through this arrangement.   The more that is revealed about López’s business ties to the Kirchner family, the more  it appears he is another Lázaro Báez.

López was linked directly to the Kirchners’ hotel companies through a strange financial arrangement. Guests at a López-owned inn – “El Retorno,” near the resort town of Bariloche – saw that when they paid their bills at check-out, the recipient of the funds would show up on their bank statements as “Alto Calafate,” which is the flagship Kirchner hotel hundreds of miles away in Santa Cruz.  That connection becoming public, Clarin reported, sent Cristina “into a fury.”

The lengthy ruling that Judge Ferenbach just issued was correctly characterized by La Nacion as “unusually strong.” The new trove of documents obtained from the discovery order issued in the Seychelles Islands strongly hints that Mossack Fonseca was not a passive actor in this affair, but its mastermind: the architect of the K Money Trail.  Judge Ferenbach’s latest ruling will open up many more avenues to more evidence, documents and testimony.