Mexico and the US, in search of the hidden (and corrupt) fortune of the anti-drug czar García Luna
The Government of Mexico sent a letter addressed to inmate number 59745-177 of the Brooklyn Metropolitan Detention Center in New York on October 18, 2021. Imprisoned for drug trafficking and organized crime in the United States, Genaro García Luna received official notice that the authorities of his country were also going to open another legal front against him. “Deliberately and illegally, you obtained or used a total of at least 250 million dollars that rightfully belongs to the United Mexican States,” the document reads. The civil lawsuit, filed by the Financial Intelligence Unit, alleges that the former Secretary of Public Safety took advantage of his contacts after leaving his post and led a corrupt scheme that diverted public funds to create a real estate “empire” in Florida. The bomb was leaked to the media this week practically at the same time that García Luna sat in the dock at the start of the criminal trial in New York, in which he is accused of collaborating with the Sinaloa Cartel for more than 20 years. years. They are two different tracks that follow the trail of corrupt money and that run in parallel. The White House is pursuing, in part, the drug bribes and the Mexican authorities are after him for fraud and embezzlement, with damages amounting to up to 750 million dollars.
The legal battle of the United States and Mexico against García Luna is going on two separate tracks. The trial in New York is a criminal case against the former head of the Federal Police, but it also has an economic derivative, since he is accused of receiving “tens of millions of dollars” in bribes from drug trafficking since 2001, within a few months that he took over as director of the Federal Investigation Agency (AFI), created during the Government of Vicente Fox (2000-2006). The former official’s ties to organized crime became especially close when he was Secretary of Public Security in the Felipe Calderón Administration (2006-2012), but they continued several years later, even after his arrest in 2019 in Texas, prosecutors argue. . On the other hand, the case that the Mexican authorities built is a civil suit in Florida. Civil cases do not end with jail terms, but usually require the defendant to pay money.
There is no precedent for the Mexican government to use a similar legal strategy to recover fortunes amassed by acts of corruption that ended up in other countries. “What we are going to try is to collect the money, that is up to us,” said the president this week, Andrés Manuel López Obrador, who has taken advantage of the criminal trial in New York to put Mexico’s claims on the agenda in the miami court. The president has made it clear that the process against García Luna is one of his top priorities and that it will be a recurring theme in his daily press conferences. The president had already complained on several occasions that the US usually keeps the wealth that politicians and drug traffickers manage to build through criminal acts or corruption committed in Mexico. “It’s a judicial drama,” he commented on the criminal trial.
The FIU’s battle has not been easy. Also in Mexico it was the subject of controversy and friendly fire within the federal government itself. The initial lawsuit was filed before the Court of the 11th Judicial District of Florida on September 21, 2021, weeks before Santiago Nieto left the direction of the FIU. The Treasury’s anti-money laundering arm hired a US law firm to act as its representative in the litigation: the firm Krupnick Campbell Malone Slama Buser Hancock, PA, known as KCM. In exchange for their legal services, the Mexican government agreed to pay the intermediaries 30% of what they were able to recover in court from García Luna’s corrupt fortune, which the lawsuit estimated at $250 million. If the lawsuit is unsuccessful, the US litigants will walk away empty-handed.
The hiring of a private intermediary to represent the FIU raised the suspicions of the Attorney General’s Office, headed by Alejandro Gertz Manero, who maintained a political struggle against Nieto when he was part of the federal government. The FGR initiated an investigation folder and accused the Treasury official of illegal use of powers for having hired the law firm to represent the country. Nieto defended himself at the time with the argument that Mexico does not have legal representation to lead similar processes in the US, and pointed out that the contract was comparable to the one signed by the Ministry of Foreign Affairs to have legal representation in the lawsuit. of Mexico against arms companies. Nieto lamented that the FGR’s questioning of the contract with KCM gave arguments to the US courts to ignore the legitimacy of the litigation and jeopardized the recovery of public money stolen by García Luna.
The demand seemed to falter when Nieto left the FIU and was replaced by Pablo Gómez, a left-wing politician and economist trusted by López Obrador. But Gómez ratified the lawsuit initiated by Nieto in the Florida court and on October 31, 2022 he filed an extension of the lawsuit in which he raised the illicit fortune of García Luna to 745.4 million dollars, from which he seeks to recover when less than 600 million dollars. The FIU has been emphatic in affirming that the former official built his wealth with money “stolen” from Mexico through acts of corruption.
The lawsuit lists 30 contracts delivered by public institutions to companies owned by García Luna or his front men between 2009 and 2018. The money diverted from the treasury was transferred to accounts in Barbados, Israel or the US and then invested in companies and assets in Florida. “Under the direction of García Luna, funds illegally taken from the Government of Mexico were used to build a money laundering empire that includes at least 30 companies, at least 30 real estate, multiple cars and yachts, numerous bank investments and located assets. in Florida,” the lawsuit states.
The Mexican government attributes to García Luna a complex network that includes shell companies in tax havens such as Panama or the State of Delaware. It is assured that the former secretary also used trusts to manage the assets, one of the most opaque financial structures and far from the arm of the authorities. The scheme uses companies to acquire property, but also calls on other companies to mortgage the assets, allowing the beneficiaries to have constant flows of money that allow them to have a lifestyle full of luxuries, the lawsuit claims.
The UIF also accuses Linda Cristina Pereyra, García Luna’s wife, of being one of the biggest beneficiaries of the “money laundering empire” headed by her husband, as well as six other accomplices who acted as front men and helped the couple settled in Miami during the government of Enrique Peña Nieto (2012-2018). In exchange, the former official opened consulting companies that helped them win multiple government contracts and divide the profits among the partners, according to the acts claimed by the Mexican government.
In the last two weeks, Pereyra has been present at almost all the hearings that have taken place in the trial in New York. Sitting on a bench in the Brooklyn court reserved for the defendant’s family, García Luna’s wife has greeted and kissed her husband from a distance, and has avoided having contact with the almost 20 reporters who enter the room each time. session to cover the trial, have them sit behind you. The rules prohibit journalists from accosting other attendees to interview them inside the court. Pereyra usually goes in and out escorted by the team of lawyers that defends her husband and she has not made any statements to the press after leaving the premises.
The possibility that the paths of the criminal trial of the United States and the civil lawsuit of Mexico would cross was latent until a few days ago. The judicial process against García Luna has caused a political storm in Mexico given the fact that the accusations could affect at least three former presidents: Fox, Calderón and Peña Nieto. Prosecutors, in fact, were emphatic at the time in pointing out the defendant’s luxurious lifestyle after moving to Florida and established in writing that he lived in mansions and sailed on yachts, provided by his partners.
Judge Brian Cogan, however, closed the door on talking about García Luna’s fortune after leaving the Calderón government. “This court is not going to allow the jury to speculate on the fact that the defendant’s lifestyle upon leaving office was financed with cartel money, when there is no evidence that that is the case,” he said in an order issued. on January 19 about the testimonies that were going to be admitted in court and the questions that both parties were going to be allowed to ask.
In a setback for the Prosecutor’s Office, Cogan did not see that the authorities could demonstrate that there was a link between the drug trafficking case and the alleged corruption that he committed during the Peña Nieto government. The judge said prosecutors can later present evidence about the former official’s work as a consultant, but noted that unless he can make a case that he was “offering consulting services for cartel members, this evidence is clearly irrelevant.”
The United States pursues the shadow of complicity between the drug trafficker and the authorities. Mexico is on the trail of a multimillion-dollar system of government corruption. At that crossroads, difficult to dissociate in the media trial, the spotlight is on García Luna, who maintains his innocence in the midst of a political hurricane and two fronts of an unprecedented legal battle against a former Mexican official. Pending the progress of the lawsuit in Florida, the trial in New York resumes next Monday with the next round of statements from a list that includes at least 70 witnesses ready to testify against him.
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