Wednesday 22 September 2021

Guatemala Business Tycoon Busted for Tax Fraud

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FORBES Central America cover May 2016
FORBES Central America cover May 2016

One of Guatemala’s most important business figures has been arrested for tax evasion, as the corruption scandals that have rocked the country’s political elite appear to be expanding to encompass prominent members of the private sector.

Carlos Enrique Monteros Castillo, owner and president of the Camino Real hotel chain, was apprehended July 9 at Guatemala City’s international airport in connection with “tax fraud and special tax fraud” related to his company, the Attorney General’s office reported. Camino Real S.A.’s administrative manager, José Humberto Jiménez Contreras, was arrested at his home in Guatemala City.

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On July 13, a judge ordered Jiménez Contreras into house arrest and gave the prosecutors office one month to make its case against him.

Camino Real owner and legal representative Monteros Castillo was detained upon returning from the United States and taken to a courthouse holding cell where he stayed briefly before moving to a private hospital for medical reasons, Prensa Libre reported.

The charges stem from an investigation begun in 2012 after the Superintendent for Tax Administration (SAT) informed prosecutors that audits had uncovered irregularities at the firm, the Attorney General’s Office said in a statement. Authorities allege that the hotel executives used an intermediary named Norman Tejeda, who administered some 70 shell companies and “sold receipts for a percentage to simulate purchases and evade taxes.”

Monteros Castillo was arrested late Saturday and by Tuesday the government had been paid the equivalent of approximately $5.9 million in back taxes, interest and penalties, Prensa Libre reported. The latest statement on the case from the Attorney General’s Office did not specify whether or not the hotel owner was still under arrest.

This high-profile tax evasion case follows a series of corruption scandals involving the country’s top political leaders. Corruption charges brought by the Attorney General’s Office and the International Commission Against Impunity in Guatemala (Comisión Internacional Contra la Impunidad en Guatemala – CICIG) led to the resignation and jailing of President Otto Pérez Molina and his vice president, Roxana Baldetti.

Pérez Molina and Baldetti have been charged with running a huge customs fraud scheme, collecting bribes from a Spanish port management firm, and receiving vacation homes and other extravagant gifts from members of their cabinet, some of which were purchased with purloined public funds.

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Digging into the administration’s dealings prosecutors uncovered that they came to power under the banner of the Patriot Party (Partido Patriota – PP) via massive campaign finance fraud that spawned a the case dubbed Cooptación del Estado.

“It was easy for the criminal structure of the PP to get into power thanks to the financing of all manner of businessmen,” according to CICIG.

Among the accused was prominent banker Flavio Montenegro Castillo, who promptly resigned as general manager of Banco G&T Continental. The bank describes itself as Guatemala’s second biggest financial group. The president of Banrural, Fernando Peña, was also charged in that case.

Not long after announcing the cooptation case Attorney General Thelma Aldana complained of receiving threats. She has been outside of Guatemala for the past three weeks.

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That authorities are targeting big fish in the private sector as well as the government signals a willingness to root out deeply entrenched corruption even among the rich and powerful. Aldana’s absence may be an indication that that battle is far from won.

Source Insightcrime.org

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Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

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