Financial Crime World

Dominican Republic’s Drug Trafficking Ring Dismantled, Revealing Lucrative Money Laundering Operation

A major drug trafficking ring in the Dominican Republic has been dismantled, exposing the Caribbean nation as not only a cocaine transshipment point but also a money laundering hub.

The Syndicate and its Operations

The syndicate, formerly run by jailed crime boss César Emilio Peralta, alias “El Abusador”, laundered over $260 million in drug proceeds during the past three years. Luis Eduardo Velásquez Cordero, alias “El Pequeño”, was charged with running the laundering operation using shell companies before being arrested at the end of July.

How it Worked

  • The network relied on corrupt police and government officials, as well as contacts with Mexican organized crime groups, to traffic cocaine into the United States and Europe.
  • Authorities captured Peralta in December 2019 in the Colombian port city of Cartagena after he fled the Dominican Republic.

Seized Assets and Properties

Following the arrests, local officials raided a number of properties belonging to Velásquez Cordero and seized over a dozen luxury vehicles, including a Ferrari. The vast sums of money laundered by Peralta’s operation indicate that the Dominican Republic is hospitable to international drug shipments and illicit financial flows.

Tourism Industry Connection

  • The Dominican Republic’s tourism sector, which features nightclubs like the ones Peralta used to launder his drug proceeds, takes in huge profits. In 2019 alone, the industry recorded more than $7 billion in revenue.
  • The network also coordinated bulk cash deliveries from the United States to then launder in the Dominican Republic.

Anti-Money Laundering Efforts

The Basel Institute on Governance’s 2020 Anti-Money Laundering Index identified the Dominican Republic as having moderate risk for money laundering. However, the US State Department’s 2020 International Narcotics Control Strategy Report (INCSR) report went even further, saying that “corruption within the government and the private sector, the presence of international illicit trafficking cartels, a large informal economy, and weak financial controls make the Dominican Republic vulnerable to money laundering threats.”

Regional Concerns

The Caribbean has long served the interests of money launderers. Based on recommendations from the Financial Action Task Force earlier this year, the European Union (EU) singled out a number of countries in the region, including the Bahamas, Barbados, and Jamaica, as having “strategic deficiencies” when it comes to combating money laundering.

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