Financial Crime World

Financial Crimes Plague Honduras as Gangs Wield Power Over Communities

A catastrophic situation is unfolding in Honduras, where entire neighborhoods are under the control of powerful gangs such as Barrio 18, which mark their territory with graffiti and intimidate locals into submission. The Norwegian Refugee Council (NRC) has warned that people living in the Central American country are facing “war-like levels of violence,” with thousands forced to flee their homes due to gang activity.

Violence and Gang Activity

According to NRC head Jan Egeland, who recently visited Honduras, the number of killings in the country is on par with those in armed conflicts, turning thousands into refugees. Women and children are particularly vulnerable to violence, with an average of one woman murdered every 28 hours and many kids too afraid to attend school for fear of gang recruitment.

Harrowing Stories

Egeland recounted a harrowing story about a family whose 13-year-old son was approached by a gang after the father forbade him from joining. The family was given 24 hours to leave their home, and they eventually went into hiding with the NRC. Many pupils, Egeland explained, cannot afford to attend classes because their families rely on them to earn money for food.

The Situation Exacerbated by Natural Disasters

The situation in Honduras has been exacerbated by two almost back-to-back hurricanes that hit the country in November 2020, leaving 3.2 million people in need of aid. The NRC is providing shelters and funding for schools, but Egeland emphasized that the Honduran government needs “financial and diplomatic support from the outside world” to implement its law supporting internally displaced people effectively.

Examples of Financial Crimes

Extortion by Gangs

  • Barrio 18 and other gangs are known to extort money from local businesses and individuals in exchange for “protection.”
  • The extortion can be in various forms, including:
    • Direct payment demands
    • Threats of violence or harm if payments are not made
    • Manipulation of business operations to increase costs

Embezzlement

Corrupt government officials and business leaders have been accused of embezzling funds meant for disaster relief and community development projects. Embezzlement can take many forms, including:

  • Misappropriation of funds for personal gain
  • Concealment of financial transactions to avoid detection
  • Manipulation of accounting records to justify embezzled funds

Money Laundering

Gangs and corrupt officials are suspected of laundering money through various channels, including real estate and shell companies. Money laundering involves:

  • Concealing the origin of illicit funds
  • Moving money through multiple transactions to disguise its source
  • Using legitimate businesses or assets to hide the true nature of the funds

Financial Manipulation

Some individuals and organizations have been accused of manipulating financial transactions to conceal the true nature of their activities or to evade taxes. Financial manipulation can involve:

  • Concealment of assets or income
  • Misrepresentation of financial information
  • Use of complex financial instruments to hide illicit activities

The Need for Action

The Honduran government has implemented measures to combat financial crimes, but more needs to be done to address the root causes of corruption and gang activity. The international community must also provide support to help Honduras rebuild and recover from its current crisis.