US Treasury Warns of Potential Money Laundering by Nicaraguan Regime

Washington DC, October 4, 2018 - The Financial Crimes Enforcement Network (FinCEN), a department of the US Treasury, has issued an urgent warning to American financial institutions regarding a significant risk that corrupt funds from Nicaragua may be laundered through the US banking system.

Background

Nicaraguan President Daniel Ortega’s regime is facing mounting international pressure over its human rights abuses and corruption. FinCEN believes that senior officials connected to the Ortega regime may attempt to move their illicitly gained assets out of the country, potentially using the US financial system to do so.

Quotes from Key Officials

• “This is a wake-up call for the international community,” said Sigal Mandelker, Under Secretary of the Treasury for Terrorism and Financial Intelligence. “For years, Nicaragua’s President Daniel Ortega has engaged in fraudulent elections, suppressed civil society and independent media, and stolen money from government funds. It’s essential that we take action to prevent exploitation by corrupt regime insiders.”
• “The Ortega regime is notorious for its corruption and human rights abuses,” said FinCEN Director Kenneth A. Blanco. “Given the current unrest in Nicaragua, it’s likely that those associated with the regime will try to move their ill-gotten gains out of the country. It’s crucial that US financial institutions are vigilant and report any suspicious activity to FinCEN.”

What You Need to Know

• The warning is backed by recent sanctions imposed by the Treasury’s Office of Foreign Assets Control (OFAC) on four senior Nicaraguan officials accused of corruption and human rights abuse.
• FinCEN has asked financial institutions to be on high alert for transactions that may be linked to the Ortega regime, including those involving public funds or assets belonging to senior foreign political figures.

What Financial Institutions Need to Do

• File Suspicious Activity Reports (SARs) if they identify any potential misuse of Nicaraguan public funds or proceeds of corruption.
• Be vigilant and report any suspicious activity to FinCEN.

Important Note

“This advisory is not intended to affect normal financial relationships between the US and Nicaragua,” FinCEN emphasized. “Rather, it aims to prevent corrupt funds from being laundered through the US banking system and to hold accountable those who engage in human rights abuses and corruption.”