Fraudulent Activities in Nicaragua’s Finance Sector Raise Red Flags for US Institutions

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The Financial Crimes Enforcement Network (FinCEN) has issued an alert to American financial institutions, warning them of the increasing risk that corrupt assets from Nicaragua may flow through the US financial system. This advisory comes as tensions escalate between the Ortega regime and protesters in Nicaragua.

Senior Foreign Political Figures’ Assets at Risk

According to FinCEN, senior foreign political figures connected to President Daniel Ortega’s government may be moving assets out of their accounts in Nicaragua or elsewhere, possibly using the proceeds of corruption. These funds could potentially enter or traverse the US financial system, which would require immediate reporting by financial institutions.

Broader Effort to Hold Corrupt Officials Accountable

The advisory is part of a broader effort to hold individuals responsible for human rights abuses and corruption in Nicaragua accountable. FinCEN Director Kenneth A. Blanco emphasized that the regime’s oppressive and corrupt conduct has led to unrest in Nicaragua, prompting associated individuals and companies to try to move corruption-related assets out of the country.

Urging Vigilance by Financial Institutions

FinCEN is urging financial institutions to be vigilant and file Suspicious Activity Reports (SARs) when identifying potential misuse of Nicaraguan public funds or proceeds of political corruption linked to senior foreign political figures connected to the Ortega regime. The advisory also reminds financial institutions of their obligations regarding SAR filing related to facilitators of corrupt senior foreign political officials.

Previous Designations and Advisories

The move comes as Treasury’s Office of Foreign Assets Control (OFAC) has already designated four senior officials under the Global Magnitsky authority, citing their involvement in human rights abuses, corruption, and illicit activities. FinCEN has previously published an advisory on human rights abuses enabled by corrupt senior foreign political figures and their financial facilitators.

Preventing Exploitation by Corrupt Regime Insiders

The advisory does not affect normal financial relationships between the US and Nicaragua, but rather aims to prevent exploitation by corrupt regime insiders. FinCEN requests that financial institutions reference this advisory by including the key term “Nicaragua FIN-2018-A005” in SAR fields to indicate a connection between suspicious activity and the persons and activities highlighted in the advisory.

Ortega Regime’s Alleged Misconduct

The Ortega regime has been accused of holding fraudulent elections, suppressing civil society, and stealing money from government funds. The international financial community is being urged to be on high alert to prevent corrupt assets from flowing through the system.