Concerts In The Crosshairs Of Criminals

By Dialogo
July 01, 2012




Argentine singer-songwriter Facundo Cabral closed his last concert in
Guatemala on July 9, 2011, with the song that made him famous, “No soy de aquí, ni
soy de allá” (I am neither from here nor from there). A few hours later, the
musician, who in 1996 was designated a UNESCO Messenger of Peace, would die riddled
with bullets in an attack authorities have linked to his agent’s involvement in
organized crime.
The tragic event made the Central American Network of Think Tanks and
Advocacy known as laRED focus its attention on the exploitation of concerts for
money laundering as well as the use of nightclubs for prostitution and human
trafficking.
The mechanism by which concerts are used to launder money seems simple
enough, said Eduardo Stein Barillas, laRED coordinator, during an interview with
Diálogo. He explained that only a certain number of tickets are sold, but tax
returns later make it appear the event was sold out. Since it is difficult for
governments to verify audience attendance against concert earnings, some concert
promoters in Central America are using the events to launder money.
Stein, who was vice president of Guatemala from 2004 to 2008, sounded the
alarm in 2011 at an international forum, when he called attention to this type of
criminal activity. Moreover, in most cases the concerts are promoted all over
Central America through business partnerships. The amount of money being laundered
during a given concert or event can be small — but it adds up, according to the
coordinator.

In Guatemala, the concert industry brings in between $19 million and $25
million a year, according to El Periódico, a Guatemalan publication. The most
attractive country for concert organizers is Panama, where tickets sell for $25 to
$350 each, according to press reports. Stein said more artists perform in Panama and
tickets sell for higher prices than in the other Central American countries. He
attributes that to higher disposable incomes, especially with the migration of
people from Venezuela and Colombia.

Illegal Business

LaRED reached its conclusion about the relationship between money laundering
and concert organizers after publishing the study “Security and Transnational
Organized Crime in Central America” in 2011. The study concluded that money
laundering, in general, is a difficult problem to tackle.
LaRED uses its studies to promote integration and development in the region.
The organization was founded in 2009 and counts on the sponsorship of the
Konrad-Adenauer-Stiftung foundation. The Association of Research and Social Studies,
a think tank with multidisciplinary experts in Guatemala, is in charge of
coordinating the activities of laRED.
Stein said that after learning that bank presidents and tax collectors
reported that about $29 billion may have been laundered in Central America in 2010,
his organization started looking for connections with the banking systems of each
country. The amount, he said, was larger than the combined national budgets of the
region. “It is a significant amount,” said the academic.
The think tank also discovered that, at least in Guatemala, there were signs
that contracts for international concerts could be used to launder money. In most
cases, the way to promote and contract the artistic presentations was almost always
at the regional level through business partnerships. In addition, laRED found that
some organizers of concerts from the region present “artists,” who turn out to be
dancers for night clubs and are often associated with prostitution and human
trafficking.

The Investigations Continue

When Cabral was killed, Guatemalan authorities said the real target was
Nicaraguan national Henry Fariñas, the artist’s agent. Fariñas was hurt in the
attack and is facing accusations of money laundering, drug trafficking and organized
crime in Nicaragua, according to Guatemalan newspaper Prensa Libre. The entrepreneur
implicated Costa Rican national Alejandro Jiménez González, also known as “El
Palidejo,” as the mastermind. Jiménez was captured in Colombia in March 2012 and is
facing criminal proceedings in Guatemala. Fariñas owned a luxury chain of nightclubs
in Costa Rica, Nicaragua and Panama, and was a show promoter. “Clearly, the
individual related to this network of international show contracts used renowned
artists,” Stein said.
He added that authorities from the region investigate money laundering
because it has a “terrible corruption power,” and tax evasion represents a net loss
of resources for governments. The U.S. Department of State, in its “International
Narcotics Control Strategy Report,” identified Costa Rica, Guatemala and Panama as
major money laundering countries in 2011. In Guatemala, a law regarding asset
forfeitures took effect in June 2011, allowing authorities to seize cash used in
money laundering without having to obtain a criminal conviction against the courier.
Panama is taking steps to strengthen its regulatory framework by drafting anti-money
laundering legislation, the report indicated.
“Cartels try to find ways to take advantage of any successful and legitimate
economic activity for money laundering,” Stein said. However, he clarified that not
all concert organization activities are dishonest; instead, laRED wants to highlight
that concert organizers handle significant amounts of cash, something that attracts
criminals.
Use of legitimate economic transactions by drug cartels to launder money has
become much more sophisticated, according to Stein. “The amount of money laundered
in the region that comes from illicit activities has an enormous power of
corruption, and we are currently suffering from it,” he said. Meanwhile, Guatemalan
authorities continue investigating Cabral’s murder.


In El Salvador, since the economy was dollarized there has been increasingly this type of concerts. It would be good that the RED do a study about this kind of shows because it is almost always that they are to "benefit of..." (any Foundation or cause) in order to avoid paying taxes... in addition to possible money laundering, discussed here.
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