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Writer's pictureJerry Ipsen, CFE, MBA

Money Laundering and Agribusiness

In the book “International Money Laundering Through Real Estate and Agribusiness,” Fausto Martin De Sanctis, author, and former Judge writes the manipulation of the appraisal or valuation of cattle is one method of money laundering in the agribusiness sector.  This is because property most often cattle can be over or undervalued leaving the true value difficult to estimate.  The lack of government oversight and supervision makes money laundering in this sector a viable option for criminals and most often occurs through repetitive sales and purchases which are nearly impossible to track.


According to a report by AMLRightsource, the sale of cattle in Central America is one of the only industries within agribusiness that currently does not require itemized receipts. This means buying land or cattle as a ‘legal’ rancher is most often transacted using funds that are virtually untraceable and can be converted into private assets.


In effect: A complete lack in the tracking of the supply chain from ranchers to buyers is a major problem and it is extremely difficult to separate meat sold by legal farmers or criminals.


In some parts of Central America, the term “narco-ganadero” is used to describe ranchers who mask the raising and selling of cattle as a legitimate source of income to provide cover for their illicit drug trafficking activity.


In Guatemala, organized crime is behind many of the operations. Launderers usually live in other parts of the country utilizing a ‘caretaker’ or narco-rancher to tend the business. Cattle ranching acts as a front mainly for the manufacturing of narcotics, usually cocaine. When dry brush and trees are leveled through unlawful burning, the airstrips that appear within these cuts are often used for receiving or distribution of the drug.


When illegal actions such as those described above are utilized by “Narco-Ranchers,” the process of raising herds of cattle and bringing them to slaughter makes the sale of the meat illegal.  A byproduct of the ongoing cover-up by the Narco-Ranchers, is that human rights abuses often occur.  This happens when indigenous and local farmers are forcibly removed from their property, most often at gunpoint or by threat of death to them or their families.


Jerry of Ipsen Due Diligence is available to travel and investigate matters of financial fraud including suspicions of embezzlement and money laundering.

 



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