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El Salvador arrests 110 Colombians in money laundering scheme that threatened borrowers

The operation, which started in 2021, would offer residents and small businesses loans with interest rates of 20 percent. However, if the victims defaulted they were threatened

Police in El Salvador
Police in El Salvador | EFE

July 19, 2023 8:49am

Updated: July 19, 2023 8:49am

More than 100 Colombians were arrested in El Salvador for taking part in an international money laundering operation in the country, Salvadoran officials announced on Monday. 

Around 110 of the members of the money laundering scheme were Colombian nationals who did not register as official lenders, authorities said. They added that an Argentine, a Guatemalan, and three Salvadorans were were also charged in connection to the scheme. 

According to an investigation by officials, the operation, which started in 2021, would offer residents and small businesses "micro-loans" with exorbitant interest rates of 20 percent, which was used to finance illegal drug and gang related activities.

However, if the victims defaulted they were threatened. Others who fell victim to the scheme had their identities stolen. 

“When victims cannot pay, debt collectors use threats and then pretend to want to help them, telling them that their debt will be canceled if they open bank accounts and give them their access codes,” the police said in a statement.

The scheme would transfer the money to the victims as a remittance or bank transaction, Attorney General Rodolfo Delgado said. 

The network generated more than $20 million from the scheme, which was sent back to drug trafficking gangs in Colombia, Delgado added.  

Salvadoran Justice Minister Gustavo Villatoro said that this type of loan scheme has become a popular way to generate money for Colombian cartels over the past two decades. He added that similar schemes operate in several Latin American countries. 

"Colombians are our brothers," Salvadoran President Nayib Bukele wrote in a Monday post on Twitter. "However, these people will have to face Salvadoran justice."

Colombia’s foreign ministry confirmed the arrests and said it was in talks with its embassy in the Central American country. However, no further comment was offered.

The detainees, including Colombian ex-military personnel and former police officers, entered El Salvador at different times "as tourists," authorities said.