Hi everyone, just yesterday found the OFAC had discovered newly created companies of Los Cuinis network. After doing a simple and quick research I found enough info to produce this little piece. It contains several conclussions which are entirely my opinion, not checked facts or certainties, just my thoughts.
Los Cuinis network has been again attacked by the US Treasury Department through the OFAC sanction list. Just yesterday the OFAC released some info about a recent blow to the CJNG finance network. Interestingly enough this economic sanctions coincide in time with operation Python, a major operation against CJNG personnel on US soil which has ended up with nearly 500 people captured.
There are four new entities designated by the OFAC as laundering fronts and a fifth asset being described as a legal restructure from a preceding company already entitled by the OFAC as a laundrymat.
The four new businesses are:
- Corporativo Sushi Provi. Sociedad de Responsabilidad limitada de Capital Variable
- GBJ de Colima Soicedad Anonima de Capital Variable
- International Investment Holding Sociedad Anonima de Capital Variable
- Master Reposterias y Restaurantes Sociedad Anonima de Capital Variable
The fifth Company designated was Cabañas la loma en renta: cabañas la Loma Tapalpa, which is only a new Brand, a new commercial name for a cabin renting businesses previously designated by the OFAC under the name of Las Flores Cabañas.
The two women being designated are two well known heavy hitters inside the Gonzalez Valencia clan: Diana Maria Sanchez Carlon (designated back in August 2015) and Jennifer Beaney Camacho Cazares (the wife of Abigael Gonzalez Valencia, also designated in August 2015)
Interestingly enough, Corporativo Sushi Provi and Master Reposterias y Restaurantes aren´t front businesses laundering cash but management firms directing/operating previously designed businesses. Corporativo Sushi Provi manages Kenzo Sushi, a previously designated Sushi Restaurant operating in two locations: Guadalajara and Zapopan. Master Reposterias y Retaurantes is the firm managing Bake and Kitchen, a restaurant based in Zapopan.
Both Kenzo Sushi and Bake and Kitchen had been identified and designated back in September 2017 by the OFAC. In this case on September 2017 Kenzo Sushi was identified as the legal successor of Mizu Sushi Lounge, another sushi restaurant based in Puerto Vallarta and designated as a laundering front in September 2015.
2017 designation chart of Kenzo Suchi and Bake and Kitchen
One of the businesses designated, Cabañas la loma en renta: cabañas la Loma Tapalpa, was designated back in September 2015 under the name of Las Flores Cabañas. As we´ll see the practice of renaming corporate vehicles under a second name to disguise the true identity and avoid identification has become a central piece on Los Cuinis corporate practices.
2015 designation chart including Las Flores Cabañas cabin rental business
There seems to be a pattern in the way Los Cunis manage their assets once they have been identified and designated by the OFAC. In order to fully understand how they manage to retain the possession of these assets and continue operating them as laundering fronts we must take into account what an OFAC designation means: once a businesses or person is designated by the Treasury Department its name is immediately taken into the OFAC list and apparently that means that US citizens/institutions are prohibited from making business with them or managing their assets. In fact, the OFAC list is used by institutions outside the US in order to be sure that a business partner isn´t related to any kind of criminal activity. The banking sector is one of the interested parties on the OFAC list and a lot of banks use a initial filter for transactions which is endorsed by OFAC list data. The thing is that in Mexico the fact of appearing in the OFAC list isn´t an obstacle to continue with your business. Los Cuinis have developed the following strategy: once an asset is tackled by the Treasury Dep. they immediately try to change its name in order to pretend that the business has changed hands and is ultimately owned by different and innocent people.
The first time this was done (at least as far as I am concerned) was in 2017. On April 2017 the OFAC designated to entities: Yorv Inmbiliaria and Grupo Segtac SA de CV. Each of these entities controlled previously designated assets (in this case two shopping centers in Zapopan and Playa del Carmen) Yorv Inmbiliaria acted as property manager of Plaza los Tules while Grupo Segtac acted as property manager of Xaman Ha Center. Plaza los Tules and Xaman Ha Center had been linked several years before to the Gonzalez Valencia clan as laundering fronts. Once they were under the radar of the authorities they quickly became controlled by Grupo Segtac and Yorv Inmobiliaria in order to avoid new detections.
This practice is quite common in the money laundering sector: once a certain business is designated as an illegal actor a second entity apparently innocent appears from nowhere and acquires the black asset trying to demonstrate that the new owner won´t tolerate the past practices. Of course, the new owner is a strawman of the previous one which uses a secondary and clean company in order to re-purchase the asset, disguise its property and allow the laundering to happen. One bonus hint: where was the first Bake and Kitchen shop located? Right inside Plaza los Tules shopping center in Zapopan. As we can see there a thick net of assets quite correlated; a restaurant/bakery owned by Los Cuinis integrated in a shopping center also owned by Los Cuinis clan.
2017 designation chart including the Management firms created to disguise Los Cuinis shopping centers network
Yesterday´s designations confirmed this practice. Nevertheless, why do they create these kind of companies? Just to operate with anonymity their old laundering fronts? The answer is much more interesting: Los Cuinis create these management firms for accessing the financial system.
Imagine you have a sushi restaurant, let it be Kenzo Sushi. Each day you make a certain amount of cash by mixing real revenues with dirty cash you obtain form extortion/oil theft/drug trafficking, etc. You must sign a contract with a financial institution in order to open a corporate account on which you´ll deposit your daily revenues. Your corporate account is directly linked to your business and is identified as one of its assets (in the European accountancy method it would pose in the balance under the name Banks/Caja, for example) What happens if the restaurants is suddenly designated by the US as a laundering front? The most probable thing is that the financial institution at which you´re keeping your money will close them immediately and seize the available funds. You get stucked with your cash intensive business but without the option to recover you saved money or to continue introducing your dirty cash through your corporate account. The answer for Los Cuinis is pretty simple: they form a second company with an unknown name which is not going to be traced or linked to your restaurant. The restaurant will channel the dirty money through these new company which will ended up managing/directing the restaurant. Apparently it will be a clean company involved in whatever business (real estate, restaurant, night club, etc) but the revenues it will introduce into the financial system will come in fact from the Kenzo restaurant which is financially operating under the name of this new company. In the end the cash flow of each company is the same, it´s a matter of altering the books in order to attribute the property of the bank accounts to a different business which isn´t under the radar.
Nevertheless, the access to corporate accounts is so important for Los Cuinis also for a more important reason: transfer speed. Most money obtained by CJNG/Los Cuinis is cash. As a tangible asset cash can be seized, stolen, lost or damaged. But if the cash is channeled to the financial sector through a bank and kept in an account a single financial operator can divide it in quantities little enough not to activate any kind of alert and send them disguising its purpose and avoiding risks and costs to any place in the world. Los Cuinis might be so reluctant to get rid of their designated assets through the creation of such a proxy corporate structure because they don´t want to destroy a perfectly oiled machinery it took them a while to create.
Only time will tell what happens with Los Cuinis assets, but the fact is that after 3 years of indictment you can still go to Ottawa street number 1568 and enjoy a great dish of raw fish for a few pesos. Who knows, maybe by paying your meal you´ll be funding the national carnage.
Thanks for posting. I find this type of material interesting. Managing and hiding the money is as complex or more complex than smuggling the product.
Mindblown again. Very interesting read. I find it incredible how you were able to figure out how Los Cuinis uses secondary firms (posing as "clean" companies) to help launder money for entites that have been sanctioned by the OFAC. I guess investigators are always playing at a disadvantage because they have a huge burden of proof to meet and organized crime groups can react quickly to sanctions by bringing in new strawpeople or entities with clean backgrounds.
That being said, I read this article a few years ago that talks about the ineffectiveness of the Kingpin Act in Mexico. Essentially, the article says that U.S. courtrooms have a lower legal standard for what they consider "reasonable belief" for a crime, in this case money laundering. Oftentimes evidence that would stand in a U.S. courtroom is of little use for Mexican authorities, who have a higher burden of proof because Mexican courtrooms seem to be stricter on the evidence required to suspect someone is involved in money laundering. I hope that article helps your research.
FANTASTIC job with this post!
Mr. Pompeo's words about the Cuinis and CJNG.
Keeps Mencho's daughter behind bars
Great post. Interesting content.
Great material and unfortunately I am not surprised. Follow the money and no matter what it may appear to be the circles become smaller and smaller and the long term plans begin the surface. It is surprising to me the lengths at which they need to go to appear legit, or to launder, etc. It's not like the old days when you could simply run a peso/dollar exchange scam at the border to launder a few million, or a few weeks at Ceasars in LV...a lot of effort = way more money than I could imagine is flowing and this just from what has been exposed...!?!?
Thanks for the detail on the money trail, interesting...
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