Montesinos Affair Moves To Cayman Islands As Court Freezes US$33m In Suspect Money

Lisa Ugur, Tax-news.com, London

19 March 2001

Investigations into the unsavory funds stashed away by Peru's former intelligence head, Vladimiro Montesinos, have now reached the Cayman Islands, echoing the chase given to the misappropriated millions of the late Nigerian dictator Sani Abacha, which seems to have left few offshore centres untouched. The news last week was that the Cayman Island's Grand Court has frozen more than US$33m in accounts held by Montesinos and other prominent Peruvians in the jurisdiction.

The Montesinos affair drew publicity in January when the Swiss Banking Commission announced it was to conduct an enquiry into the conduct of five major banks with links to Montesinos. Switzerland’s biggest bank, UBS, is thought to be at the hub of the Swiss investigation, having handled US$40m in suspect funds. The Swiss justice authorities froze a total of US$70m in 17 accounts held at the banks, and now the Cayman Islands is following suit.

A statement issued by the Caymans government last week said that at the request of the Peruvian authorities, it had obtained injunctions in the Grand Court, "freezing accounts and other funds at the Wiese Bank International" in the names of Montesinos and other Peruvians, identified as former defence minister Victor Malca, army chief Juan Silvio Valencia Rosas, Mrs Montesinos and a Mr Venegas. The injunctions freezing the funds are to run indefinitely until the Court issues a further order.

Montesinos and the others are alleged to have been involved in extensive fraud, bribery and corruption, the proceeds of which found their way into the Wiese Bank International in the Cayman Islands. The Peruvian government is to launch proceedings in the Cayman Islands to recover the dubious funds.

Recommended