Panama Charges Ex-Nicaraguan Leader In Money Laundering Probe

by Leroy Baker, Tax-News.com, New York

22 May 2006

A Panamanian judge has ordered the arrest of former Nicaraguan President Arnoldo Aleman on charges of money laundering, citing evidence that he used Panamanian accounts to embezzle his own government's funds.

Aleman, who led Nicaragua from 1997 until 2002, and several of his associates, were accused by Panama's anti-corruption prosecutor, Mercedes de Leon, at a preliminary hearing last week of using some 60 Panamanian companies to conceal the transfer of more than US$58 million from the Nicaraguan Treasury into Panamanian bank accounts.

Judge Adolfo Mejia wrote on May 15 that were also "sufficient indications of links" between Aleman, his wife, Maria Fernanda Flores de Aleman, her father, Jose Antonio Flores, and former Nicaraguan internal revenue chief Byron Jerez.

However the judge found insufficient evidence to take seven other close associates of Aleman to trial on the same charges.

Aleman has already faced corruption charges in his own country and in December 2002 he was sentenced to a twenty-year prison term for a string of crimes including money laundering and embezzlement. The sentence was however reduced to house arrest thanks to the influence of Liberal Party loyalists in parliament, and he is now theoretically on probation while he appeals the corruption convictions.

However, the lack of an extradition treaty between Panama and Nicaragua may reduce the chances that Aleman will stand trial in a Panamanian court over the latest allegations.

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