Cuba Warns of Dirty Money Investments from Abroad

Fumero-display-300x206By Cafe Fuerte

Col. Idael Fumero Valdes, head of the Information and Analysis Department of the Ministry of Interior.
Col. Idael Fumero Valdes, head of the Information and Analysis Department of the Ministry of Interior.  Photo: elnuevoherald.com

HAVANA TIMES — The Cuban Interior Ministry (MININT) has under surveillance attempts by Cubans living abroad and foreign citizens who are introducing illicit funds in the country to invest in the private sector, in goods and property.

During a speech Tuesday at the National Defense Commission of the National Assembly of People’s Power (parliament), Colonel Idael Fumero Valdes, head of the Department of Information and Analysis of the Investigative Technical Police at the Interior Ministry, addressed the issue of illicit cash inflows as part of the illegalities facing the country from abroad. Fumero was part of the delegation of senior officers of the Interior Ministry who visited a US Naval Air Station in Key West, Florida, on April 21.

“Among the main illegalities which the country faces is the persistent interest of emigrants and foreigners to introduce illicit funds to invest in the private sector and in real estate, which is known as money laundering,” said Fumero in a report by Cubadebate.

The Interior Ministry official made an assessment of the implementation of measures aimed at increasing prevention and confronting demonstrations of social indiscipline, illegalities and crime in the country.

Investments in the peephole

Cuban immigrants, mostly from Miami, have invested in private businesses and homes acquired by residents of the island. Transactions in some cases have involved people who have acquired the money in the US by fraud and scams involving heath care, auto insurance and credit cards.

Likewise, Fumero said that throughout the national territory the MININT continues in a combined effort to stop attempts to introduce and produce drugs, which experienced an increase of crops in Matanzas, Mayabeque and Ciego de Avila provinces during 2015.

According to data from the Anti-Drug office of the Interior Ministry, last year it seized 905 kilograms of drugs, 72% of all narcotics confiscated in Cuba. 59 drug trafficking operations in the country were also frustrated, with 63 detainees, 30 of them foreigners of 10 nationalities.

A total 578 cases of domestic drug trafficking were reported, with 686 detainees and 81.92 kilograms seized.

Human smuggling networks

Fumero also mentioned that stimulated by the Cuban Adjustment Act, networks of traffickers operate for people wanting leave the country. He noted that these networks are directed and financed from abroad, and have rearranged their modus operandi with new routes in South America.

He further warned about the existence of a black market or underground which has become “a space for marketing a wide range of goods and services, products that often come from crime and theft”.

Fumero also drew attention to the proliferation of various forms of prohibited games such as car racing, illegal dog fights and cockfights.

During the meeting at the National Defense Commission, Comptroller Gladys Bejerano said the indiscipline and manifestations of corruption persist in the country, with significant damage to the Cuban economy and society.

“The crimes that occur in [State] businesses show that the actions taken to reduce them have yet to have the desired effect, because some management continues in an environment of chaos and impunity,” said Bejerano.

Big time embezzlement

Bejerano revealed that during 2015 more than 132 million pesos (6.6 million USD) were documented mainly in the theft of goods for illicit sale. The embezzlements occurred mostly in the Ministry of Agriculture (MINAG), Ministry of Internal Trade (MINCIN) and the Council of the Provincial Administration of Havana.

The most common stolen items are information technology, fuel, construction materials, parts and tires. Bejerano said the largest amount of theft was detected in Havana.

“The main cause of these manifestations is the lack of controls, a breeding ground for encouraging people to commit corruption,” insisted Bejerano, also one of six vice presidents of the Council of State.

Bejerano expressed concern over the “excessive delay” in reporting the facts of detected administrative corruption. Of those analyzed in 2015, 58 percent were reported on after six months, while 13 percent after a year elapsed.


16 thoughts on “Cuba Warns of Dirty Money Investments from Abroad

  • July 12, 2016 at 5:36 pm
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    Contact a local real estate agent in Havana.

    There are a couple of them on the market right now in Miramar. They occasionally pop up in Siboney and Playa Del Este as well. Just condos, not stand alone houses.

    These units were built in the 1990s for the most part, and were part of a very short lived policy of allowing condo purchases to bring in revenue during the special period. The units that were built are grandfathered in such a way that foreigners are still allowed to own them, and if they sell, they must sell only to another foreigner.

  • July 11, 2016 at 9:50 pm
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    Where and at what price?a

  • July 11, 2016 at 4:53 pm
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    Foreigners are not allowed to buy property in Cuba. There are the odd omissions permitted for people employed for example by the Embassies. You spoke above of condo units – which have been discussed on and off for several years, but without I believe fruition, although you may care to describe there location?
    Vancouver and New York ought not to be confused with Cuba.

  • July 11, 2016 at 11:32 am
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    “The main cause of these manifestations is the lack of controls, a breeding ground for encouraging people to commit corruption,”

    Of course, the senior officials of a police state will see the cause of all problems as a lack of control over the people. Naturally, the solution to all problems is to increase control over the people.

    And so it goes.

  • July 10, 2016 at 11:07 pm
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    The article is not about you assisting your family legitimately. It is about the proceeds of crime being used to buy real estate as a means of laundering it.

    This is a serious problem in many places. Vancouver and New York have a very big problem with anonymous buyers snapping up high-end real estate for far above market value, and then leaving that real estate unoccupied. In many cases it turns out that these units are being bought with the proceeds of crime, and just left to sit and accrue value over time. It’s a classic money laundering scheme.

  • July 10, 2016 at 2:01 pm
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    There definitely are exceptions. If a foreigner really wanted property in Cuba, there are a limited number of fully-legal specifically for foreigners condo units on the market at any given time.

  • July 10, 2016 at 11:24 am
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    Dani I maintained nothing of the sort you describe. As one who has assisted my Cuban family with the purchase and improvement of property I deprecate the endeavors of the regime to describe it as “money laundering”. But it is a much needed investment in real estate.
    Fumero Valdes is reflecting the views and concerns of Raul Castro – which I have quoted in these pages.
    The regime does not object to remittances as they perform an essential role in sustaining a tottering economy when used to purchase goods from the GAESA subsidiary shops. What they illogically object to is the uses of such money for investment in domestic property and casa-particulars which can subsequently be re-sold. The objective of so many Cubans is to acquire sufficient funds (the frequent target being $25,00) to enable them to leave the country – and selling property is a means to that end. The regime is very concerned about the increasing number of Cubans leaving and becoming the subject of international discussion when stranded in Equador, Nicaragua and other countries being used as stepping stones to get to the US. Hence the ongoing purge by Correa acting in cahoots with Raul Castro.
    For example, the man who used to sell air on our street, did exactly what I have described and I know of other cases. Remember, over 43,000 people fled Cuba last year.

  • July 10, 2016 at 6:22 am
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    “Money laundering is a means by which funds earned illicitly are hidden by investment or transfer” – exactly. What is being discussed here is fraud such as the Miami Medicare http://www.miamiherald.com/news/local/article74426907.html laundering money through Cuba. Some companies that provide services for the transfer of remittances were caught up in this (including one that I was using) and were subsequently shut down.

    On the whole foreigners aren’t allowed to own property in Cuba, though there are exceptions. But you seem to be maintaining that people outside Cuba can’t send money to their relatives to improve their homes or start up businesses. This is just ridiculous. $770 million or more is sent annually. There is no evidence that the government tries to stop this in any way.

  • July 9, 2016 at 4:33 am
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    the big economies of London and new york etc. all run on money that is laundered, so I guess that makes Cuba bad.

  • July 9, 2016 at 2:59 am
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    Carlyle must have missed these paragraphs:

    “Transactions in some cases have involved people who have acquired the money in the US by fraud and scams involving heath care, auto insurance and credit cards.”

    AND

    “Fumero also mentioned that stimulated by the Cuban Adjustment Act, networks of traffickers operate for people wanting leave the country. He noted that these networks are directed and financed from abroad, and have rearranged their modus operandi with new routes in South America.

    He further warned about the existence of a black market or underground which has become “a space for marketing a wide range of goods and services, products that often come from crime and theft”.

  • July 8, 2016 at 10:45 pm
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    Money laundering is a means by which funds earned illicitly are hidden by investment or transfer. Money which has been earned and tax paid in the country where it was earned is not laundered. There are many families in Cuba with relatives in other countries who have received assistance from those relatives – including the purchase of property which has to be owned by Cuban citizens. Foreigners are not allowed to purchase property.
    I read the whole article and following reading it a third time find no fault with my comment. Fumero Valdes has repeated many of the views expressed by Raul Castro on July 7, 2013 which properly summarized the consequences of at that time 54 years of Castro regime policies, he said:

    “Thus part of society has come to see theft from the state as normal. There has been propagation of illegal constructions with relative impunity moreover in inappropriate sites, non-authorized occupation of housing, illicit marketing of goods and services, non-fulfillment of working hours, illegal cattle rustling and slaughter, capture of marine species in danger of extinction and utilization of the art of fishing, felling of forestry resources including in Havana’s magnificent Botanical Gardens, the hoarding of products in short supply and bribes and their resale at higher prices, participation in games outside the law, price violations, the acceptance of bribes and privileges, preying on tourism and infractions of established regulations related to informatics security.”

    i cannot argue with Raul Castro’s own analysis as the equivalent of a State of the Nation address, but you may care to do so.
    It clearly reflects dictatorial paranoia and frustration at not being able to totally control everything.
    When Raul Castro allowed Cubans to buy and sell homes, he could have anticipated that foreign family relatives most of whom had fled from the Castro communist repression, would provide financial aid their families in Cuba and their doing so has obviously added to his frustration. MININT has possibly been criticized by him, as included in its responsibilities is reporting the thoughts and actions of the citizens. The only question remaining is whether Fumero Valdes speech was initiated by General Abelerado Coloma Ibarra as Minister trying to defend MININT’s failures or by Raul Castro himself.

  • July 8, 2016 at 8:20 pm
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    A large secondary market exists because the legal regulatory frame is not sufficient. Plenty of money is entering Cuba. If it can be channeled to legal enterprises it can be taxed. But trade off is that private enterprise needs to be accepted. A large shadow cash economy will only grow. Before the Soviet Union collapsed in 1991, 75% of it’s economy was black market. People find a way to live.

  • July 8, 2016 at 5:57 pm
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    Read the whole article Carlyle!

    It is CLEARLY about people laundering the proceeds of criminal enterprise.

  • July 8, 2016 at 1:35 pm
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    Re-read the first paragraph dani!

  • July 8, 2016 at 3:53 am
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    If you read the article properly you would see that it is people money laundering the proceeds of crime and fraud that is the issue. There is nothing stopping people assisting their relatives to improve their homes or start up businesses.

  • July 7, 2016 at 1:01 pm
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    Lovely example of double-think. Foreign investment in businesses controlled by GAESA is acceptable and ‘clean’. Money invested in private property owned by relatives is ‘illicit’.
    So if I wished to assist relatives in Cuba to own their own home, or to improve their home by for example providing a decent bathroom, that is ‘illicit’. But, when Sheraton come along with millions of dollars to invest in GAESA controlled property that is not only acceptable, but welcomed with open arms.
    Is this sanity?

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