On July 2, 2021, Luis Alvarez Villamar, a citizen of Ecuador and former operations manager at a private securities clearing house (Ecuadorian Entity), pleaded guilty in the US District Court for the Southern District of Florida to one count of conspiring to laundering bribes from Ecuadorian investment advisor Jorge Cherrez Miño in exchange for certain business advantages.
According to the factual proffer, Ecuadorian Entity acted as a clearinghouse and custodian for the Instituto de Seguridad Social de la Policía Nacional (ISSPOL), an Ecuadorian government entity responsible for managing the “financial contributions by Ecuadorian police officers toward their social security.” Between 2014 and 2019, Cherrez paid Alvarez over $3 million and provided an apartment in Miami, Florida in exchange for Cherrez’s companies acting as custodian over ISSPOL investments. Alvarez further allowed a Cherrez company to act as the investment advisor for the ISSPOL assets, thereby creating a conflict of interest as Cherrez companies were both the custodian and the investment advisor. Moreover, this arrangement meant Cherrez could invest the securities “without proper oversight by Ecuadorian Entity.”
Cherrez was charged by criminal complaint in February 2021 with one count of conspiracy to commit money laundering in connection with the above-described scheme. According to the complaint, Cherrez paid more than $2.6 million in bribes to ISSPOL officials, including ISSPOL’s Risk Director John Luzuriaga Aguinaga, who was also charged in February 2021 by criminal complaint with conspiring to launder money. The Department of Justice alleges that Cherrez received about $65 million in profits from the scheme.
Alvarez is scheduled to be sentenced on September 29, 2021. Lurzuriaga, who was arrested in February 2021, is scheduled for a preliminary hearing and possible arraignment on September 2, 2021 (the DOJ has moved three times to continue the preliminary examination, most recently in June 2021). An arrest warrant for Cherrez has been issued; he remains at large, most likely in Mexico, according to the DOJ.