Financial news

El Salvador microfinancing sting results in arrests of over 100 Colombians – JURIST

The Attorney General of El Salvador announced the culmination of an illegal microfinancing sting that resulted in the arrests of over a hundred Colombian nationals at a press conference Monday. The arrests come at a time when El Salvador’s government is under international scrutiny for its ongoing mass detention of suspected gang members.An international criminal group made microloans to individuals and small businesses in El Salvador using illegally obtained funds. They then charged interest rates as high as 20%. Those who failed to pay were intimidated into turning over their bank accounts, which the criminals then used to further their drug-running and money-laundering activities. Most of those arrested were Colombian nationals, but a few Salvadorans, Guatemalans, and an Argentinian were arrested as well.The arrests are the latest move by President Nayib Bukele to transform El Salvador from a country terrorized by gangs to one ruled by law and order. Using emergency powers that limit some constitutional rights, the 41-year-old Bukele arrested over 70,000 suspected gang members since taking office in 2019.Bukele’s administration also constructed the Center for the Confinement of Terrorism, a mega-prison about 50 miles outside of San Salvador that will soon hold up to 40,000 of these suspects. Inside what is now the largest prison in the Americas, suspects are processed, shaved, and deliberately mixed among members of rival gangs. The crusade is popular among Salvadorans due to the sharp decrease in the murder rate. Other Latin American countries embattled by drug violence are considering it as a blueprint for their own “war[s] against crime.”Yet rights groups say that the crusade is marred by abuses and endangers democratic checks and balances in the country. The Legislative Assembly extended Bukele’s emergency powers at least nine times. The legislature passed laws that allowed security forces to arrest suspects as young as 12. Many arrests are reportedly based on appearance or social class. The new laws also “expanded the use of pretrial detention,” according to Human Rights Watch. These issues could raise the risk that some of the suspects jailed by the Bukele administration are innocent. This would violate several provisions of the El Salvador constitution. In particular, the number of arrests could potentially risk violating Article 12, which enshrines the presumption of innocence and the guarantee of a defense attorney to every suspect.Bukele stands by his methods despite the critics. “Almost every government in the world is 10x to 1000x stronger than all of its criminals combined,” he said on his Twitter account. “The reason they don’t end crime is because they are colluded with it, or because they benefit from it.”