Saturday, May 31, 2008

First arrest made involving fraudulent Ex-Im Bank loans; Did money lent to boost trade wind up in hands of drug cartels?

Somehow I'd missed that the first arrest has been made in Texas regarding fraudulent Ex-Im Bank loans. Byron Harris at WFAA TV in Dallas in December reported that the federal agency gave loans to figures associated with Mexican drug cartels that were never repaid, but until now no arrests had been made. Here's a report from The Financial:
On May 1, 2008, the United States Attorney for the Western District of Texas (USAO) announced the arrest of Andrew M. Parker, owner of San Antonio Trade Group, Inc., on conspiracy, wire fraud, money laundering, false statements and tax charges.

The Bank said an indictment returned this week by a federal grand jury sitting in San Antonio, Tex. alleges that from February 2003 to November 2006, Parker schemed to defraud the Export-Import Bank of the United States (Ex-Im Bank) by stealing millions of dollars in loan proceeds obtained by Mexican business owners from private U.S. lenders and causing multi-million dollar losses to Ex-Im Bank, which guaranteed or insured those loans based on false applications and supporting documentation submitted by Parker. The indictment also charges Parker with defrauding lenders in transactions not insured or guaranteed by Ex-Im Bank.

The information which started the investigation was provided by Ex-Im Bank. Ex-Im Bank will continue to work closely with law enforcement authorities to combat attempts to steal from the taxpayer.
See also the press release from the US Attorney on the arrest (pdf). It's impossible to tell from available information whether this is one of the individuals identified by WFAA, but I'm glad to see the US Attorney investigating fraudulent loans by Ex-Im Bank. It's clear they're not willing to effectively police themselves.

I've long contended on Grits that money spent cleaning up corruption, whether among police or in the financial sector, generates much greater marginal return (i.e., a "bigger bang for the buck") in the short term than just spending money on guns and overtime. If Byron Harris' report was accurate, there's still more to do. WFAA alleged multiple loan recipients with connections to multiple, competing cartels received loans totaling $243 million, so one hopes this arrest marks the first volley by the US Attorney, not the last.

RELATED: From the SA Express News:
See also prior, related Grits posts:


Anonymous said...

The on-going saga of Andrew Maxwell Parker has been much discussed in S.A.

The guy appeared back in town a few years ago with enormous amounts of money and no credible source for it other than odd rumors of business success in Latin America. It is widely thought that he did not inherit much if anything from his locally prominent family.

He bought an Olmos Park mansion, replacing all the windows with tinted glass windows, reputedly bullet-proof, and regularly parked his Bentley, Hummer and Ferrari in the drive way for all to see. Nothing low-key about the guy.

The Express-News posted a few weeks ago a very interesting affidavit from the forfeiture case filed by the Feds for his Olmos Park house; alas the pdf file no longer seems to be accessible. I seem to recall the affidavit saying nothing about ties to the cartels, but it did allege lots of scary and shady behavior; according to the affidavit at least one business partner of his in Mexico was found murdered at a time when that person could have been helpful to the invetigation by the Feds.

It's been quite the local scandal with Federal SWAT teams raiding Parker's mansions in Olmos Park and Monte Vista. The Express had at least four or five stories on the case in early May.

Gritsforbreakfast said...

Thank you anon, I added some links. I wonder if Guillermo Contreras who covered it for the Express News knows about the WFAA story. Unfortunately, the latter was not picked up by any other media I know of, but it's a pretty big deal and the cases seem possibly related.

Anonymous said...

does anyone know whatever happened to his partner Mexican national Victor Garate? Victor was a "Hero" in his home town San Luis Potosi, among his friends and family, they bragged about his bunddle of cash and even showed off his Ferrari and flashed all sorts of goods, DUCTOR was the name of his company and he was "all over the board" financing loans, selling equipment, school buses and all sorts of different items, very odd...I feel sorry for the guy!

Anonymous said...

although I feel sorrier for those who lost money and fell to his scam...very odd guy! Victor was a guy who was always a maverick but tricky sort of