The accusations that Uruguayan breeding companies have fraudd people over hundreds of millions of dollars underline how criminal organizations in white collar can cause generalized financial devastation without resorting to violence.
Uruguayan prosecutors are investigating at least three companies on the complaints they have misleading investors. Condexión Ganadera, República Ganadera and Grupo Larrarte would have offered investors the possibility of buying cattle that would be sold by growing up to their actual size, providing those who have invested fixed annual yields from around 7 to 11%.
However, prosecutors say that companies in fact paid their investors with the income obtained from other investors. In some cases, the cows that people thought they would ever buy existing, with fictitious cows recorded in the national register of Uruguay cattle.
The largest of the companies involved, Condexión Ganadera, which has been operating since 1999, is accused of making money at around 4,000 investors and was deemed a financial deficit of around $ 250 million. An accountant hired by Conexión Ganadera to give an independent assessment of his finances following the suicide of one of his co-founders told investors during a videoconference that, although the company was at the same time that it was announced, it had at some point been transformed into a fraudulent company.
“There was a serious problem with the files within the company,” he said. “A lack of balance sheets, a lack of audits.”
Although it is still not clear how much money is due to investors, Carlos Escond, director of the Dotta & Esponda law firm, told Insight that its 423 investors owed around $ 47 million, on average more than $ 110,000 per person.
In June, portfolio capital farming investors also denounced the company for having frauded them out of around 20 million dollars.
None of the persons related to investigation companies were found guilty. But the chief of Grupo Larrarte, Jairo Larrarte, received a 120 -day preliminary detention order in April, and a prosecutor must be current against three of the superiors of Conexión Ganadera on July 17.
Uruguay has tightened its financial regulation in recent years, introducing measures such as its central bank oversees cryptographic assets with the intention of protecting induced driving investors. But the companies involved would have benefited from the regulatory gaps, such as the possibility of avoiding an examination of the Central Bank thanks to the classification of agro-business companies. The Uruguay cattle register would also have trusted the data provided by companies rather than checking it independently.
Livestock investment companies would have frauds their customers is not unique to Uruguay, similar cases occurring elsewhere in South America, including in Colombia and Paraguay.
An analysis of insightful crime
While organized crime is often associated with violent criminal groups, the non -violent nature of white -collar offenses means that they can continue for large -scale years, inflicting serious financial damage while remaining under the radar of the authorities and the media.
Investors said they lost their entire part or a large part of their life economies at alleged livestock scams.
“The vast majority of them are not just speculative investments, but rather their savings. They were counting on this money to support their retirement,” Esconda told Insight Crime.
“The vast majority of them have no way or a way to generate this amount of money again because they are retirees. The situation is really very, very painful for many of them. ”
The return of this money can sometimes take many years, if it ever occurs. Thousands of people who have invested in real estate in Mexico through SitMA and Invergroup companies are still looking for a restitution 15 years after being fraud.
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The cattle industry has already started to see negative impacts. A meat packaging factory reduced its workforce from 400 to 80 years after livestock producers have ceased to send cattle when they lost confidence in the factory after reporting that he had a debt of $ 25 million with Conexión Ganadera in February.
The benefits could have wider economic ramifications for Uruguay. The Minister of Agriculture and Fisheries Alfredo Fratti and the President of the Montevideo Stock Exchange, Ángel Urraburu, both comments to the press on the impact that the last case of alleged cow fraud could have on the confidence of investors in Uruguayan companies.
“I think Uruguayan investors will again take money from Uruguay due to a lack of confidence,” said Esconda.
