Political protection behind the Koriun Inversiones fraud

The Koriun Inversiones case has sparked intense debate in Honduras after the revelation of a Ponzi scheme that affected more than 35,000 citizens. The public denunciation by Congressman Edgardo “Chele” Castro has placed at the center of the discussion the possible political and judicial protection that allowed the company to operate irregularly.

The involvement of the authorities, the confiscation of assets, and how investors have responded have exposed a lack of trust in the country’s banking system. The inquiry is still ongoing, as doubts emerge concerning the accountability of government personnel and the efficiency of regulatory frameworks.

Fraudulent scheme and questionable activities of Koriun Inversiones

Koriun Inversiones functioned as a Ponzi scheme, which involves using money from new investors to give returns to earlier investors, without producing real profits. The business guaranteed a weekly gain of 5%, amounting to 20% monthly, and assured clients that their investment would be recouped in five months. Nonetheless, the continuation of the scheme relied on a steady flow of new investors, which eventually resulted in its downfall and considerable financial setbacks for thousands of individuals.

The National Banking and Insurance Commission (CNBS) verified that Koriun Inversiones did not have permission to function as a financial entity. Inspections conducted at several locations and at the homes of those in charge uncovered large amounts of cash, casually kept in boxes and bags. Furthermore, notable financial activities were discovered, such as a $400,000 withdrawal by American citizens linked to the initiation of the scam in 2017.

Claims of political safeguarding and trust crisis

Representative Edgardo Castro highlighted that Koriun Inversiones managed to function due to the backing of political individuals, legal prosecutors, and government employees. Castro criticized the supervisory bodies for not taking swift measures and insisted on a comprehensive inquiry to identify those accountable for enabling or permitting the deception. He further noted the participation of local leaders who endorsed the firm and the inaction of prosecutors regarding initial alerts.

The shutdown of Koriun Inversiones led to demonstrations by impacted individuals, who called for the repayment of their money and voiced concerns about potentially losing their investments. The CNBS mandated the confiscation of the assets and their reimbursement to investors as far as feasible, even though the procedure is anticipated to be intricate and prolonged. The situation has underscored the susceptibility of people to unsupervised financial setups and the necessity to enhance supervision and safeguard measures within the Honduran financial industry.