The View From The Hotel Balcony
Some Things Never Change
Greed, investment schemes, and naivety never seemed to go away - or change significantly with time or location.
Five days ago, the Panamanian Justice Department shut down an investment corporation operating in Panama as DMG Investments. DMG's CEO, David Guzman a 26-year old Colombian who resided for the last two years in a $9,000 per month rental luxury condo in Panama City, was arrested and deported by request of the Colombian government where Guzman is under indictment for fraud, running a Ponzi scheme and money laundering.
In the last five days, in addition to the luxury yacht and three autos confiscated last week, officials have seized three Maserattis, two Lamborghini, two Ferrari, and two Hummers. Officials say they are "making some progress" on untangling the web of 200+ shell companies used to run Guzman's operations in Panama. The shells were established to make it difficult to determine the sources of funding or the individuals involved. For example, each of the vehicles was registered to a different one of the shell companies. Officials also noted that many of the companies where operating without licensing, which raises the additional questions about how/why they were able to open bank accounts in banks in Panama.
The basic model of DMG's core company has been characterized as a "classic Ponzi scheme." The explanation example provided by officials is that "a person would invest any amount of money, say for example $10,000, and would receive a 'redemption card' for $10,000 with which they could make purchases of any kind, virtually anyplace in the country that accepted credit cards. When the investor had exhausted their purchase limit, they would be issued a 'black redemption card' good in six months from issue for (in this example) $5,000 in additional purchases (a 150% interest rate), or a similar card good a year from now for $10,000 (a 200% rate)." The model must have worked since DMG had thousands of happy investors in it's over three years of operations in Panama.
But, how could it work? Well, it turns out it was not a 'classic' Ponzi scheme - the money to pay old investors was not coming just from new investors. Panama's investigators are now in agreement with Colombian officials that the whole business was a very elaborate and sophisticated scheme to launder drug money. Welcome to modern crime!
It is interesting to note that the Colombian government officially notified the Panamanian government over three weeks ago that Guzman was wanted in Colombia and several other Latin American countries for operating the exact same illegal business model that he was now operating in Panama. The Panamanian government's only action at that point was to issue a 'Consumer's Alert' stating that "DMG's business might not be a good investment for consumers." The shut-down action did not occur until Colombia petitioned Panama to extradite Guzman to Colombia for prosecution.
It is also interesting, and enlightening, to note that there have been large demonstrations by DMG investors in both Colombia and Panama prompted by the company's shut-down. The demonstrations were not at DMG's shuttered offices, but at government offices. Demonstrators are irate that the governments messed up a good deal for the happy investors.
My Video About Children´s Smiles Seems Appropriate For The Season
The Cruise Season In Panama Has Started
Panama's Tourism Bureau has opened an investigation to determine why visitors on cruise ships stopping in Panama are not disembarking to sample the local color. The Coral Princess docked overnight last weekend in the port of Colon, the first major cruise ship to arrive this cruise season. The Coral Princess was in port from 11AM on Friday until 3PM on Saturday, and only 700 of the 1,930 passengers got off the ship to 'play tourist.'
Do you suppose that the investigation may 'uncover' that the world-wide infamy of the crime problem in Colon may have something to do with it? Duh! Dear Tourism Bureau: Read any popular tour guide book or pamphlet published in the last 4-5 years. Over!
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