Political ties complicate investigation of Koriun case

The Koriun Inversiones situation has triggered heated discussion in Honduras following the exposure of a Ponzi scheme impacting over 35,000 residents. The public accusation by Representative Edgardo “Chele” Castro has brought to the forefront the potential political and legal shield that enabled the company to function unlawfully.

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.

Ponzi scheme and irregular operations 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) confirmed that Koriun Inversiones was not authorized to operate as a financial institution. During inspections carried out at various branches and administrators’ homes, large sums of cash were found, stored informally in boxes and bags. In addition, significant financial movements were identified, including the withdrawal of $400,000 by US citizens associated with the start of the fraudulent scheme in 2017.

Accusations of political shielding and trust crisis

Representative Edgardo Castro highlighted that Koriun Inversiones managed to function due to the support from politicians, legal authorities, and state employees. Castro criticized the failure of oversight bodies to respond promptly and called for a comprehensive inquiry to ascertain the accountability of those who enabled or overlooked the fraudulent activities. He also noted the role of mayors who endorsed the company and the prosecutors’ inaction regarding prior alerts.

The shutdown of Koriun Inversiones triggered demonstrations by those impacted, who called for the recovery of their money and voiced concerns about the potential loss of their investments. The CNBS mandated the confiscation of funds and their reimbursement to investors as much as feasible, even though the procedure is anticipated to be intricate and time-consuming. The situation has underscored the susceptibility of individuals to unregulated financial plans and the necessity to enhance monitoring and protection systems within the Honduran financial industry.