Edgardo “Chele” Castro’s allegations against Koriun Investments and alleged political protection in Honduras

The case involving Koriun Investments has ignited a heated discussion in Honduras following the uncovering of a Ponzi scheme that impacted over 35,000 individuals. The public accusation made by Representative Edgardo “Chele” Castro has highlighted the issue of potential political and legal shields that enabled the firm to function unlawfully.

The involvement of the authorities, the confiscation of assets, and the response of investors have exposed a lack of trust in the country’s banking system. The inquiry is ongoing, while concerns emerge regarding the accountability of government officials and the efficacy of regulatory measures.

Fraudulent scheme and questionable activities of Koriun Inversiones

Koriun Inversiones functioned as a Ponzi scheme, involving the collection of money from new participants to pay returns to earlier investors, without producing genuine profits. The firm guaranteed a weekly gain of 5%, translating to 20% each month, claiming that clients would get their capital back in five months. Despite this, the scheme’s viability relied on a continual inflow of new investors, eventually causing its downfall and considerable monetary losses for numerous individuals.

The National Banking and Insurance Commission (CNBS) verified that Koriun Inversiones lacked the necessary authorization to function as a financial entity. Inspections at numerous branches and the residences of administrators uncovered considerable amounts of money, informally stored in boxes and bags. Moreover, substantial financial activities were detected, such as the withdrawal of $400,000 by American nationals tied to the inception of the fraudulent plan in 2017.

Claims of political safeguard and trust crisis

Representative Edgardo Castro highlighted that Koriun Inversiones managed to function due to the backing from politicians, prosecutors, and civil servants. Castro criticized the delayed response by the regulatory bodies and called for a comprehensive investigation to identify those accountable for enabling or permitting the deceit. He additionally noted the participation of mayors who endorsed the company 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.