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Costa Rica – Costa Rica won’t investigate money laundering allegations

By - 13 May 2016

The government of Costa Rica’s has refused to investigate a local online sportsbook after the US claimed that it was being used for money laundering.

The deputy prosecutor of the Costa Rican Money Laundering Office, Alvaro Montoya, said that the business of online gaming is legal and as such does not fit into any offense under national law. Consequently, the money generated by the business could not be classified as a wrongful act per se as “Bets and betting,” is not a crime,” he said.

According to local daily La Nación the controversy centres on online sportsbook company, 5Dimes. In March investigators for the Department of Homeland Security alleged in a District Court in Philadelphia that Amazon gift cards had been used to launder around US$2m. Prosecutors in the US say that the 5Dimes sportsbook has urged users to use amazon.com gift cards to make illegal Internet bets.

According to the filing: “The investigation has determined that 5Dimes has developed an alternative to the traditional online financial payment methods, which is unavailable to 5Dimes under federal law, in order to operate its illegal betting operation in the US. This illegal alternative relies on the use of [Amazon gift cards], in violation of Amazon’s terms of service.”

In March it was revealed that the company is managed by Marisol Carvajal Cordero, who has a company in Malta (Woodtree Equipment Limited) and another in the United Arab Emirates (Latitude Global FZ). These companies transferred around US$67m to the Bank of Costa Rica (BCR) via accounts from the trust company Latinamerica Trust & Escrow Company S.A. (Latco). The Latco accounts, who handled money from companies run by the 5Dimes manager, were closed by the BCR in November 2015 due to lack of information regarding the source of the money.

However the prosecution has ruled out investigating whether illegal bets were being made in the Unites States in Costa Rica. For the Costa Rican Attorney, betting online would only be subject of an investigation for money laundering if someone was using the business to launder money for an illegal activity such as drug trafficking. As online gaming is legal in Costa Rica there will be no investigation.

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