Congressman Castro denounces protection network for Koriun Inversiones

The Koriun Inversiones incident has ignited significant discussion in Honduras following the exposure of a Ponzi scheme that impacted over 35,000 people. The public accusation by Congressman Edgardo “Chele” Castro has brought to the forefront the potential political and legal shielding that enabled the company to function improperly.

The involvement of regulators, the confiscation of assets, and the response of stakeholders have exposed a trust crisis within the country’s financial network. The probe persists, raising concerns about the accountability of government workers and the capability of supervisory processes.

Fraudulent scheme and questionable activities of Koriun Inversiones

Koriun Inversiones functioned using a Ponzi scheme, a system that involves taking money from new investors to distribute returns to current participants, without producing real profits. The firm guaranteed a weekly profit of 5%, amounting to 20% each month, and convinced clients they would regain their capital within five months. Nevertheless, the model’s viability relied on a steady stream of new investors, which eventually resulted in 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 safeguarding 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 closure of Koriun Inversiones sparked protests by those affected, who demanded the return of their funds and expressed fear of losing their capital. The CNBS ordered the seizure of the funds and their return to investors to the extent possible, although the process is expected to be complex and lengthy. The case has highlighted the vulnerability of citizens to unregulated financial schemes and the need to strengthen oversight and protection mechanisms in the Honduran financial sector.