A helicopter crash and a financial fraud



El Salvador's police and security forces were burying eight of their own this week. The director of the National Civilian Police, Mauricio Arriaza Chicas, and seven other members of the police and armed forces were killed last Sunday night when the helicopter they were flying in crashed in eastern El Salvador. They died along with a fugitive banker wanted in a corruption case who was being returned to face justice in El Salvador.

From the Associated Press report of the event:

El Salvador’s military says the national police director, other high-ranking police officials and a fugitive banker were among nine people killed in a military helicopter crash in a rural part of the country.

The cause of the crash on Sunday night is under investigation. It occurred after the banker, Manuel Coto, was captured in Honduras over the weekend and handed over to Salvadoran authorities at the border.

Coto, the former manager of the COSAVI savings and loan cooperative, had been the subject of an Interpol arrest warrant and one of 32 people implicated in the embezzlement of more than $35 million by the cooperative’s directors and employees.

Announcing the deadly crash, Salvadoran president Nayib Bukele tweeted:

What happened cannot be considered a simple "accident"; it must be investigated thoroughly and to the last consequences. We will request international help.

The crash killed one of the most prominent figures in Nayib Bukele's war on gangs.  Arriaza Chicas was appointed by Bukele to head the PNC in 2019, and was a loyal leader in the president's security cabinet.  He was a 30 year veteran of the PNC who had risen through the ranks during numerous presidential administrations.  When Bukele initiated the State of Exception in March 2022, it was the police under Chicas who would be charged with arresting more than 70,000 Salvadorans in the first year, but with many allegations that large numbers of the arrests were arbitrary and lacked proof.   

The United States Embassy put out a statement:

"The United States Embassy is supporting El Salvador in these painful times. At the request of the President @nayibbukele, a team of U.S. government air accident investigators will arrive in the country in the coming days to support Salvadoran authorities in the investigation of the tragic accident that claimed the lives of the Director of the @PNC_SV, Commissioner General Arriaza Chicas, and his companions."

The Santa Victoria Savings and Loan Cooperative, known generally by its initials in Spanish (COSAVI), has been involved in a corruption scandal since this spring.  Possible problems with COSAVI came to light when depositors reported that COSAVI was limiting the quantities they could withdraw from their accounts.  El Salvador's financial regulator shut the institution down in May, and authorities now say that insiders had embezzled as much as $35 million from the institution since 2015.  

An article in GatoEncerrado explains:

In early May, the Attorney General's Office (FGR) and the Superintendency of the Financial System (SIF) of El Salvador publicly announced that an investigation led them to discover that, since 2015, directors and employees of the Santa Victoria Savings and Credit Cooperative of Limited Liability (Cosavi de RL) allegedly committed fraudulent operations, money laundering, defrauding the public economy and diverted funds to personal accounts for more than 35 million dollars. Part of that money was deposited in bank accounts in other countries, such as the United States and Germany. 

 GatoEncerrado points out that COSAVI had a high profile in the country:

Cosavi, in addition to being a banking institution, was well known in Salvadoran society for sponsoring concerts, different cultural events, patron saint festivals and Christmas festivities. The investment in these festivals and events gave the appearance that it was a financially solvent institution. 

It wasn't just sponsoring festivals and events, however.  Municipalities in the country also were indebted to COSAVI to the tune of $21.7 million as of May 2024.  There's no word on whether any of those loans are in default.

COSAVI also had links to the governing Nuevas Ideas party.  It donated $60,000 to Nuevas Ideas in 2020, the last time that party actually disclosed its finances.  In November 2023, Henry Flores, the Nuevas Ideas mayor of Santa Tecla, a suburb of San Salvador, tweeted that he was proud to have COSAVI as a strategic ally with the city.   Flores has since erased that tweet from his profile on X.


Manuel Coto was the general manager of COSAVI.   Although 15 COSAVI insiders had already been arrested in El Salvador, including Coto's parents, he had fled the country.  The arrest of Coto is surrounded in contradictory accounts.  This past July 27, Salvadoran attorney general Rodolfo Delgado reported on social media that Coto had been arrested in Panama.   There followed no updates about his extradition. Then came word on September 8 that Coto had been captured in Honduras, and was being swiftly turned over to Salvadoran authorities.  Officials in Honduras tweeted that Coto had been travelling with human smugglers heading towards the US on September 8 when he was detained and held under the Interpol arrest warrant. Officials in Panama told LaPrensaGrafica that Coto had never been arrested in Panama, contrary to Delgado's earlier report.    For his part, Nayib Bukele tweeted that  "Not only did we manage to capture him at an international level, but, thanks to our intelligence services and the authorities of friendly countries, we avoided a long and complex extradition process." 

Four days before the arrest of Coto, opposition legislators in the Legislative Assembly had attempted to have legislation passed to create a trust fund to pay off the account holders in COSAVI.  To date, only depositors with accounts with less than $3000 have been able to withdraw their funds.  The Nuevas Ideas-controlled congress refused to take up the trust fund measure.  Depositors who still had not received their money protested again on Tuesday outside of regulators' offices.

The crash of the helicopter has prompted a wave of conspiracy rumors on the internet.   The ambiguous tweet of Bukele about this not being a "simple accident" prompted some of his followers to see this as an attack on Chicas and security chiefs by opponents of the Bukele regime and its war on gangs.  Others saw the helicopter crash as a way to silence Coto to avoid evidence coming out about links between the COSAVI corruption and Nuevas Ideas.  It should be noted that, to date, there is no evidence to support any conspiracy theory.    

Comments

Lawrence M. Ladutke said…
Arriaza Chicas had a long history as a dirty cop. I first came across him while researching the murder of Adriano Vilanova that took place in the late 90s. He played a prominent role in harassing and intimidating the El Diario de Hoy reporter who broke the story of police involvement, Violeta Rivera. He trained with the infamous carabineros in Chile during the final years of the Pinochet regime.
12:43 PM
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