Q24N (InsightCrime) A recent multimillion-dollar money laundering investigation in Costa Rica illustrates how the government is attacking the country’s growing drug-related violence by going after the profits.
Prosecutors leading the so-called “Fénix” case indicted 25 individuals on February 28 on charges of laundering drug trafficking profits of around US$17 million. Authorities seized real estate, restaurants, and barber shops, as well as cash, luxury cars, cattle, and horses.
The group allegedly used the two most common money laundering methods seen in Costa Rica: investing in cash-driven economies like real estate and cattle trading, and acquiring shell companies like restaurants or barber shops to launder earnings, falsifying sales and depositing funds into local bank accounts.
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The Fénix investigation started in 2019, and led to the capture of the money laundering ring’s alleged leader, José Giovanni Segura Angulo, alias “Narizón,” in Panama in 2022. Narizón is accused of managing both drug trafficking and money laundering for Mexico’s Gulf Cartel. Bank representatives, municipal officials, and lawyers are also charged in the case and were allegedly key in helping conceal the laundering scheme.
Fénix is one of Costa Rica’s most significant money laundering cases to date, and suggests that as drug trafficking activity in the country has spiked in recent years, local criminal groups have also grown in their capacity to launder profits.
“The more these criminal groups struggle to expand the market and their structural growth, the more income they will logically generate, and this makes them stronger every day. And this is what we are seeing lately in Costa Rica,” said former Costa Rica Security Minister Gustavo Mata.
In 2024, Costa Rica’s drug unit reported over 26 tons of cocaine seized in the country, a slight uptick in comparison to previous years. The country’s record seizures — of over 47 tons — occurred in 2020, which was when much of the profits in the Fénix case were laundered.
InSight Crime Analysis
The Fénix case is emblematic in Costa Rica not just for illustrating the methods of money laundering but as the first significant warning to local criminal gangs offering money laundering services to transnational criminal groups.
Costa Rica earned the highest score in Central America in the 2024 edition of the Basel Institute on Governance Anti-Money Laundering Index. In January 2025, the European Union removed Costa Rica from its blacklist of of non-cooperative jurisdictions for tax purposes, a sign of the country’s improvements in tax governance and international law enforcement cooperation, something its neighbour Panama continues to struggle in implementing.
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Costa Rica increased controls of suspicious transactions and more narrowly defined the crime of money laundering in its penal code in 2015, following recommendations from a regional anti-money laundering body. A 2024 follow-up report found Costa Rica complied or largely complied with 37 out of 40 criteria for adequate anti-money laundering frameworks.
Meanwhile, the nation is seeing record homicide rates that the authorities have connected to clashes between gangs fighting for control of drug trafficking routes. In 2023, homicide rates reached 17.2 homicides per 100,000 people, a 38% increase from 2022.
Connecting South and North America, Costa Rica’s location has made it increasingly popular for international drug trafficking, generating a demand for local money laundering services. For Costa Rica’s homegrown gangs, offering money laundering as a service to larger crime groups generates significant profits. Experts said local service providers sometimes demand payments in drugs rather than cash.
“We have mini cartels, composed entirely of Costa Rican citizens […], which are at the service of large international cartels. They offer their service not only for money laundering but for storing and re-exporting cocaine,” said Mata.
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Data from Costa Rica’s anti-drugs institute shows that 68% of suspicious transactions are connected to Costa Rican citizens rather than foreigners.
The Fenix case could represent a major victory for Costa Rican authorities if they can permanently seize the assets in question, said security analyst Daniel Chinchilla.
“In an earlier case, we saw the conviction of a big drug trafficker, but all the money and all the assets had to be returned to him because they couldn’t prove in the trial that the money was the product of drug trafficking,” Chinchilla said.
Article was originally published at InsightCrime.org. Read the original here.
Featured Image: The capture of José Giovanni Segura Angulo, alias “Narizón,” and two other suspects in Panama in 2022, who were accused in Caso Fénix. Credit: Panama’s Government.
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