Investors in the Panama Trump Tower Included a Notorious Criminal Who Laundered Drug Money

The close ties between Colombian cartels and the Trump Ocean Club.

The Trump Ocean Club building in the Panama Pacific neighborhood of Panama City.

Rodrigo Arangua/AFP/Getty Images

Donald Trump has made little effort to hide the fact that, as president, he continues to profit off the dozens of properties either that he owns or that bear his name. According to a new report by the anti-corruption organization Global Witness, some of those profits may include money that was laundered by Colombian drug cartels through a Panama property carrying the Trump brand.

The Trump Ocean Club International Hotel and Tower was Trump’s first international real estate deal, and it followed a, by now, familiar formula, in which the Trump organization does not own the property but instead licenses the Trump name to a third party. That arrangement limits the Trump family’s legal and financial exposure in a development deal, but still allows them to reap handsome profits. It also allows them to avoid directly overseeing  the sales process, even when there are a number of obvious warning signs that a property like the Ocean Club could be used to launder money.

According to Global Citizen, and new reports published by Reuters and NBC, the early success of the Ocean Club may have drawn on laundered drug money from David Eduardo Helmut Murcia Guzmán, more commonly known as David Murcia, a notorious con artist,  when he purchased units at the property. Murcia is known as the “Bernie Madoff of Colombia,” and in 2011 was sentenced to nine years in U.S. prison for his international money laundering money, which included funds from trafficking drugs. Now, after serving six years of that sentence, Murcia is expected to return to Colombia, where he will serve an additional 22 years in prison, Reuters reports.

Murcia didn’t make his way into the Trump property alone. He worked with Alexandre Henrique Ventura Nogueira, an infamous Brazilian real estate broker known for his shady business relationships, to buy units at the Trump Ocean Club before the construction was complete. Nogueira was crucial to the early success of the Trump hotel in Panama, where he was responsible for roughly one-third of the 666 pre-construction units sold at the property. According to Colombian media reports reviewed by Global Witness, a member of the guerrilla movement Fuerza Alternativa Revolucionaria del Común, or FARC, known for trafficking cocaine, invested in Murcia’s company DMG. At that time, the U.S. had labeled FARC as a terrorist organization. Since he couldn’t bring the drug money to the bank, Murcia did what a lot of cartel criminals do: He invested the cash in real estate, which makes illicit money much harder to track.

In a conversation secretly recorded by one of Nogueira’s former business partners in 2013 that was obtained by Reuters, the Brazilian real estate broker admitted he was in the business of laundering money. “More important than the money from real estate was being able to launder the drug money—there were much larger amounts involved,” Nogueira said. “When I was in Panama I was regularly laundering money for more than a dozen companies.” Murcia bought his units at the Trump property with money smuggled into Panama by Colombian drug mules, according to the report from Global Witness, though in interviews with Reuters and NBC, Nogueira denies that he bought any of the units at Trump Ocean Club with illicit cash.

Murcia is best known for operating a massive pyramid scheme in Colombia, creatively named DMG for Murcia’s initials, that swindled millions of people across the country out of more than $1 billion. DMG was shut down in 2008, leading to protests across Colombia from angry investors who were defrauded by Murcia’s scheme, which involved prepaid debit cards that rewarded investors for recruiting new members. Murcia used DMG as a cover to launder millions of dollars made from narcotics sales, some of which was concealed by investing in real estate or in secret companies, according to prosecutors. “Murcia Guzmán wove an intricate web of deception across continents to disguise his dirty drug money and support his lavish lifestyle,” said Preet Bharara, the United States Attorney for the Southern District of New York, in a 2009 announcement of his arrest.

Trump became officially involved with the Panama development in 2006 after being approached by Roger Khafif, a Panamanian businessman who needed a big-name partner to help secure financing. By then, Trump had filed for bankruptcy five different times over the course of 14 years and had accumulated more than $1 billion in debt. When Khafif met Trump at his Trump Tower property in New York to propose the partnership in 2005, Trump reportedly told Khafif that his interest in the property was inspired by his then-24-year-old daughter, Ivanka. Trump said he wanted the Panama development “to be her baby.” Alexandre Henrique Ventura Nogueira, who was responsible for facilitating the pre-construction unit sales, has said that Ivanka was a key manager of the Panama licensing deal and that he had met with her at least 10 times over the course of the development project, though a spokesperson for the Trump Organization told Reuters no one in the Trump family remembers ever meeting Nogueira, despite the fact that Ivanka and Nogueira have been pictured together.

It’s not clear what, if anything, Trump knew about how the building’s units were being sold. At least 139 Panamanian anonymous shell companies were created before the construction started on the hotel, which were instrumental in facilitating the early, pre-construction sale of units. Nogueira also noted in an interview with Reuters and NBC that some properties at the Trump hotel in Panama were purchased with bearer shares, which are unregistered stock certificates that therefore obfuscate the owner of the shares and allow investors to transfer assets anonymously, a practice that’s banned in most countries but only became restricted in Panama in 2015.

But Global Witness, and experts quoted by Reuters and NBC, said there are glaring red flags a businessperson who was inclined to conduct due diligence on a building that would bear their name would catch. “The warning signs were there for a responsible businessperson, but it seems Trump didn’t want to know,” said Eryn Schornick, a senior policy adviser at Global Witness in a statement.

Trump has reportedly made at least $50 million off the property since it began selling units a decade ago. Yet that figure might be too low. According to a 2015 report from the AP, one bond prospectus in 2007 listed Trump’s expected licensing fees alone to hit $74.5 million by 2010 before the hotel’s construction was even completed in 2011. Trump’s name helped secure the financing for the building, and he got a cut of every unit sold; in sum, the Panama hotel has amounted to one of Trump’s most profitable licensing deals yet. And Trump’s 2017 financial disclosures show he is poised to continue reaping profits off the Ocean Club, thanks to management companies he owns that contract with the hotel.

In June, the Trump Ocean Club International Hotel in Panama hosted guests from the U.S. Embassy and paid the hotel $632 using a government travel charge card, according to a receipt analyzed by Slate and obtained by the transparency group Operation 45. Though Trump doesn’t own the hotel, his Panamanian hotel management corporation made more than $800,000 between January 2016 and April 2017, the president’s recent financial disclosures indicate, and his payout is likely tied to the success of the property. The Domestic Emoluments Clause of the U.S. Constitution prohibits the president from receiving any compensation from federal, state, or local governments beyond the salary he earns as chief executive, whether the payment was made inside or outside the U.S. This transaction, along with other government spending at Trump properties since the president took office, may be in direct violation of the constitutional anti-corruption clause.