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Gold Mining Company Actually Trafficking Cocaine: Authorities

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Peru's Sanchez-Paredes family has apparently drifted away from its core business.

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"Los S-P are definitely cocaine traffickers, that's a given in the country," he wrote. "Very good at covering tracks and bribing judiciary, though."

In fact, the judiciary could well be in the pocket of the Sanchez-Paredes family already. As explained in a 2011 report from the Lima office of the Konrad Adenauer Stiftung, a foundation aimed at "promoting freedom and liberty, peace and justice," the "institutions of the Peruvian state are…in danger of falling in the hands of the drug industry."


Manuel Sanchez-Paredes and President Alejandro Toledo in 2006

Alarmingly Weak and Easy to Infiltrate

Described by research coordinator Philip Reiser as "alarmingly weak and easy to infiltrate," Peru's establishment is in danger of being "controlled" by the drug trade.

The amounts of money involved are so vast, the ups and downs of Peru's narcotics industry shape almost all aspects of the overall economy. (They shape inter-familial relations as well: In 1987, Fidel Sanchez Alayo, the son of Manuel Sanchez Paredes, was linked to the murder of his uncle in Mexico, where authorities discovered a cocaine lab.)

After the 1995 arrests of "important drug traffickers" in Peru, as well as "massive over-production" caused coca prices to drop, Tingo Maria, a once-booming center of Peruvian cocaine production, was on the verge of bankruptcy.

The Nissan (PINK:NSANY) and Toyota (NYSE:TM) dealerships which, according to the San Francisco Examiner, once sold more cars than any other dealerships in Peru, closed their doors after sales ground to a complete halt.

"Coca absorbed the majority of people who are now unemployed," Ernesto Parra, head of the UN Interantional Drug Control Program in the town, told the newspaper.

As of 2010, roughly 15 years later, Tingo Maria is thriving once again.

From the New York Times:

The resurgence of Peru's cocaine trade is on display in Tingo María, a bustling town that suffered when coca growing plunged during the 1990s. Now legions of motorcycle taxis swarm the streets and small hotels and restaurants cater to free-spending farmers.

Nightclubs feature Peruvian bands belting out cumbia, the folk music transplanted from Colombia, with lyrics that celebrate and lament the travails of cocaleros, or coca growers.

"Cocalero, your pots are empty; cocalero, your wife is crying," goes a passage by a local cumbia band. "But keep planting more coca, so that money will sprout."

Plenty of money is indeed sprouting, as evidenced by yesterday's announcement of the Sanchez-Paredes seizure.

The matter is being handled by the Asset Forfeiture Unit of the US Attorney's Office. The Drug Enforcement Administration is continuing its investigation. Assistant US Attorney Sarah E. Paul is in charge of the case.

Follow Justin Rohrlich on Twitter: @chickenalaking

No positions in stocks mentioned.
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