VZCZCXYZ0001
PP RUEHWEB

DE RUEHBO #4201/01 3262102
ZNR UUUUU ZZH
P 212102Z NOV 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC PRIORITY 5687
INFO RUEHBR/AMEMBASSY BRASILIA 8512
RUEHCV/AMEMBASSY CARACAS 1345
RUEHZP/AMEMBASSY PANAMA 2694
RUEHQT/AMEMBASSY QUITO 7454
RUEHPE/AMEMBASSY LIMA 6760
RUEHLP/AMEMBASSY LA PAZ NOV SOUTHCOM MIAMI FL
RUEAWJC/DEPT OF JUSTICE WASHDC
RUEABND/DEA HQS WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS BOGOTA 004201 
 
SENSITIVE 
SIPDIS 
 
TREASURY FOR FINCEN MSWANSON; EEB/ESC/TFS FOR JJALORINA 
 
E.O. 12958: N/A 
TAGS: EFIN ETTC PTER KCRM SNAR PGOV CO
SUBJECT: GOC ARRESTS ALLEGED PYRAMID RINGLEADERS AMID 
PROTEST; BEGINS ASSET RETURN TO VICTIMS 
 
REF: BOGOTA 4134 
 
¶1. (SBU) SUMMARY: Amid collapsing pyramid schemes suspected 
of defrauding at least 300,000 Colombians (reftel), the GOC 
seized DMG Holding Group, S.A., the largest suspected scam in 
the country and arrested its founder and principal directors 
on charges of money laundering, illicit enrichment, and 
fraud.  The GOC has initiated a plan for victims of DMG to 
file restitution claims for payment, on a sliding scale, from 
any recovered assets.  Nevertheless, most low income 
claimants appear to blame the GOC seizure, rather than 
questionable DMG business practices, for the loss of their 
savings and several demonstrations against the GOC action 
continue around the country.  In a series of public 
appearances, President Uribe has defended the closure and 
arrests for staving off worse losses and shutting down a 
major money laundering operation for narcotics funds.  END 
SUMMARY. 
 
DMG Ringleaders Taken Down 
-------------------------- 
 
¶2. (SBU) Following the November 17 closure of all DMG offices 
in Colombia, and similar closures of the firm's Quito and 
Caracas branches, Panamanian authorities in coordination with 
GOC Police arrested DMG founder David Murcia Guzman November 
19 and immediately deported him to Colombia.  Colombian law 
enforcement arrested six other senior DMG officials, 
including Murcia's wife, mother, and brother-in-law who had 
various DMG assets listed in their names.  According to press 
reports, two of the DMG directors were arrested carrying more 
than USD 500,000. (NOTE: Embassy Bogota Consular Section has 
entered lookouts for the announced arrestees and revoked the 
visas of five of those who had valid visas.  END NOTE.) 
 
¶3. (SBU) The National Prosecutor's office based the arrests 
on evidence derived from more than 2,500 phone intercepts 
implicating Murcia and the other individuals in fraud, money 
laundering, and other crimes.  The Police also pulled 
evidence from more than 100 computers seized November 16 from 
an office that was not listed in DMG public records but, 
according to GOC officials, appeared to serve as the 
financial nerve center for the company.  Murcia and 
colleagues are currently incarcerated in separate jails 
outside of Bogota, awaiting arraignment. 
 
Claim Process Launched 
---------------------- 
 
¶4. (U) Meanwhile the GOC has appointed a caretaker for seized 
DMG assets and launched a process for DMG depositors to file 
claims to partially recuperate their cash investments from 
the liquidation of DMG.  After receiving a flood of claimants 
at the Financial Superintendent's office the day after DMG's 
closure, the GOC decided to move the process to Bogota's El 
Campin stadium.  Under streamlined rules, depositors can 
present themselves in person with copies of their investment 
documentation and enroll a claim for restitution from any 
seized DMG assets.  The expedited process is based on 
President Uribe's November 17 State of Emergency decrees and 
aims to provide responses to depositors within 20 days. 
 
¶5. (U) Colombian media reported on November 21 that several 
politicians, including Senator Samuel Arrieta, a member of 
the Uribe coalition, may have been involved with DMG.  The 
Fiscalia has not commented on the possible political angle, 
but media is rife with speculation that a number of 
politicians could be implicated as the para-political scandal 
continues. 
 
Many Victims Blame GOC 
---------------------- 
 
¶6. (SBU) Despite GOC efforts to assist victims, many blame 
the government for wrecking DMG and costing low-income 
investors their life savings.  Various protests and marches 
have occurred since the GOC-imposed closure of DMG on 
November 17, including among victims waiting in line to seek 
restitution.  Police used tear gas to disperse one angry 
 
gathering that blocked a main road in Bogota November 20, 
reportedly instigated by individuals wearing DMG shirts and 
urging depositors to not participate in the restitution 
process. 
 
¶7. (SBU) President Uribe and other GOC officials vehemently 
defend their actions as necessary to prevent further losses 
among DMG depositors and halt suspected laundering of illicit 
funds.  However, as the majority of DMG investors are 
low-income Colombians long excluded from the traditional 
banking sector by high fees and lending rates, the firm's 
closure has exposed socio-economic rifts and placed the GOC 
on the defensive with DMG investors while it simultaneously 
tries to help them recuperate lost funds.  Representative Roy 
Barreras told us the DMG scandal and protests could not have 
come at a  worse time for Uribe, with a too-close-to call 
vote pending in the Congress over a resolution to change the 
consistution to allow a possible third term for Uribe and the 
population spooked over the world financial crisis. 
BROWNFIELD