Merino’s Network of Front Men

Septimo Sentido

By Moisés Alvarado

[Translation by IASW]

When he had to return to San Salvador, to begin preparing the descent of the hill of the “compas,” Jose Luis Merino bought a soda while waiting for his contact in the area to arrive. It was the beginning of 1992, and the ink on the Peace Accords was still fresh.

He received the drink and left without paying. More than a decade on the hills, where daily life was combat and survival, where each guerrilla received three meals in the camp without worrying about getting them, made him forget that simple agreement of modern times: goods are exchanged for money. The anecdote is recalled by Merino himself in his autobiographical book “Comandante Ramiro,” titled in honor of the name he used during the armed conflict, Ramiro Vásquez. It is the testimony of a man returning from the battle on the hills, unaccustomed to the world. An image very distant to the one Jose Luis Merino now embodies.

He is one of the three leaders of the party that was born from the extinct guerrilla, the Farabundo Martí National Liberation Front (FMLN), the political institution that currently governs El Salvador. And since the end of his term as a deputy in the Central American Parliament (PARLACEN) in October 2016, he occupies a position that previously did not exist, the Vice Minister for Investment and Financing for Development. His job is to attract foreign investment in coordination with other institutions, such as the Ministry of Economy. A job for which he receives a salary of around $2,500. Also, since 2006 (the year of its founding), he has been a consultant and the face of Alba Petróleos in El Salvador; the Salvadoran company which is 60% owned by PDVSA, the Venezuelan state oil company. The rest belongs to ENEPASA, a company established by several mayors from the FMLN.

Jose Luis Merino is also a man in the sight of US authorities who are suspicious of his finances. In mid-June of 2017, 14 congressmen from both the Democratic and Republican parties sent a letter to the Secretary of the Treasury in which they request that Merino’s financial activities be investigated.

US politicians cited “national interests” in calling for an investigation to be opened under the Drug Kingpin Act, into Merino’s “long-standing relations” with “organized crime networks that are subject to criminal investigations in the United States for cocaine trafficking and money laundering.” The challenge is that, in El Salvador’s commerce registry, his name does not appear in any active company. The last one was Alba Alimentos of El Salvador, a subsidiary of Alba Petróleos, of which he was president between 2012 and 2015. Abroad he is not registered as a member of any company. He does not have real estate under his ownership, and the three cars that belong to him do not show up in any database, which makes their use on the streets illegal. He is, according to the records, a man without possessions.

This does not dispel accusations. Nelson Mena, an anti-money-laundering specialist at a Washington-based international organization points out that one of the figures frequently used to conceal assets is that of a prestanombres or front-man: a person who appears as the president of a company, but in reality, is not the final beneficiary, or someone who has property in his name that actually belongs to another person.

What led US congressmen from both parties to sign that letter was a preliminary investigation involving elements of the US Treasury, the Federal Bureau of Investigation, and the Drug Enforcement Agency. Séptimo Sentido had access to this inquiry and got testimony from two people who certified its authenticity, although they asked to protect their identities as a condition for talking to us.

One of the main discoveries was the identification of those who, in their opinion, are the main front-men for José Luis Merino, including his brother, Sigfredo Israel Merino Cabrera, and his personal assistant, Erick Giovanni Vega. The investigation highlights, above all, the name of Jose Mauricio Cortez Avelar, who is identified as the most important front-man. This is based on his repeated appearances in the records of companies related to Alba Petróleos of El Salvador in several jurisdictions, mainly in El Salvador and Panama.

According to the same investigation, another reason why Cortez Avelar is a person of interest is that he has four accounts in banking institutions abroad: two at Saxo Bank in Switzerland and two at Banco Espírito Santo in Brazil. Because it is a preliminary investigation, it was possible to access living sources, not documentation. It was not possible to independently verify the existence of these accounts.

A person involved in the investigations, whom Séptimo Sentido interviewed via e-mail, asserts that the hypothesis points to the existence of a money laundering operation with José Luis Merino at the top and that uses a close circle of collaborators: his brother Sigfredo Israel Merino, Erick Vega (his personal assistant for 10 years) and Cortez Avelar. Under them are dozens of participants of various nationalities.

An attempt was made to arrange an interview with Merino’s assistant Erick Vega, but after several e-mails and at least eight calls, no response was received.

In early 1981, when he was commander of the Armed Forces of Liberation, Jose Luis Merino traveled to Vietnam to learn from its citizens a more effective way of conducting guerrilla warfare. He returned astonished by the organizational capacity of the people, who dared to defeat “American imperialism.” And, since then, anti-imperialism has been part of his discourse.

But this has not prevented his collaborators (already identified by the FBI, the Treasury Department and the DEA) from establishing companies in the US, the same country in which 14 congressmen requested an investigation of Merino’s finances in June 2017.

It is a network of three companies in the state of Nevada that has been identified in the aforementioned investigation. All three are limited liability corporations. In this type of company, the partners are responsible for the activities of the company only up to the limit of their monetary contributions.

The three companies are Alba Petróleos Las Vegas, Kalandos Investment Group, and Petro Global International, which were active from 2011 to 2014. According to Nevada’s public records, seven individuals who are members of these companies also show up on the board of directors of companies in El Salvador and Panama related to Alba Petróleos of El Salvador, according to the respective trade registries of both Central American countries.

Nevada is now a tax haven, and it is almost impossible to get financial information about a company’s activities. For the same reason, the amounts of money that have moved through these companies are a mystery. Limited liability companies also have other advantages in Nevada: there are no state taxes, no personal income tax is levied on the members, and there is no exchange with the Internal Revenue Service, so there is no obligation to share information related to companies domiciled there with any federal authority. A person who is not a US citizen can be part of a company by simply stating a home address in the state, which can be a small office shared with dozens of individuals. The members of the three companies receive correspondence at the same address.

In addition to some of the people mentioned by the FBI, Treasury, and the DEA, there is another person that is named repeatedly in these companies’ records: Aldo Adrián Aguirre, a Guatemalan citizen who not long ago served as his country’s honorary vice-consul in Las Vegas and whose name frequently appears on companies related to Alba Petróleos in El Salvador and Panama.

The Main Front Man

José Mauricio Cortez Avelar is now a one-man band with participation in multiple businesses. But it was not always like this. With a messy head of hair (black and white), prominent chin and steep nose, until 2010 the professional activities of this 60-year-old lawyer had been limited to serving as a notary, or as an attorney for people who did not want to go through a cumbersome civil process.

His fate began to change at the beginning of the present decade, specifically in 2011. That year, a man who had only had a stake in small credit unions or religiously oriented societies started to join the boards of several diverse companies. The same companies that, from the following year, would be the recipient of multimillion loans from Alba Petróleos of El Salvador.

In 2011, Cortez Avelar would also become president of a company in Panama and member of another limited liability company in Nevada. All tied to Alba Petróleos.

According to trade registries in El Salvador and Panama, his participation in companies financed by Alba Petróleos did not stop growing in the following years. In El Salvador alone, he has been a member of 15 such companies (a shareholder in five of them) and is still active in 10. He acts as counselor and mercantile attorney in two of those. In Panama, he is a member of the board of directors of seven companies related to Alba Petróleos; to these, we must add the another two in Nevada. In just six years, twenty-four companies, through which millions of dollars have circulated, were created and had Cortez Avelar’s participation.

With all this in his resume, Cortez Avelar may seem like a potential business tycoon. But, at least for the Salvadorian treasury, he is a middle-income man. This is reflected in the annual income statements that he has submitted to the Salvadoran Ministry of Finance from 2010 to 2015. They are as follows: $ 14,520 (2010), $ 14,961 (2011), $ 18,098 (2012), $ 27,744 (2013), $9,423 (2014) and $ 33,881.25 (2015).

That means, in his most profitable year (2015), he made a total of $33,881.25 for the whole year, and his monthly income did not exceed $2,750, which, at least in El Salvador, equals the maximum salary of a commissioner of the National Civil Police or an administrative assistant of the Supreme Court Justice. A good salary, but still far from the image of a man with participation in so many companies, inside and outside El Salvador.

We sent an e-mail to Cortez Avelar through the same address that he has provided to the Port Authority of El Salvador. This address was provided so that the Authority can communicate with him in the framework of the process that the institution opened concerning the Guazapa I ship, owned by the offshore company of Alba Petróleos of El Salvador Guazapa, SA—stranded for 20 months in the Port of the Central American Union.

Guatemalan provided to the Port Authority of Panama (AMP) in El Salvador so that it could communicate with him within the framework of the process that the institution opened with respect to the Guazapa I ship owned by the “Offshore” of Alba Petróleos Guazapa, SA, stranded for 20 months in the Port of the Central American Union.

We also tried to communicate with him through the address of one of his companies, PROCREADOR. This turned out to be his place of residence. When we tried to reach him, he was not home. We left our contact information with his son so that the lawyer could contact Séptimo Sentido. So far we have not heard from him.

The Man in Nevada

Aldo Adrián Aguirre is a Guatemalan living in Las Vegas, Nevada. He was Honorary Vice-Consul of his country to that city from 2003 to 2014, under the jurisdiction of the consulate of Los Angeles, California. According to his profile on Linkedin, among his functions were to support the mobile consulates and interview Guatemalan detainees and prisoners in the area. In 2010 he also collaborated with the Mexican American Legal Defense and Education Fund (MAL  DEF), to promote Latino participation in the United States Census that year.

Aldo is not only a diplomat and a man concerned about the rights of his community in the US. Aldo Adrián Aguirre is also a businessman. He has held management positions in several companies in Nevada. One of them was Alianza Consulting Group, a limited liability company that listed him as its registrar and sole employee from 2005 to 2014 when he decided to dissolve the company. As he described it in Linkedin, the company focused “on meeting development assistance needs of emerging markets and developing countries by providing exceptional functional experience, regional experience, and a commitment to excellence.”

Alianza Consulting Group was the company in which he had dealings with Alba Petróleos of El Salvador. On 12 April 2011, under the auspices of this company, he became secretary and treasurer of the board of directors of Alba Refining Company, Latin America, SA, an offshore company registered in Panama, according to the documents of formation in the Panamanian public registry. Six days earlier he had started another company linked to Alba Petróleos, Petro Global International, this time in Nevada, his state of residence.

His name began to become more and more prominent in companies related Alba Petróleos in 2012. To date, Aldo Aguirre has had participation in the three companies in Nevada that form the aforementioned network, three “offshore” companies of Alba Petróleos in Panama, and three companies related to this one in El Salvador.

In the latter group are Economic Flights of Central America (VECA), an airline that made headlines in the Salvadoran press due to the irregularities of its closure in January of this year: after the cancellation of several flights in Costa Rica and El Salvador, investigations were launched in both countries. It ended its operations without giving its employees any severance and without their salaries for January of 2017. The company claimed that it had no funds to pay. The owner of 60% of its shares, El-Dia Corporation, based in Curacao, had received several loans from Alba Petróleos since 2013, which totaled more than $39 million in 2015, 10 million more than El-Día earmarked to finance VECA. Aldo Adrián Aguirre served as secretary of the company from September 2013 to May 2015.

Aldo currently resides between Las Vegas and Ahuachapán, in El Salvador. This can be seen in his migratory records in the country and in the photographs that he has uploaded in one of his Facebook accounts, in which he uses the name Mateo Madrid. This profile is linked to one of the numbers that the Guatemalan provided to the Port Authority of Panama (AMP) in El Salvador so that it could communicate with him within the framework of the process that the institution opened with respect to the Guazapa I ship owned by the “Offshore” of Alba Petróleos Guazapa, SA, stranded for 20 months in the Port of the Central American Union.

He is in charge of informing the Port Authority about the developments in the purchase of a spare part whose absence, in theory, makes it impossible for the ship to leave. Aldo is registered as a member of the administration and financial department of Guazapa, S.A.

That same number was dialed to consult him on the nature of the companies incorporated in Nevada. Also, to clarify something: how does a Guatemalan who resides in Las Vegas relate to a Salvadoran politician? These questions had to be answered by Aldo himself, who we tried to contact through several numbers, both in Panama and El Salvador. We also wrote an email to an address that was provided for the same purpose, but we did not receive a response.

The Distant Brother

While Jose Luis Merino fought the war under the pseudonym of Ramiro Vásquez, one of his brothers, Sigfredo Armando Merino Cabrera, migrated to the United States in search of a place to live in peace. That’s how he got his American citizenship. He has used his US passport to fill out paperwork, including the time when he was granted a power of attorney for the subsidiary of Alba Petróleos in Panama, APES INC., in 2010.

After the war, Sigfredo did not take long to return to El Salvador. And he did it to be the right hand of his brother, Jose Luis, in several businesses. Former commander Ramiro was the beneficiary of loans directed to help demobilized combatants to set up ventures.

Both were on the boards of several companies, which have not been active since the beginning of the new millennium, such as Business Technical Consultants, J. M., and Valores del Aire. In all, Sigfredo acted as sole proprietor and legal representative. The Merino brothers did not achieve the expected results.

Sigfredo’s commercial activities in the last decade were mainly focused on his participation in the company Coordinadora y Asesora de Proyectos (CAPSA), a solid waste treatment company contracted mainly by mayors under the rule of the Farabundo Martí National Liberation Front (FMLN), of which his brother Jose Luis was already one of its main leaders. He was involved with CAPSA from 2003 to 2006.

The fate of Sigfredo, as in the case of José Mauricio Cortez Avelar, changed in the present decade: he has been in important positions in at least eight companies that have received millions in loans from Alba Petróleos of El Salvador.

Séptimo Sentido contacted Sigfredo Merino via telephone yesterday. The businessman claimed it was the first time we tried to contact him that he did not know why his name appears in a Nevada company, Alba Petróleos Las Vegas. He maintained that he has no involvement.

“Anyone can show up simply because of identity theft … maybe someone made it up with the intent of damaging my image,” he said when he mentioned that it is his name that appears on the record. He said that he would speak more in a face-to-face interview, with documents on another day.

For some FMLN middle-ranking militants, speaking on condition of anonymity, that the brother of José Luis Merino has benefited so much from the money coming from Venezuela channeled by Alba Petróleos of El Salvador does not convince them: they do not understand how someone who did not fight the war can occupy, today, positions so important in the scheme of the financial arm of the party to given life by the guerrilla which so many of them sacrificed their youth.

José Luis Merino’s most intimate circle is transnational in scope and has even had activities in the very heart of the United States, the country that now has its finances in sight; waiting for the US Office of Asset Control (OFAC) to formalize an investigation and to determine if, in fact, crimes have been committed.

Yesterday afternoon, Sigfredo Merino was sought once more to explain that this work would be published today. He replied that after an independent investigation, he certified that the company’s registrar, Bassan Izzat Kalandos (whom he claims he does not know personally), used his name without his permission to form the company.

Sigfredo Merino sent to this magazine a photo of a letter, addressed to Yanet Cornejo, director of the legal department of Alba Petróleos of El Salvador, where Kalandos clarifies that he formed the company Alba Petróleos Las Vegas to develop future businesses in Nevada and to reserve that name. However, he decided to dissolve it shortly after, on February 19, 2013, after realizing how “sensitive” the brand was outside the United States and following the requests of his “Venezuelan contacts.”

In the following works of this series, we will reveal a case that points to money laundering and the negotiations behind an attempt of bribery. In both cases, José Luis Merino and the people described in this first text are involved.

Click here for original article in Spanish.

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