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US Indictment of Powerful Honduran Family for Money Laundering a ‘Game Changer’

Indictment of Rosenthal family members sends message to Honduran elite that the days of de facto immunity may be over.
Photo by Fernando Antonio/AP

Untouchable no more? The influential Honduran businessman Yani Rosenthal took an audibly deep breath as he launched into his defense on Honduran TV.

"It is false and it is unjust," he said in the televised phone interview to respond to the news that a US court had indicted three members of his family for laundering drug money.

"They [the US authorities] have weapons, I would say atomic weapons, that kill people and their companies without defense," added Rosenthal, pictured above.

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To be rich and politically powerful in Honduras has traditionally come with de facto immunity even from the threat of prosecution. This week's indictment of the Rosenthals suggests that rule is now in doubt.

"It's a game changer," Steven Dudley, of the website Insight Crime, told VICE News. "It is a clear message. These guys are symbols of who the elite are in Honduras."

The indictment names Yani Rosenthal alongside his father Jaime Rosenthal, and his cousin Yankel Rosenthal, as well as Andrés Acosta, a lawyer from their main business conglomerate, Grupo Continental.

Acosta and Yankel Rosenthal were arrested after landing in Miami on Tuesday and taken before a US federal judge on Wednesday. The other two Rosenthals remain free in Honduras mounting their defense. There's no hint yet of a possible extradition request.

The US Treasury Department has also included several of the defendants' many companies on the lists it keeps that ban American companies from doing business with alleged drug traffickers.

The family's interests range from a bank to a newspaper. They also own a meat packing company, cement factory, real estate holdings, and a telecommunications firm. Yankel Rosenthal is the president of the professional Honduran soccer team Marathon.

The family also happens to be steeped in politics.

Jaime is a former vice president, and ran several unsuccessful presidential campaigns. Yani sought to be a presidential candidate in the last election and has served as a minister. Yankel served in President Juan Orlando Hernández's cabinet as investment minister until leaving the position without explanation last June.

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"It is sort of like indicting the Rockefellers of Honduras," said Dudley.

The indictment, originating in the Southern District of New York, does not give details of the case behind the charges, but the Rosenthals have admitted on several occasions to links with businesses owned by the Rivera Maradiaga family that allegedly headed a Honduran-based drug trafficking organization known as the Cachiros.

"There are two links," Yani Rosenthal said in the TV interview. One, he said, involved innocently buying meat for the family's meatpacker from the Rivera Maradiagas, who started off in the cattle business. The Rosenthal-owned bank also gave them loans, he said, insisting they were always repaid with checks, rather than cash.

"The 11,000 employees of our companies are witnesses to the fact that we have done nothing wrong," Rosenthal said. "We have never been accused of laundering money before, let alone being drug traffickers. Not even during election campaigns when all the defects come out."

The US authorities turned a spotlight on the Cachiros in 2013, alleging the Honduras-based group played an important role in transporting drugs between Colombian and Mexican cartels.

Javier and Devis Rivera Maradiaga, the two brothers believed to lead the organization, surrendered to US authorities in January this year. It seems likely their case, which is also based in New York, has at least fed into the accusations against the Rosenthals.

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Related: The Corruption Crackdown in Guatemala Is Making Mexico Jealous

The indictment of the Rosenthals stands out not just in Honduras, but in the whole of the region where traditional US anti-narcotics strategy has focused on operations to take down cartel capos or wipe out drug plantations.

Growing criticism in recent years has blamed this limited vision for fueling violence at the same time as it has largely failed to halt the flow of narcotics to the north. Some analysts argue that any strategy is doomed unless it also tackles the political corruption and economic complicity that gives traffickers the space to operate.

This is exactly the message the Rosenthal indictment seems designed to send, Dudley said. "It's unprecedented for any law enforcement agency to go after elites of this stature in economic, political, and social life of a country," he said

The case also comes at a time of persistent protests in Honduras triggered by outrage over a welfare scandal, but infused with wider frustration and anger at the inaction over deep-rooted corruption.

The protests paved the way for last month's announcement of the imminent creation of a special commission to investigate graft in Honduras sponsored by the Organization of American States.

The idea was inspired by a UN-backed body in Guatemala that played a key role in pursuing the corruption case that last month lead to the resignation and imprisonment of President Otto Perez Molina.

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Dudley said he believes the US indictment of the Rosenthals falls squarely within these new models of international intervention focused on once untouchable elites in the region.

"I want to see what the president of Honduras is going to say publicly," Dudley added. "Are they going to put them [the Rosenthals] out to the wolves or are they going to rally around them."

The president, so far, has said nothing.

Related: The Man Who Killed Miss Honduras Visited Her Family In the Days Before His Arrest

Follow Jo Tuckman on Twitter: @jotuckman