American businessman Louis Pargiolas Castaño made a good impression when he moved to Colombia 10 years ago. He spoke fluent English and very good Spanish, and he boasted of connections in the international financial world, including real estate mogul Donald Trump.
The U.S. Immigration and Customs Enforcement agency had a different view of Pargiolas. One ICE agent tracked him for years, and a U.S. federal court in Miami eventually convicted the businessman of investing in shipments of Colombian cocaine.
His Trump connection was made public when Pargiolas appeared in court during a preliminary hearing following his arrest in April 2009. Defense attorney Norman Moscowitz declared that he had invested in the Trump Ocean Club and been involved in the project “for several years.” The lawyer also noted that Pargiolas had invested $5 million in the Hard Rock Hotel in Panama.
All of Pargiolas' public biographies, still available online, highlight his participation in the Trump Ocean Club, the Trump Organization's flagship project in Panama, as evidence of his “vast experience developing national and international businesses.”
One of the biographies says Pargiolas “has held executive positions in connection with the development of major projects” since 2002 and mentions the Trump Ocean Club, the Hard Rock Hotel and the El Retiro shopping mall in Bogota, Colombia.
Documents obtained by Univision show Pargiolas, the son of an Italian American father and Colombian mother, was one of several investors in the company that developed the Trump Ocean Club.
Trump lawyers who have responded to Univision's questions in the past did not reply to questions about this story. The president, answering similar reports published by USA Today, said that he's not responsible for investors because he merely franchises his name for projects. The Panama project also required Trump to operate the club.
Money laundering expert Alberto Avila said that while Trump is right to deny legal responsibility, he should be more careful about his investors “because at the end of the day it's his name or his brand that is at play. … His lawyers at least should be telling him how to be careful.”
Pargiolas led a busy social life in Bogota. As vice president of The American Society, which promotes U.S.-Colombian understanding, from 2006 to 2009, he rubbed elbows with officials of the U.S. embassy in the Colombian capital.
Colombian businessman Rodrigo Serna Londoño initially joined Pargiolas in the company that was to develop the Trump Ocean Club. He said Pargiolas was initially “considered to be an impeccable businessman, up and coming and respected in Colombia as well as the United States, with contacts at the top levels of both countries.” But he told Univision Investiga that his company cut off all links with Pargiolas after learning of his legal problems in the U.S.
Serna and his brother, Carlos Alberto, persuaded Trump to invest in Panama in 2005 after the mogul's daughter, Ivanka, showed a lack of enthusiasm for the project. The Colombian newspaper El Espectador reported the brothers went to New York and persuaded Trump of “the virtues of Panamanian real estate.”
The newspaper added that Trump named Ivanka and his oldest son, Donald, to head the negotiations, which lasted five months. Trump was to lend his name to the project and administer the hotel and casino, while the Colombians were to administer the construction project, design and sales.
Neither Trump nor any members of his family, and none of his companies, are members of the Trump Ocean Club, Rodrigo Serna said.
The ownership structure of the Trump Club is complicated. The condo and hotel complex, which cost $300 million, was developed by Newland International Properties Corp., which is in turn owned by the Panama Ocean Point Development Corp., both based in Panama. Ocean Point is owned by Arias Serna y Saravia (SAS) and Espacios Urbanos, both Colombian firms, which invested 30 percent of the total through a Costa Rican firm, Upper Deck Properties. Serna said the remaining 70 percent came from Panama businessman Roger Khafif.
The Colombian companies needed to find more investors, Serna said, and that's where Pargiolas came into the picture. During one of his U.S. court sessions, his lawyer said he also helped to sell Trump Ocean Club properties to others, which required that he travel to Colombia, Venezuela, Spain and Switzerland.
The Trump venture appeared to have a fatal attraction for shady characters.
Khafif partnered with Alexandré Ventura Nogueira, a Brazilian businessman who was under investigation in Spain for money laundering and wound up facing fraud lawsuits from several buyers of Ocean Club apartments. Ventura was partners with David Murcia, a Colombian who was arrested in Panama in 2008, deported to Colombia and then extradited to the United States, where he was convicted of laundering drug money.
The double life
The problems for Pargiolas, who was born in Chicago, started when he met convicted drug trafficker Gabriel Afanador Solano in 2002. Pargiolas had been selling oil drilling equipment to Colombian companies and was introduced to Afanador by Gustavo Martelo Smith, another convicted drug trafficker.
ICE agent Christopher Ciccione declared that when Pargiolas found out Afanador was a drug trafficker, he offered to make a $110,000 investment in one drug shipment. The businessman paid through the Remy Capital company and his account in the Colpatria Bank in the Cayman Islands. The money went into an Afanador account in the First Union Bank.
Afanador, then living in Aventura, Florida, came to the attention of the U.S. Drug Enforcement Administration (DEA) some weeks later, after an informant identified him as a powerful trafficker who sent drug-laden ships from the Colombian port of Cartagena to Jamaica and from there to Mexico, where his partners smuggled the drugs into the United States.
Ciccione then staged a sting operation with the help of Carl Hedrick, a ship's captain who met with Afanador to coordinate a shipment of about 600 kilos of cocaine. ICE learned that a Chicago investor of Italian descent would be involved. They soon learned it was Pargiolas. His phone number was in Afanador's cell phone.
Federal agents followed Pargiolas when he landed in Miami aboard an American Airlines flight on Feb. 4, 2003. He rented a Jaguar and drove to Afanador's building in Aventura.
He went back and played again
Colombian officials intercepted the vessel Valentine with 480 kilos of cocaine on board, hidden in sacks of coffee. They also found telephone numbers and radio frequencies for Afanador.
Pressured by Pargiolas, Afanador returned $15,000 to his account in the Burlington Bank of Chicago. But the partnership did not stop. Afanador offered Pargiolas to invest the balance of his money in a second drug shipment that would leave Colombia in September.
The drug shipment was again intercepted, this time 120 miles south of Jamaica. Afanador was arrested in Colombia, and U.S. prosecutors hit about 20 members of his organization with drug trafficking and other charges.
Afanador pleaded guilty and identified Pargiolas as an accomplice. He said the businessman had invested a total of $125,000 in the cocaine shipments. Police searching Afanador's apartment in the Colombian city of Medellin found electronic money transfers with Pargiolas' name.
Marco Gomez Hurtado, accused in the second drug shipment, declared that he worked as a bodyguard for Pargiolas in Bogota. He added that the businessman at one point gave $600,000 to Martelo Smith, also accused in the shipment, to invest in a cocaine shipment.
It's not clear why ICE and DEA then waited five years to arrest Pargiolas. The delay led his defense lawyers to ask the judge to drop the charges because of the statute of limitations and the lost opportunities to question witnesses.
Prosecutors argued that the delay was the result of the ongoing investigations of co-conspirators in the same case, William Alvarado Saavedra and Ulis Howard. They added the lead prosecutor Joseph Cooley then took time off to care for his sick mother, and was later assigned to Afghanistan.
In the meantime, Pargiolas continued with his legal businesses. Rodrigo Serna said that after Punta Pacifica and Upper Deck signed the contract for the Trump project, Pargiolas introduced them to “international companies with top-level standing in the business world.” He added that Pargiolas also made the contacts that led to the hiring of “one of the best-known law firms in the United States.”
An alleged extortion
Pargiolas was arrested in April of 2009. At this arraignment, his lawyer claimed that the money sent to Afanador was not for a drug shipment but rather to pay off an extortion demand by the 52nd Front of the guerrilla Revolutionary Armed Forces of Colombia (FARC).
Prosecutors replied later that the supposed extortion letter submitted by Pargiolas was a fraud, and added that the businessman had also lied when he used a passport indicating that he had been born in Colombia when he opened an account at the Atlantic Bank in Miami.
Pargiolas rejected a Univision request for an interview through his attorney, Robin Kaplan.
Two weeks after Pargiolas was sentenced, Trump's son Donald met with Colombian President Juan Manuel Santos at the presidential palace in Bogota to discuss the Trump Organization's development plans for the country. He was accompanied by Trump's representative for Latin America, Camilo Benedetti.
Benedetti, a New York investment banker, was under a criminal investigation in Colombia at the time for an alleged fraud in a government oil royalties fund. Univision asked the National Prosecutor's office in Bogota about the status of the Benedetti case and was told it could not find the case documents. Benedetti refused to speak with Univision.
The Trump project in Panama turned into a huge headache for the investors. In April of 2013, just two years after the Ocean Club was inaugurated, Newland International Properties Corp. filed for bankruptcy in a federal court in New York City.
Several apartment owners have complained that the company chose to submit the case to a foreign court and never informed them of its decision.
One of the most controversial aspects of the case was the payment agreement the company had reached with the Trump Organization for using the real estate mogul's name. Newland's attorney fought against revealing how the payments that were made and requested the information be sealed. A clearly irritated Judge Martin Glenn said there was not legal basis for sealing that information.
“Go to Panama. If you want to do your deals in secret, go and do it in Panama. Don't do it in my court,” Glenn told attorney Eric Wise during a May 17 hearing, according to a transcript obtained by Univision.
Glenn again asked about the issue at a later court session, apparently causing the Newland attorneys to wince. “It seems my questions are giving them indigestion,” the judge said.