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Jan 17, 2017

The End of Puerto Azul; Chief Developer Arrested in Italy for Massive Fraud

The controversial Puerto Azul project was a scam from the get go. It was launched at the 2014 Cannes Film Festival in France, where Ministers Manuel Heredia Junior and Erwin Contreras travelled for the grand event along with other high profile personalities.  It came crashing down this morning when, financial police in Varese, Northern Italy, arrested seven people as part of an investigation into a criminal association aimed at international fraud, money laundering and illegal banking and finance transactions. Over eighteen million Euros, or thirty-eight point seven million Belize dollars, in property and financial assets were seized. Who was the target? Italian national Domenico Giannini. He is known as one of the chief developers in the Puerto Azul eight-star hotel and resort project, in the Lighthouse Reef Atoll off Belize. A second investor is said to be residing in the Dominican Republic and holding dual U.S. and Italian citizenship. Giannini is accused of bilking over two hundred private savers and investors into investing as much as twenty million Euros, or over forty-three million Belize dollars, on the Puerto Azul project. Aaron Humes revisits the history of the luxury project and speaks to the co-managers of the area where it was planned.

 

Aaron Humes, Reporting

The news coming out of northern Italy and Switzerland today can be summed up in an old adage: “If something seems too good to be true, it probably is.” Domenico Giannini, one of the leading developers in the Puerto Azul project, a planned “eight-star” luxury hotel and resort on the Northern Two and Sandbore Cayes at Lighthouse Reef Atoll, has been arrested by financial police in the town of Varese, northern Italy, on suspicion of wide-scale fraud involving over two hundred private investors, including such big names as John Travolta and Andrea Bocelli. Six others have also been arrested, and officers confiscated over eighteen million Euros in assets from their offices in Italy and Switzerland. Fabio La Rosa was the face of the project in Belize and the Dominican Republic; however, we cannot confirm whether he was one of those arrested today.

The road to the apparent downfall of the project begins at its beginning: the 2014 Cannes Film Festival, where Minister of Tourism Manuel Heredia Junior, Minister for Investment Erwin Contreras, and Special Envoy for Women and Children Kim Simplis-Barrow were among a host of Belizean luminaries attending the launch of the project. Speaking three weeks later, the Tourism Minister went after those he said were “prematurely” slating the project rather than actively consulting with the Government.

 

Manuel Heredia

Manuel Heredia, Minister of Tourism [File: July 23rd, 2014]

“At this point I believe that even myself, I cannot tell you if the project will be a reality or not but what I can tell you is that even, whatever happens, at the end of the day I think that these people have given so much promotion to Belize that it’s a win-win thing.  Belize will be… If you look around today, this is one of the best Julies ever in the history of this country.  It is because of publicity that this B.T.B., our stakeholders and people like this that advertise Belize so much, that is making this possible.  But let us sit down and [have] consultations, but to be second guessing about what will happen I think is premature.”

 

But in April of 2015, the mortgagor of Northern Two Cayes, American John Mills, threw a cat among the mice when he pointed out that the land had not been bought – and that there is a disconnect in the grandiose plans the developers were suggesting versus the reality on the ground.

 

John Mills

John Mills, Mortgagor, Northern Two Cayes [File: April 16th, 2015]

“You can understand that when I saw, I read the Belize newspaper and I saw a couple of weeks ago that they had said that the islands had been sold, that was news to me because I have a lien on the property.  That has not been the case; Puerto Azul has not closed on the island.  They signed a contract to purchase Northern Two Cayes in March 2013 and the first payment was to be made in March of 2014 and they did not make that.  The second payment was to be made in March of 2015 and they did not make that. I had a really good conversation with Fabio La Rosa who’s one of the principals from Puerto Azul and I would characterize the conversation as both alarming and encouraging.  I think that Puerto Azul has a true belief that they can do a sustainable project out there.  They truly have, I think they are well intended in terms of what they are trying to do.  On the other hand, I found it alarming because I think there is a disconnect in terms of what is environmentally feasible and also economically feasible out there versus what they’ve talked about doing.”

 

And three months after that, Heredia admitted that the project was pretty much dead in the water. Which brings us to today, a full year and a half later, and the realization that it was all a dream, a pie in the sky that will likely never be fulfilled. Belize Audubon Society is the co-manager of the two protected areas in the Lighthouse Reef Atoll, the Blue Hole Natural Monument and Half Moon Caye Wildlife Sanctuary. Its executive director, Amanda Burgos, told News Five this afternoon that despite an apparent split in the partnership, the developers still seemed to be trying to keep the deception going.

 

Amanda Burgos

Amanda Burgos, Executive Director, Belize Audubon Society

“We had actually learnt early last year that the Puerto Azul company had actually had a separation of partners – the business partners were actually no longer in business together. So we had figured from then that it wouldn’t get off the ground.”

 

Reporter

“And yet we understand that there were still efforts to sell this place – in the sense that there was activity and development going on there, that it would be completed as of the end of last year?”

 

Amanda Burgos

“There had been an Italian finance magazine that I had come across [in] late 2015, actually, where they were proposing and selling condos on the island and they were proposing that the development should have been done by December 2016. So if that was a sales pitch, as it seemed to have been to me, then they were selling assets and properties that they had never even gotten permission to take off of the ground.”

 

And so that may be that. But what has Belize learned? According to Burgos, we need a better ability to weed out true developers from unvarnished speculators – investors who will treasure and promote The Jewel’s natural beauty.

 

Amanda Burgos

“I think there needs to be due diligence; I think we need to do background checks on developers and there should be processes for speculators, basically; of how to reduce the number of businesses and people who come under the guise of developers who are actually speculators. The anticipation of any owner is that they can develop, but I think it has to be sound development; it has to be something akin to the values of what is out there. You are going to the ends of Belize, basically, and that is the experience that people are going for; and we would hope that whoever comes along as a developer can keep the integrity of the site and the islands and really promote the nature that is out there at the atoll.”

 

Aaron Humes reporting for News Five.

 

According to the media reports, the persons who lost monies ranged from wealthy entrepreneurs reinvesting monies originating from tax evasion to legitimate savings of elderly persons. In the latter case, a ninety-year-old lost seven hundred thousand Euros when his signature was falsely affixed to the investment contract and bank cheque. The monies were eventually stored in Swiss accounts.

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2 Responses for “The End of Puerto Azul; Chief Developer Arrested in Italy for Massive Fraud”

  1. spike says:

    I like the fact that the culprits were arrested. The same should happen here in Belize. If the culprits here went to jail, I doubt there would be much land title fraud. And, I’ll bet if land title fraud carried the DEATH PENALTY, there would be even less fraud. So, everyone in favor of the DEATH PENALTY for a land title fraudster here in Belize, please raise your hand.

  2. Mike G says:

    Please don’t stop the carnival! Greedy choke puppy.

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