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Arrests in Honduran Healthcare Scandal That Killed Thousands, But Corruption Not Over

Despite the arrests of several prominent Hondurans in a massive healthcare scandal that took the lives of thousands of Honduran civilians the crisis still plagues the national healthcare system.

IHSS honduras healthcare scandal

protestors marching against the IHSS healthcare scandal

With the start of 2018, Honduran courts finally began to take the initial steps required to bring to justice those responsible for the horrific health care scandal that has plagued the country for years.

As more arrests are made and sentences are dispensed, the connections between all of the operating actors at both the government and business levels will become clearer. However, as of now, very few of the individuals involved have been sentenced for their crimes and many more have yet to be charged.

The scandal involves prominent Honduran politicians, business owners, and banks, including el Banco Ficohsa, el Banco Atlantida and el Banco Continental.

The scandal originates in the Honduran Institute of Social Security (IHSS), the government organization that provides healthcare to the majority of Honduran citizens. As a result of funds diverted from IHSS into the pockets of wealthy politicians and business leaders, thousands of Hondurans have died as a result of receiving adulterated medication and improper treatment at IHSS centers.

The aforementioned banks are used by business elites and their allies in the government as a conduit for these diverted funds, but many experts believe that these banks play a more active role in the conspiracy.

“The convoluted lines of credit between IHSS and business owners, the past collusion of the banking system in irregular and illegal deals with various businesses, and the great degree of centrality in the network of corruption indicate that various banks connected to Honduran elites and transnational corporations have knowingly formed a large part of the framework of corruption between IHSS and outside economic interests,” states a 2016 study looking at networks of corruption in Honduras, conducted by the Heinrich Boll Foundation.

IHSS healthcare scandal funneled money through fake businesses

With the aid of these financial institutions, Honduran officials have been able to embezzle massive amounts of money out of IHSS using old-fashioned money laundering as well as the creation of fake business fronts.

Former director of the IHSS, Mario Zelaya, along with others, are accused of creating “empresas de maletín” (briefcase businesses) in order to funnel money out of IHSS. These fake businesses were typically set up as medical supply companies, and used a system of blank checks and falsified product orders in order to funnel money out of IHSS. One of these “briefcase businesses” was Suministros Médicos, whose legal representative, Cinthia Melisa Mariela Velásquez, testified that she was instructed to create the business by Zelaya and his wife.

Zelaya was recently arrested and found guilty of crimes including money laundering and fraud in concurrence with abuse of power, but many of his peers have yet to face legal prosecution. Further, though Zelaya and other defendants have been found guilty of money laundering and fraud offenses, many of the other charges were dropped, including misappropriation of public funds.

Attorney General of Honduras warns that not all corrupt elements are gone

As a result of his wrongdoing, Zelaya received four prison sentences adding up to a minimum of 25 years. However, Óscar Chinchilla, Honduras’ Attorney General, cautioned the public from viewing the arrest of Zelaya as proof that all corrupt elements have been apprehended and removed from roles of power, indicating that the Secretary of Security, along with others, must respond to the fact that many of the principal actors in the scandal are still in positions to benefit economically and politically from the scandal.

“There will be more legal action, and more people will be brought to justice. The corrupt framework of the IHSS has dimensions that the public can’t even imagine,” Chinchilla announced to the public that.

This past January, 46 individuals implicated in the embezzlement of funds from IHSS were brought to court, however only nine were found guilty, indicating the inability of the Honduran courts to objectively dispense justice to individuals who still have a huge amount of control over Honduran politics as a result of family and business connections.

Another prominent individual in the case who has stood trial is Carlos Gustavo Corrales Regalado. He is accused of laundering almost $105,725 out of IHSS through the manufacturing enterprise AD Astra, and has been a fugitive of justice since 2015. He is currently being detained in the Penitenciaría Nacional de Támara on the northern edge of the Honduras capital city of Tegucigalpa, but has yet to be formally sentenced for his crimes against the people of Honduras.

For a country whose healthcare services are lacking in funds as is, the amount of money that has been diverted out of IHSS is staggering. On January 29, a national judge stated that the amount embezzlement orchestrated by the corrupt politicians and business owners reached over $12 million. This money was then used to fund the lavish lifestyles of the individuals involved in perpetrating the theft, and money that was meant to provide healthcare for the people of Honduras was instead used to pay for luxurious vacations, honeymoons and even swinger parties with Costa Rican models.

Though the wheels of justice are finally beginning to turn in Honduras, this is only the beginning of a slow process hampered by the convoluted web of corruption woven between the wealthy families who control Honduras at all levels of politics, business and the media. Until these connections are thoroughly examined and all levels of IHSS are cleansed of corrupt influence, many fear the business elite will continue to protect economic interests at the expense of the Honduran people.


Honduras Corruption & Healthcare Catastrophe, Thousands Dying From Adulterated Medicine


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