NEW YORK (Reuters) - NML Capital Ltd, a creditor suing Argentina in the U.S. courts for full payment on defaulted debt, subpoenaed 18 banks last week in an effort to track down $65 million in what it says is embezzled Argentine money laundered through the United States.
Lead attorney for NML, Robert Cohen of Dechert, said in a conference call on Thursday that the list of banks, all of which have at least a presence in the United States, has not been made public.
Cohen told reporters that NML also subpoenaed what he called 123 shell companies registered in Nevada for discovery of information. These were used by Lazaro Baez, a confidant of current President Cristina Fernandez and her late husband and former President Nestor Kirchner, to launder money, the lawsuit alleges.
The lawsuit alleges Baez laundered the money through as many as 150 Nevada corporations.
“We have also served subpoenas on 18 banks in an effort to trace the funds that were, we believe, embezzled through those companies and we expect to continue to gather useful information to lead to yet more sources of information and funds,” he said.
Argentine officials say the lawsuit is just part of efforts by NML, and other creditors they term “vulture funds,” to undermine the Kirchner government.
With victories in the U.S. courts against Buenos Aires that amount to billions in uncollected legal claims, NML has scoured the world for Argentina’s sovereign assets that it can try to attach, or seize, in order to satisfy the judgments won in its favour.
Cohen has said NML is owed in total a “little bit less than $3 billion” by Argentina when taking into account all of the cases it has won against the Latin American nation in the U.S. courts stemming from its 2002 sovereign default. [ID:nL1N0R50KP]
NML and other so-called holdout investors have tried to attach assets held in U.S. financial institutions and even held an Argentine naval training vessel in an African port before an international court ordered its release.
On Aug. 11 a federal magistrate judge in Nevada signed an order compelling the representatives of the companies to work with NML and come up with a joint status report on where the discovery process has led by Sept. 12.
This decision follows a June U.S. Supreme Court ruling that said NML could enforce subpoenas against banks in a search for Argentina’s non-U.S. assets.[ID: nL2N0OX0P9]
“The 123 shell companies that we are pursuing, we believe, are just the tip of a very large iceberg,” Cohen told reporters via a conference call organised by the American Task Force Argentina, a lobby firm supported in part by the holdouts.
NML cites an investigation by former Argentine prosecutor Jose Maria Compagnoli asserting that Baez along with the Kirchners “allegedly embezzled millions of pesos from public-infrastructure projects” and laundered the funds through Panama and other shell companies.
Compagnoli was removed from office after his report was submitted to Argentina’s National Supreme Court of Justice.
Reporting By Daniel Bases; editing by Andrew Hay