Marc Harris, Offshore Boy Blunder

Marc M. Harris is serving 17 years at a federal medical center outside Fort Worth for tax fraud and money laundering in a scheme to bring in prohibited Freon into the United States. Aside from perhaps several dozen investors who wanted to avoid the U.S. tax laws and got burned in the process, The Marc Harris Organization isn´t quite known among too many international observers. However, this North Carolina native, now 40, was the catalyst of a diplomatic embroilment between the U.S. government and Panamanian authorities who were suspected of protecting him.

In June 2003, Harris was detained at an intersection in Managua, Nicaragua while he and his Panamanian-born wife were on their way to an immigration hearing. He moved to Nicaragua from Panama the year before reportedly after things got too hot for him both legally and politically. He was turned over to U.S. Marshals who were in the country waiting for him, shackled and placed on board a Homeland Security plane bound for Miami. Upon his arrival, the U.S. Attorney´s Office for the Southern District of Florida unsealed a 13-count indictment which charged Harris and co-conspirators Aurelio and Joseph Vigna with evading to pay $6.2 milllion in excise taxes between 1993-94 to import an ozone-depleting refrigerant chemical known by its Dupont name Freon.

Harris´ lawyers unsuccessfully argued that he was kidnapped in violation of international law without due process, much like how U.S. authorities honed into Honduras in 1988 and plucked drug kingpin Juan Ramón Matos Ballesteros from his home and brought him to Los Angeles to face murder and narcotics charges. Harris married a Panamanian but it isn´t clear whether he renounced his U.S. citizenship after fleeing Florida in 1989.

Just weeks before his detention and extradition, I made contact with Harris through a series of emails to his office in Nicaragua. I was investigating whether some high-level Puerto Rican government officials in the then-administration of Gov. Pedro Rosselló had sought his help to squander public money in offshore accounts. In the 1990s, Harris was a partner in the suspcious offshore financial advisory group Trust Services, Ltd. which held an office next to the Puerto Rican Trade Office on Balboa Avenue in downtown Panama City. Arturo Paz Guzmán, a public housing official under Gov. Rosselló, had been convicted for money laundering and served a 12-month sentence. According to federal prosecutors, he used Trust Services to launder public money. After faxing a picture of Paz Guzmán, who now lives in Miami, Harris said he remembered him as a regular client.

These former Rosselló administration officials were all well to do businessmen who were later convicted for or implicated in various corruption kickback-for-contracts and money laundering schemes (see Oct. 13 post). But what made the news story more sexy was that the head of the Puerto Rico Trade Office, Walter Laffitte, is the son of a federal judge for the district of Puerto Rico!

Harris told me that he never had personal dealings with Walter Laffitte but that his clients would visit the Trade delegation then pop over to the Trust Services offices. According to the IRS, Harris bilked dozens of clients of millions of dollars with his offshore investment promises.

When Harris was brought before a Miami federal judge to face indictment charges, federal prosecutors said that they had several open investigations into Harris´dealings, including how he allegedly helped Americans evade paying U.S. taxes and whether he reportedly lent Peru´s jailed spymaster Vladimir Montesinos a plane to escape capture. Harris was allegedly protected by the government of then-Panamanian President Ernesto Pérez Balladares, a former Notre Dame University roommate of Puerto Rico´s controversial Rosselló. Following his arrest, Puerto Rican investigators traveled to Managua to sift through Harris´ personal and financial records. Their findings were never publicly disclosed.

Harris, who is claiming pauper status, is appealing his 17 year prison sentence, including the imposition of a $20 million fine. If this once offshore financial guru, who graduated with honors from the University of North Carolina Chapel Hill, decides to cooperate with the U.S. government in exchange for a lighter sentence, he can probably offer gleeming if not embarassing information about some high-profile international personalities. But then again, it may not be in the best interest for the U.S. government to make hay of what Harris has to offer.