While some fingers in Argentina were pointed at Paul Singer, the hedge fund manager demanding $1.5 billion in judgments over Argentina’s defaulted bonds, it seems that the country could be as much a victim of homegrown fraud as creditors outside of Argentina. The country recently defaulted for the second time in 13 years, tipping off a major economic crisis. Paul Singer was given the green light by a Las Vegas judge to look into assets in Nevada hidden by businessman Larazo Baez. It isn’t just Singer Lazaro might have cheated, but it is alleged that he has embezzled as much as $65 million from government contracts and concealing it in “shell” organizations abroad.
This issue isn’t new; Singer has been fighting for 10 years to recover the funds from Baez and others involved. Some bitterness against Argentina was expressed over the decision from a federal judge that Singer must be paid first before restructuring of debt can take place.
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Judge Cam Ferenbach in Reno said his decision in Singer’s favor was based on the fact that “there is no doubt that the 123 companies are shell organizations. Similarly, there is no doubt that shell corporations are routinely formed to commit fraud.” Singer claims that Baez and the current administration are corrupt, and Baez was allowed and even aided to pursue his criminal activities with the help of President Christina Fernandez de Kirchner and the former Argentinian president, Nestor Kirchner. Last year, Argentinian authorities found that Baez placed $65 million in shell companies in Nevada.