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Wednesday, Jun 20, 2012 6:15 PM UTC

Cuba defends its banks amid Medicare fraud case

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Topics: From the Wires,

HAVANA (AP) — A Cuban official said Wednesday that the country has strict controls to avoid money laundering and works closely with banks to detect and deter fraudulent transactions, responding to allegations by U.S. prosecutors that millions of dollars defrauded from Medicare were routed to the island’s financial system.

The statement from Johana Tablada, deputy director for U.S. affairs at the Cuban Foreign Ministry, came in response to a request from The Associated Press after a Cuban-American man in South Florida was ordered held in the case this week.

“Foreign commercial banks that maintain accounts in Cuban banks are obliged to operate in strict compliance with international and Cuban rules and must guarantee the reliability of their transactions and the correct use of their accounts,” read the statement emailed to the AP on Wednesday.

Tablada did not directly address whether any money from the alleged Medicare scam has been deposited in Cuban banks. She said that while Cuba works with foreign banks to fight money laundering, Washington’s 50-year-old economic embargo prevents it from doing the same with American banks.

“It is because of the U.S. government and its policy of blockade” — the term Cuba uses to refer to the embargo — “that this kind of cooperation does not exist with U.S. institutions.”

On Monday, U.S. prosecutors filed a motion accusing Oscar Sanchez, a 46-year-old Cuban-born U.S. citizen of conspiring to send proceeds from the alleged Medicare fraud to shell companies in Canada, then to a bank in Trinidad and ultimately to Cuba.

Sanchez was ordered to be held in custody pending arraignment, scheduled for Friday. He could face 13 years if convicted. Sanchez’s attorney, Peter Raben, declined to comment on the charges.

The following day, prosecutors clarified that Cuba is not suspected of involvement.

“There is no allegation and we have no evidence that the Cuban government is involved in this case,” said Alicia O. Valle, special counsel to the U.S. Attorney.

But Havana nonetheless bristled at any suggestion it might be complicit. Some in the Cuban-American exile community have alleged that the Cuban government might have been taking a cut.

“It is not Cuba but the United States that is the world’s main country for money laundering,” Tablada said.

The case against Sanchez is part of a broader investigation of an alleged Medicare scam involving 70 Florida companies and more than $70 million of fraudulent billings. Much of the money was subsequently sent abroad, though this is the first example where proceeds are alleged to have ended up in Cuba.

The U.S. government’s Medicare program provides health care to elderly and disabled Americans.

Also Wednesday, Cuba’s Foreign Ministry criticized the June 12 announcement that Dutch bank ING Bank NV would pay a $619 million settlement to end probes of allegations that between 2006 and 2007, it secretly funneled billions of dollars through the U.S. financial system on behalf of Cuban and Iranian concerns in violation of the U.S. embargo.

In a statement, the Foreign Ministry said the sanctions “make a mockery of the worldwide demand for the United States to put an end to the blockade against Cuba.”

It also criticized the director of the Treasury Department’s Office of Foreign Assets Control, which is tasked with enforcing the embargo.

“Adam Szubin used threatening and disrespectful language and once again demonstrated the extraterritorial and interventionist U.S. policy,” the statement said.

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