Suntracs loses custody of Red Frog farms; they’re worth nearly 10 times the “loan,” according to prosecutors.

The 14 properties located in the Red Frog residential and tourist complex on Bastimentos Island, which were under the control of the Single Union of Construction Workers (Suntracs) and its cooperative, will be made available to the Ministry of Economy and Finance (MEF).

The decision was made last Monday, May 26, by prosecutor Isis Soto , who ordered the provisional seizure of the properties as part of the investigation being conducted by the Second Prosecutor’s Office against Organized Crime against the union, the cooperative, and its leadership for the alleged commission of the crimes of aggravated fraud, money laundering, illicit association, document forgery, and malfeasance.

The 14 properties total 33,712 square meters in area and were donated by Pillar Construction, SA (which changed its name to Bastimentos Holding ) to compensate 412 workers who participated in a strike—declared legal by the Ministry of Labor—that took place from February 5, 2007 to October 14, 2008.

On August 30, 2011, the Fifth Section Labor Court of Changuinola ordered Pillar Construction to pay $5.8 million in lost wages and almost $1.2 million in damages.

A year later, unable to make a cash payment, the company reached an out-of-court settlement to settle the debt through the transfer of some properties, which at the time were reportedly worth $3 million. In this negotiation, the 412 workers were represented by Suntracs, even though some of the beneficiaries were not even union members.

For this reason, when the properties were transferred, they were registered in the name of Suntracs.

These properties, which supposedly belong to the 412 Red Frog workers, were used as collateral for a loan the union requested from its own cooperative (now closed by authorities), called Cooperativa de Servicios Múltiples Suntracs . The loan was for $3 million, even though the land had appreciated in value over eight years. In fact, the prosecutor’s office has an appraisal conducted by engineer Pablo Smith of the company Servicios Profesionales de Avalúos y Construcción , which estimates the market value of the land at $28.6 million.

Unable to recover what was owed to them, the 412 “true owners” of the properties filed a criminal complaint on August 22, 2022. These are the facts that Prosecutor Soto is now investigating.

The plaintiffs allege that no one at Suntracs consulted them about the signing of the 2012 settlement or the alleged loan agreement with the cooperative in 2022.

In fact, they claim that on May 29, 2022, the union convened an informational meeting in Almirante, where—according to them—at least half of the attendees were unrelated to the process. However, many of the workers compensated by Red Frog were denied entry. They later learned that, at that meeting, Jaime Caballero , Secretary of International Affairs for Suntracs, announced that the properties would be mortgaged.

Caballero is in preventive detention as part of this investigation, as is Genaro López , former general secretary of Suntracs and one of the signatories of the out-of-court settlement with Pillar Construction.

For his part, Saúl Méndez , the union’s current general secretary, has requested asylum in Bolivia and remains in that country’s embassy in Panama, awaiting a response.

Monica Palm

Editorial Chief.