Inquiry Into Brothers' Outsourcing Firm Stirs High Political Circles in Mexico
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TUXTLA GUTIÉRREZ, Mexico -- In the 1990s, they helped their parents run a small family food stand in front of a bus terminal in southern Mexico. Today, the Ãlvarez Puga brothers, Alejandro and Victor, sit atop a multimillion-dollar financial consulting firm, travel in private jets, own property in New York and boast of having clients around the world.
But rather than an unlikely story of triumph over the odds, the authorities here are investigating whether the Ãlvarez Puga brothers' powerful firm, which provides administrative services and fiscal advice to a long list of widely recognized companies, set up an elaborate scheme to pocket tax payments and engage in other fraudulent practices.
The investigation, which has led to international warrants against the director of the firm and one of the Ãlvarez Puga brothers, has lifted a veil on the widespread tax evasion in the growing and increasingly powerful outsourcing industry here, as well as the deep, often questionable ties between business and politics.
A former state governor, Pablo Salazar MendiguchÃa, is being held in prison pending trial, accused of, among other offenses, accepting $1.5 million in "illicit" money to direct business to the firm, Ãlvarez Puga & Asociados, according to the Chiapas State government.
And in recent weeks, Interpol, the global police body, has issued so-called red notices seeking the arrest of the director of the firm, José Antonio Aguilar Bodegas, a former senator, on suspicion of "organized and transnational crime," and that of Alejandro Ãlvarez Puga, the vice president of the firm, on bank fraud and other charges.
The firm is well known in Mexican business and political circles for providing a form of outsourcing services -- setting up an array of companies to handle the labor obligations of other businesses, including paying their employees' salaries and corresponding taxes -- for hundreds of Mexican and international companies.
First Published February 8, 2012 12:01 am
