<\/p>\n
It was supposed to be a cargo of bananas from Latin America. What Spanish police found on the ship in the Mediterranean port of Algeciras instead were 13 tons of cocaine.<\/p>\n
The drug bust in the fall of 2024 became the biggest in Spain\u2019s history at the time. The ensuing investigation has now revealed what authorities allege was a financial network used to launder money running all the way to the founders of a special-purpose acquisition company in Newport Beach, California, that\u00a0raised $200 million from investors just last year.<\/p>\n
The case has all the ingredients of a movie: a drug kingpin, a corrupt senior police officer with millions\u00a0in cash reportedly stashed in his walls, and links to Spanish royalty.<\/p>\n
Yet the allegations are also striking in how they link\u00a0financiers with Wall Street connections, an Irish fintech\u00a0trading crypto assets, luxury Dubai real estate and multiple offshore lenders.<\/p>\n
The details\u00a0are\u00a0being revealed in pre-trial\u00a0documents prepared for court by investigators\u00a0in Madrid and seen by Bloomberg. The alleged protagonists were formally named as suspects, or investigado in Spanish. None has been charged.<\/p>\n
Read: Trump says he\u2019ll cut off trade with Spain over air base use<\/p>\n
At the centre of the network sits a suspected drug lord by the name of Ignacio Tor\u00e1n, according to investigators. Described as a Real Madrid fan with a penchant for luxury watches, at one point he planned to use his wealth to invest in football players from Argentina.<\/p>\n
Allegedly working for him was \u00d3scar S\u00e1nchez, who at the time of the 2024 cocaine bust was chief of the national police\u2019s money-laundering unit. S\u00e1nchez is suspected of using his position to help\u00a0traffickers. When police raided S\u00e1nchez\u2019s home, they found \u20ac20 million\u00a0hidden in the walls of his house, Spanish media reported.<\/p>\n
Tor\u00e1n and S\u00e1nchez are in Spain and\u00a0were held on remand in prison. A lawyer for Tor\u00e1n declined to comment. S\u00e1nchez\u2019s lawyer didn\u2019t deny that money was found in his client\u2019s home, but questioned the legitimacy and procedure in the allegations against him.\u00a0<\/p>\n
Messages used as evidence, for example,\u00a0were obtained without the necessary court orders, for example,\u00a0the lawyer told Bloomberg.<\/p>\n
According to investigators, Tor\u00e1n also employed Francisco de Borb\u00f3n, the son of a duke and a distant cousin to Spain\u2019s King Felipe, and Ketan Seth, an American investor\u00a0based in a mansion in Newport Beach\u2019s upscale Dover Shores neighborhood.<\/p>\n
Investigators\u00a0say that Seth and De Borb\u00f3n were managing partners at Alpha Trading, a Californian firm that was funneling\u00a0Tor\u00e1n\u2019s drug money from offshore accounts at a bank in Panama.<\/p>\n
It\u2019s unclear how Seth and De Borb\u00f3n first crossed paths but they founded Alpha Trading in 2012, describing it\u00a0as a \u201cleading integrated commodity supply and marketing firm\u201d with offices in New York, Madrid and Miami.<\/p>\n
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Seth had other interests. He operated several UPS shipping outlets in New York during the 2010s but got tied up in disputes with landlords that resulted in judgments for unpaid bills of more than $300 000, according to legal filings.<\/p>\n
In 2025, Seth and De\u00a0Borb\u00f3n founded Blue Acquisition Corp. as a\u00a0special-purpose acquisition company, or SPAC,\u00a0targeting data centers and AI. Wesley Clark, the former four-star US Army general, became Blue\u2019s chairman.<\/p>\n
The firm, which lists Seth\u2019s house in Newport Beach as its headquarters, raised about $200 million last June through an initial public offering and forged ahead with a deal to acquire a data center in Niagara Falls.<\/p>\n
BTIG, the investment bank that\u2019s being taken over by US Bancorp, helped arrange the IPO while some of Wall Street\u2019s biggest hedge funds,\u00a0including Sona Asset Management and LMR Partners, are among the firm\u2019s largest shareholders today, Bloomberg data show.<\/p>\n
Representatives of BTIG, Sona and LMR all declined to comment for this story.<\/p>\n
Blue isn\u2019t named by investigators or accused of any wrongdoing. Seth resigned from the company on 9 June for what the firm described as \u201cfamily reasons\u201d, according to a regulatory filing.<\/p>\n
Blue\u2019s current CEO, David Bauer, told Bloomberg that Seth is \u201cno longer affiliated\u201d with the company in any capacity. De Borb\u00f3n served as a special advisor to Blue and the role terminated in February, Bauer said by email.<\/p>\n
\u201cWe are at that point where you just mention AI and data centers and everyone wants in,\u201d said Matt Tuttle, who oversees $5.3 billion as CEO of Riverside, Connecticut-based Tuttle Capital Management. \u201cI\u2019ve seen some strange stuff in SPAC world but this is a first for me.\u201d<\/p>\n
\u2018Grey zone\u2019<\/p>\n
Seth has been called to testify, though requested a delay through his lawyers and is now scheduled in court in September. He recently also requested that an international arrest warrant against him be lifted.<\/p>\n
Seth didn\u2019t respond to multiple emails and phone calls requesting comment or to a letter left at his Newport Beach address. His lawyer declined to comment.<\/p>\n
De Borb\u00f3n was being held in Spain and has since been released. His lawyer also declined to comment.<\/p>\n
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The case is particularly significant not just because of the size of the drugs bust but also because of the seniority of\u00a0S\u00e1nchez along with the alleged role of\u00a0investment structures, fintech firms, cryptocurrency\u00a0and international companies,\u00a0according to Annette Idler, a professor in global security at the University of Oxford who has studied illicit supply chains.<\/p>\n
\u201cSuccessful illicit entrepreneurs depend on legal markets, financial professionals, logistics companies, and corporate structures to conceal illicit proceeds,\u201d she said.<\/p>\n
\u201cThe grey zone between legal and illegal economic activity is precisely where many sophisticated criminal organizations thrive.\u201d<\/p>\n
The bust in the Spanish port of Algeciras followed one involving 1.6 tons of cocaine in May 2021. They were both brought into Spain from South America camouflaged among fruit imports\u00a0and with a combined market value of more than \u20ac350 million ($400 million), authorities claim.<\/p>\n
Later, when investigators examined S\u00e1nchez\u2019s personal phone records, they determined that another 58 tons had been smuggled into Spain between 2020 and 2024.<\/p>\n
That would amount to a retail value of $3.5 billion, based on an average price of $60 per gram, according to Gabriel Feltran, a professor at Sciences Po university in Paris who studies criminal networks.<\/p>\n
Such incidents are no longer rare as an increasingly sophisticated network of middlemen make the drug easier and cheaper to obtain and its proceeds smoother to launder, he said. \u201cIntermediation is driving both increases in production and consumption,\u201d said Feltran.<\/p>\n<\/p>\n
Investigators believe the head of the gang is Tor\u00e1n. He allegedly set up the web of holding companies in Spain and abroad, mostly formally owned by front men. When he was arrested, he owned two Spanish holding groups and was about to start operating a third.<\/p>\n
Police reckon that Tor\u00e1n owned real estate, mostly in Dubai, through those holding companies. This included a \u20ac10 million mansion in the W residential compound in Palm Jumeirah and \u20ac11 million in other properties in the city. He referred to these in messages as \u201cmy houses\u201d, investigators said.<\/p>\n
Read: Hackers behind $300m crypto theft now laundering loot<\/p>\n
Aside from this, Tor\u00e1n\u2019s gang had two offshore vehicles, including one in Panama\u00a0where it had an escrow account at Atlas Bank. While investigators couldn\u2019t seize cash or crypto assets, they estimate he had at least \u20ac10 million in bitcoin at the time of his arrest.<\/p>\n
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The gang used both fiat and crypto to move money across the world. It relied on Bitcoin, Tether and VXL dollar, and\u00a0to launder the money the gang needed\u00a0banks. That\u2019s where Ireland, Panama and S\u00e3o Tom\u00e9 and Pr\u00edncipe came in.<\/p>\n
Irish fintech<\/p>\n
There was also an Irish company called ET Fintech Europe Ltd, which was owned by De Borb\u00f3n and several other suspects, according to the investigators. ET Fintech was \u201cdirectly controlled by the criminal organisation\u201d, they said.<\/p>\n
Alina Burnard, a shareholder and director of ET Fintech, denied that the company was involved in money laundering. The Spanish allegations \u201cmaterially mischaracterise the purpose and activities\u201d of the firm, which was set up to develop a digital banking platform, she said in an emailed statement.<\/p>\n
Burnard has cooperated fully with the investigation, she said.<\/p>\n
There were also two entities in S\u00e3o Tom\u00e9 that investigators say were presented online as banks, though aren\u2019t registered with the local financial authority.<\/p>\n
In the money laundering business, such institutions are known as \u201cnested banks\u201d, which conduct transactions for clients using accounts in larger banks. The aim is to shield the real customer\u2019s identity.<\/p>\n
All these lenders were central to Tor\u00e1n\u2019s organisation. In an instant message in 2023, a close collaborator of Tor\u00e1n and his main financial manager said \u201cit all comes from those banks\u201d and \u201cit goes from there\u201d to other places.<\/p>\n
Another step in the financial scheme was the opening of an escrow account at another lender in Panama called Atlas Bank. At least eight people are named in the Spanish court documents as involved in the Panama set-up.\u00a0The escrow account had Alpha Trading, the firm run by Seth and De Borb\u00f3n, as the depositary.<\/p>\n
Ketan Seth in 2021. Image: Michael Tullberg\/Getty Images<\/p>\n
Alpha Trading took part in the transfers through a \u201ccomplex financial instrument\u201d, according to investigators. They don\u2019t identify the instrument.<\/p>\n
The \u201cinformation given by the Panamanian authorities confirms the money laundering operations\u201d, the investigators said. The entire set-up was aimed at \u201chiding the origin of the funds, as well as the identity of the real beneficiary\u201d and to give \u201can appearance of legality to the transaction\u201d.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#cocaine #bust #Spain #leads #Wall #Street<\/p>\n","protected":false},"excerpt":{"rendered":"
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