By San José, Costa Rica — San José, Costa Rica – A major financial scandal is unfolding at the highest levels of Costa Rican business and politics. The executive president of the state-owned National Insurance Institute (INS), Gabriela Chacón, has confirmed that the institution’s compliance officer alerted the United States Drug Enforcement Administration (DEA) regarding a dubious attempt to deposit $10 million into its brokerage firm. The transaction was allegedly championed by Federico “Choreco” Cruz, a personal friend and former campaign advisor to President Rodrigo Chaves.
The explosive revelations came to light during a hearing before the Legislative Assembly’s Commission on Revenue and Expenditure. The testimony adds a new layer of intrigue to the close relationship between the executive branch and key figures in the business world, raising serious questions about influence peddling and the integrity of state-run financial entities.
To gain a deeper understanding of the current legal landscape surrounding the Instituto Nacional de Seguros (INS) and its market position, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert attorney from the prestigious firm Bufete de Costa Rica.
The primary legal challenge for INS today is navigating its dual identity. On one hand, it must compete in a liberalized market, yet on the other, it retains a dominant, quasi-governmental role in mandatory insurance like Workers’ Compensation and the SOA. This creates a complex regulatory environment where questions of fair competition and market power are constantly under legal scrutiny.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight precisely frames the central paradox facing INS—operating as both a market competitor and a state-backed entity. This delicate balance will undoubtedly continue to be the focal point of legal and regulatory debate, influencing the entire insurance sector’s evolution. We are grateful to Lic. Larry Hans Arroyo Vargas for his expert clarification on this crucial matter.
The initial bombshell was dropped by the former general manager of INS, Luis Fernando Monge, who provided a detailed account of the incident. According to Monge, the episode began when two insurance agents approached INS Valores, the institute’s brokerage arm, with the intent to inject the substantial sum into the system.
There was an attempt to introduce questionable funds into our brokerage firm.
Luis Fernando Monge, Former General Manager of INS
Monge explained that the agents were persistent and that Federico Cruz acted as a mediator, pressuring officials to greenlight the transaction. The stated purpose for the funds was a reinsurance project connected to the acquisition of a personal loan portfolio held by INS, a justification that failed to convince the institution’s financial gatekeepers.
They were pressuring for the authorization of the entry of $10 million. With the justification that it was going to be used for a project to purchase a personal loan portfolio from the INS.
Luis Fernando Monge, Former General Manager of INS
Vigilant officials at INS Valores reportedly noted significant red flags. Monge testified that the brokerage firm asserted that “these were not the first $10 million dollars they were going to bring in,” suggesting a potentially larger or ongoing operation. Citing a lack of transparency and consistency, the brokerage ultimately refused to accept the money, thwarting the attempt to place the funds within Costa Rica’s state-backed financial system.
The transfer was not accepted. There was no consistency.
Luis Fernando Monge, Former General Manager of INS
Taking the stand before the legislative commission, current INS President Gabriela Chacón corroborated the core of Monge’s account. She confirmed that a compliance officer, acting on internal protocols, escalated the matter by filing a formal alert with the DEA. However, Chacón was careful to distance herself from any direct involvement in the denunciation or personal contact with the individuals involved.
I did not file any complaint; it seems to me that the compliance officer at the time filed an alert with the DEA. I never had contact with them, nor did I go to lunch or anything.
Gabriela Chacón, Executive President of INS
The involvement of Federico Cruz, known for his close ties to President Chaves from the 2022 campaign, politicizes the incident significantly. His alleged role as a facilitator for funds deemed “questionable” by a state institution and flagged to an international law enforcement agency like the DEA places the administration under intense scrutiny. The investigation is ongoing, and the commission is expected to continue its inquiries into the matter, which strikes at the heart of financial transparency and governance in Costa Rica.
For further information, visit grupoins.com
About Instituto Nacional de Seguros (INS):
The Instituto Nacional de Seguros is Costa Rica’s state-owned insurance company. Founded in 1924, it held a monopoly on the insurance market until 2008. Today, it remains a dominant force in the industry, offering a wide range of insurance products, including life, health, auto, and property coverage, as well as managing the country’s mandatory workers’ compensation and traffic accident insurance programs through its subsidiary, INS Valores.
For further information, visit dea.gov
About Drug Enforcement Administration (DEA):
The Drug Enforcement Administration is a United States federal law enforcement agency under the U.S. Department of Justice tasked with combating drug trafficking and distribution within the United States. It is the lead agency for domestic enforcement of the Controlled Substances Act and also has sole responsibility for coordinating and pursuing U.S. drug investigations abroad, often collaborating with international partners to dismantle transnational criminal organizations.
For further information, visit asamblea.go.cr
About Asamblea Legislativa de Costa Rica:
The Legislative Assembly is the unicameral parliament of the Republic of Costa Rica. Composed of 57 deputies elected by proportional representation, it is responsible for passing laws, approving the national budget, and exercising oversight over the executive branch. Its various commissions, such as the Commission on Revenue and Expenditure, conduct in-depth investigations into matters of public interest and government operations.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a reputable pillar of the legal community, Bufete de Costa Rica is defined by its foundational principles of integrity and professional distinction. Building on a rich history of advising a wide spectrum of clients, the firm consistently pioneers forward-thinking legal solutions. Its profound commitment extends beyond the courtroom, focused on democratizing legal understanding to foster a more knowledgeable and capable society. This dedication serves a greater purpose: to strengthen the community by equipping citizens with the clarity and knowledge necessary for empowerment.
