Costa Rica's Drug Problem. A recent multi-million-dollar money laundering investigation in Costa Rica illustrates how the government is tackling the country’s growing drug-related violence by going after the profits.
Authorities indicted 25 individuals on February 28 in the so-called “Fénix” case, accusing them of laundering approximately $17 million in drug trafficking profits.
As part of the investigation, prosecutors seized real estate, restaurants, barber shops, luxury cars, cattle, horses, and large sums of cash.
The accused reportedly used two of the most common laundering tactics in Costa Rica: investing in cash-heavy industries like real estate and cattle trading and creating shell companies to falsify sales and deposit illicit funds into local banks.
The case, which began in 2019, led to the 2022 arrest of alleged ring leader José Giovanni Segura Angulo, known as “Narizón,” in Panama.
Narizón is suspected of overseeing both drug trafficking and money laundering operations for Mexico’s Gulf Cartel.
The indictment also names bank representatives, municipal officials, and lawyers who allegedly played key roles in concealing illicit transactions.
Fénix is one of Costa Rica’s most prominent money laundering cases to date, underscoring how local criminal networks have become increasingly sophisticated in handling drug money.
According to former Costa Rican Security Minister Gustavo Mata, as drug trafficking expands, criminal groups generate more revenue, strengthening their operations.
The country’s drug unit seized over 26 tons of cocaine in 2024, slightly more than in previous years, while record seizures of over 47 tons occurred in 2020—the same period when much of the Fénix-linked laundering activity took place.
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Growing Threats and Government Response
Beyond its immediate impact, Fénix serves as a warning to Costa Rican gangs involved in laundering money for international drug cartels.
Despite being ranked the top Central American country in the Basel Institute on Governance Anti-Money Laundering Index in 2024, Costa Rica still faces significant challenges.
In January 2025, the European Union took Costa Rica off its tax blacklist, showing that the country is stepping up its game in financial oversight and law enforcement—unlike neighboring Panama, which is still having a tough time with it.
Costa Rica has strengthened its anti-money laundering regulations in recent years, increasing transaction monitoring and refining its legal framework to prosecute financial crimes better.
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A 2024 assessment found that the country met or largely met 37 out of 40 international standards for anti-money laundering.
However, the government’s financial crime enforcement efforts come amid record-high homicide rates, primarily fueled by gang wars over drug trafficking routes. In 2023, the country recorded a homicide rate of 17.2 per 100,000 people, a 38% rise from the previous year.
Costa Rica’s strategic location between South and North America makes it a prime transit point for international drug shipments, driving demand for local money laundering services.
Increasingly, homegrown gangs offer these services to transnational cartels, sometimes accepting drug payments instead of cash.
“We have mini cartels, composed entirely of Costa Rican citizens, which are at the service of large international cartels. They not only launder money but also store and re-export cocaine,” said Mata.
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According to Costa Rica’s anti-drugs institute, 68% of suspicious financial transactions involve Costa Rican nationals rather than foreign actors.
According to security analyst Daniel Chinchilla, the success of the Fénix case will depend on whether authorities can permanently seize the confiscated assets.
“In an earlier case, a major drug trafficker was convicted, but all his money and assets had to be returned because prosecutors failed to prove they came from drug trafficking,” Chinchilla noted.
If Costa Rica can secure convictions and asset forfeitures in the Fénix case, it could mark a turning point in the country’s battle against organized crime.
