Peru's Most Wanted Man In Miami -- Prosecutors Say Pyramid Scheme Took $350 Million

LIMA, Peru - Depending on the person to whom you talk, Carlos Manrique is Peru's biggest sinner or its next saint. All agree, however, that he's its most wanted man.

Once Peru's businessman of the year, Manrique, 58, is now in prison in Miami, awaiting extradition in the biggest embezzlement case in Peru's modern history.

Prosecutors say Manrique devised an elaborate pyramid scheme that bilked 160,000 people out of $350 million. The case has come to highlight the desperation of Peruvians trapped by poverty and economic stagnation.

It also punched holes in President Alberto Fujimori's celebrated campaign to stamp out corruption. Despite a warrant for his arrest, Manrique slipped out of the country with an illegal passport.

Manrique is charged with defrauding depositors who invested in his quasi-bank at the height of Peru's recession. The collapse of Centro Latinamericano de Asesoria Empresarial, known by its acronym CLAE, left many penniless.

"He's an intelligent crook," said Toribio Roque, one of about 800 people who queued up last week to register a claim in hopes of eventually recovering money.

"That money was the product of our hard work. Along came that trickster, and now we have nothing," said Nelly Velasco, who lost $5,000.

Not every depositor blames Manrique, a short, dark-skinned man from Cuzco who didn't fit the mold of Peru's white business elite.

"For me, Mr. Manrique is not a swindler. The swindler is the

government," said retiree Antonio Cardenas, who lost his life savings.

In its heyday in 1991 and 1992, CLAE was seen by many Peruvians as a way out of poverty.

Tens of thousands who lost their jobs as the government trimmed bureaucracy and pared state companies for privatization invested their severance pay in CLAE.

While conventional banks paid interest of around 6 percent, CLAE was paying as much as 20 percent. Many people lived off that interest.

The government intervened in CLAE in April 1993, saying the unregulated financial company was insolvent. It backed off when 100,000 people turned out at a downtown plaza to support Manrique.

The government gave CLAE time to clean up its affairs and register with regulators. Manrique, meanwhile, assured depositors that CLAE would cover its debts. It never did.

"The intervention in CLAE was done in the worst possible manner," said political analyst Fernando Rospigliosi. "The consequences are clear: CLAE closed (and) the money it had disappeared."

Authorities finally ordered Manrique's arrest in February when he couldn't show what CLAE had done with deposits. Investigators who seized the company's offices found only a few thousand moldy U.S. dollars in a safe.

Manrique was arrested Oct. 31 in Miami and, claiming he is the victim of a vendetta by Fujimori, is seeking political asylum in the United States. An extradition hearing is set for Dec. 30.

Rospigliosi said the CLAE scandal could come back to haunt Fujimori, who is running for re-election in April.

"Most CLAE depositors feel that one way or another the government toppled CLAE," said Mario Escobar, a teacher who lost $2,000. "Whether they put Manrique in prison or not is not the issue. They just want their money back."