World Finance Corporation (abbreviated WFC; later renamed simply WFC Corp.) was a financial corporation founded in 1971 and headquartered in

Coral Gables Coral Gables, officially City of Coral Gables, is a city in Miami-Dade County, Florida. The city is located southwest of Downtown Miami. As of the 2020 U.S. census, it had a population of 49,248. Coral Gables is known globally as home to the U ...

Florida Florida is a state located in the Southeastern region of the United States. Florida is bordered to the west by the Gulf of Mexico, to the northwest by Alabama, to the north by Georgia, to the east by the Bahamas and Atlantic Ocean, and to ...

. When WFC Corp was headed and controlled by Guillermo Hernandez-Cartaya (a former Cuban banker who was an agent of the

CIA The Central Intelligence Agency (CIA ), known informally as the Agency and historically as the Company, is a civilian intelligence agency, foreign intelligence service of the federal government of the United States, officially tasked with gat ...

, and believed to be an agent of the Mafia, and also of various Colombian drug lords) through the WFC Group

shell company A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or s ...

, it became known for a major financial scandal in which over $50 million was lost. This scandal was the subject of a

60 Minutes ''60 Minutes'' is an American television news magazine broadcast on the CBS television network. Debuting in 1968, the program was created by Don Hewitt and Bill Leonard, who chose to set it apart from other news programs by using a unique styl ...

segment on 26 February 1978. Cartaya controlled it through a number of shell companies, the most well known of which was the WFC Group.

Founding

The corporation was founded in 1971 by the Cuban expatriate banker Guillermo Hernandez-Cartaya, after he finished serving a Cuban sentence for his participation in

The Bay of Pigs Invasion The Bay of Pigs Invasion (, sometimes called ''Invasión de Playa Girón'' or ''Batalla de Playa Girón'' after the Playa Girón) was a failed military landing operation on the southwestern coast of Cuba in 1961 by Cuban exiles, covertly fin ...

. The ''New York Times'' said:

With the formation of WFC, former associates said, Mr. Hernandez-Cartaya hoped to utilize his wide-ranging contacts in the Latin American political and economic world to tap the growing market between American lenders and Latin American borrowers made possible by the 1969
Edge Act The Edge Act is a 1919 amendment to the United States Federal Reserve Act of 1913, codified at {{UnitedStatesCode, 12, 611, 631, which allows national banks to engage in international banking through subsidiaries chartered by the Board of Governors ...
."Cuban Exile Banker Under Wide Inquiry",
Jeff Gerth Jeff Gerth is a former investigative reporter for ''The New York Times'' who has written lengthy, probing stories that drew both praise and criticism. He won a Pulitzer Prize in 1999 for covering the transfer of American satellite-launch technology ...
, 15 December 1977, A1, ''
The New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
''

WFC Group

The WFC Group was a

owned entirely by Guillermo Hernandez-Cartaya; it owned a large proportion of WFC and served to also mask Cartaya's controlling interest in it and other corporations.

Overseas loans and banks

In 1975, WFC was designated an "exclusive official agent by the

Colombia Colombia (, ; ), officially the Republic of Colombia, is a country in South America with insular regions in North America—near Nicaragua's Caribbean coast—as well as in the Pacific Ocean. The Colombian mainland is bordered by the Car ...

n Government for a loan of , the largest in the nation's history."

Unibank

Two years before, in 1973, WFC founded Unibank (Union de Bancos SA), a

Panamanian Panamanians (Spanish: ''Panameños'') are people identified with Panama, a transcontinental country in Central America (a region within North America) and South America, whose connection may be residential, legal, historical, or cultural. For mo ...

bank. It received with unusual swiftness Panama's most liberal banking license, a Class One license. Most of the equity was held by WFC, but a total of 24% (8% each) was held by three American banks—a subsidiary of Mercantile Trust Company of St. Louis, First National Bank of Louisville, and Midatlantic Banks of West Orange, N. S. Stakes were also held initially by two Latin American banks. Unibank was rather successful—by 1976 it had affiliates worldwide and about in deposit. In 1977, the banking commissioner of Panama seized Unibank; he had little choice since Unibank was a debtor to the

National Bank of Panama The National Bank of Panama ( es, Banco Nacional de Panamá) (BNP) is one of two Panamanian government-owned banks. As of January 2009, it held deposits of about US$5 billion. The other government-owned bank is ''Caja de Ahorros de Panamá'' (Savin ...

, and already had been lost. Unibank would not be the only bank begun by WFC principals to collapse with great financial loss.

Pan American Bank

In 1976, the Comptroller of the Currency forced Cartaya out of his control of the Pan American Bank of Hiateah in

– had gone missing due to bad

overdraft An overdraft occurs when something is withdrawn in excess of what is in a current account. For financial systems, this can be funds in a bank account. For water resources, it can be groundwater in an aquifer. In these situations the account is s ...

s and uncollected funds. This incident was the reason for the Comptroller's later involvement in the investigation that broke open the WFA scandal. Also in 1976, US Customs agents intercepted a private plane inbound from Panama. Aboard was thousands of dollars in cash, strapped to a woman associated with WFC's Vice President. On the plane were also that Vice President, Cartaya, and Cartaya's wife.

Ajman Arab Bank

Another bank had been started in the

United Arab Emirates The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia (The Middle East). It is located at th ...

's Sheikdom of Ajman, with the collaboration of the Ajman government. It was called the Ajman Arab Bank. It was plagued by the same problems as Unibank, and was shut down May 1977. Cartaya went to the UAE, apparently to try to explain the missing money, and the authorities confiscated his passport. Cartaya nonetheless escaped the UAE, using documents brought him by a fellow Cuban.

Investigation and scandal

WFC came to national attention when an investigation in 1976 by the District Attorney of Dade County,

, (along with four other governmental agencies; besides the Dade County Public Safety Office, the

FBI The Federal Bureau of Investigation (FBI) is the domestic Intelligence agency, intelligence and Security agency, security service of the United States and its principal Federal law enforcement in the United States, federal law enforcement age ...

, the

IRS The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax ...

, the

DEA The Drug Enforcement Administration (DEA; ) is a United States federal law enforcement agency under the U.S. Department of Justice tasked with combating drug trafficking and distribution within the U.S. It is the lead agency for domestic enf ...

, and the

Comptroller of the Currency The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to charter, bank regulation in the United States ...

all participated in the joint investigation) revealed that the WFC held the dubious distinction of being the longest running (and largest) launderer of money for

cocaine Cocaine (from , from , ultimately from Quechuan languages, Quechua: ''kúka'') is a central nervous system (CNS) stimulant mainly recreational drug use, used recreationally for its euphoria, euphoric effects. It is primarily obtained from t ...

smugglers; the investigation proceeded for approximately two years. Somewhat ironically, the law enforcement personnel literally stumbled onto lead, when, during an investigation of a pest-control service called King Spray Service suspected of drug smuggling, two agents of the Dade County Public Safety Office (which, under Donald Skelton, led the investigation until the Justice Department took over) were searching through the company's garbage, in which they found financial records of WFC, recording very large transfers of funds between the bank and the company, along with small amounts of

marijuana Cannabis, also known as marijuana among other names, is a psychoactive drug from the cannabis plant. Native to Central or South Asia, the cannabis plant has been used as a drug for both recreational and entheogenic purposes and in various tra ...

. The investigation ruined WFC Corp, and it closed in 1980.''Endless Enemies: The Making of an unfriendly world'',

Jonathan Kwitny Jonathan Kwitny (March 23, 1941 – November 26, 1998) was an American investigative journalist. Biography Kwitny was born in Indianapolis.

, 1984. Meuthen Publications, , Simultaneously, overdrafts at the National Bank of South Florida (controlled by WFC after a large payment of cash for equity) prompted an investigation by bank examiners.''

The Miami Herald The ''Miami Herald'' is an American daily newspaper owned by the McClatchy Company and headquartered in Doral, Florida, a city in western Miami-Dade County and the Miami metropolitan area, several miles west of Downtown Miami.William R. Amlong's article:

Representative Lester Wolff, chairman of House Select Committee on Narcotics Abuse and Control, says Guillermo Hernandez-Cartaya is being investigated as a business partner of Fidel Castro. His committee is looking at $100 million loan arranged by Castro and Hernandez-Cartaya's Miami-based international banking firm, WFC Corp, to Colombia. Wolff alleges loan conditions include facililtation of cocaine smuggling from Colombia to US by Miami firm. Cites intelligence reports from various federal agencies.

Cartaya used the bank as the centerpiece of an elaborate corporate labyrinth, through which the funds and bad loans (to Cartaya and his associates) were filtered and "laundered". An example of the labyrinth: WFC Corp. was 100% owned by the WFC Group, which itself was owned by Cartaya to the amount of 24.7%; another 23.3% was held by "Neo-Floridian Development Company"- of NFDC, 54.4% was held by Cartaya, again. A considerable proportion of the money was funneled through a bank in the Bahamas called the Cisalpine Bank*, and from thence to the Vatican Bank to Swiss numbered accounts; this bank was owned by

Vatican Bank The Institute for the Works of Religion ( it, Istituto per le Opere di Religione; la, Institutum pro Operibus Religionis; abbreviated IOR), commonly known as the Vatican Bank, is a financial institution situated inside Vatican City and run by a ...

manager Archbishop

Paul Marcinkus Paul Casimir Marcinkus (; January 15, 1922 – February 20, 2006) was an American archbishop of the Roman Catholic Church and president of the Institute for the Works of Religion, commonly known as the Vatican Bank, from 1971 to 1989. Early ...

and notorious dirty Italian banker

Roberto Calvi Roberto Calvi (13 April 1920 – 17 June 1982) was an Italian banker, dubbed "God's Banker" () by the press because of his close association with the Holy See. He was a native of Milan and was chairman of Banco Ambrosiano, which collapsed in on ...

. The Cisalpine Bank* seems to have also been laundering

heroin Heroin, also known as diacetylmorphine and diamorphine among other names, is a potent opioid mainly used as a recreational drug for its euphoric effects. Medical grade diamorphine is used as a pure hydrochloride salt. Various white and brow ...

profits through the

Nugan Hand Bank Nugan Hand Bank was an Australian merchant bank that collapsed in 1980 after the suicide of one of its founders, Australian lawyer Francis John Nugan, resulting in a major scandal. News stories suggested that the bank had been involved in illega ...

for the

Grey Wolves The wolf (''Canis lupus''; : wolves), also known as the gray wolf or grey wolf, is a large canine native to Eurasia and North America. More than thirty subspecies of ''Canis lupus'' have been recognized, and gray wolves, as popularly u ...

. The bank was involved with a number of prominent Floridians, such as Walter Sterling Surrey, a stockholder in, director of, and lawyer for, WFC Corp. Kwitny recounts,

Surrey says he came aboard mainly to help start a foreign-based
mutual fund A mutual fund is a professionally managed investment fund that pools money from many investors to purchase securities. The term is typically used in the United States, Canada, and India, while similar structures across the globe include the SICAV i ...
for an old client, a Cuban exile who helped found World Finance. He says he dropped out in 1976 when the mutual fund deal fell through, and that he was unaware of any criminal or intelligence activities of the company.

The investigation and its aftermath were marred and dogged by persistent rumors and allegations of corruption and cover ups by various governmental agencies.

Jonathan Kwitny Jonathan Kwitny (March 23, 1941 – November 26, 1998) was an American investigative journalist. Biography Kwitny was born in Indianapolis.

writes this of the Justice Department's head investigator, Jerome Sanford:

He says the main investigation was halted by Washington in 1978, after the CIA objected that 12 of the Justice Department's chief targets were "of interest" to it. Sanford says he was told that this meant the men he was investigating were CIA operatives of one sort or another. Florida lawmen who worked with Sanford backed up his story.

Two of the suspects were Richard Fincher and Hernandez-Cartaya. In the aftermath, Florida

Attorney General In most common law jurisdictions, the attorney general or attorney-general (sometimes abbreviated AG or Atty.-Gen) is the main legal advisor to the government. The plural is attorneys general. In some jurisdictions, attorneys general also have exec ...

Robert Shevin Robert L. Shevin (January 19, 1934 – July 11, 2005) was the Florida Attorney General from 1971 until 1979 and a judge on the Florida Third District Court of Appeal. Background Robert Shevin was born in Miami, Florida. He received his bachelor' ...

returned $7,600 in contributions from WFC-connected Latin businessmen. Dade County Democratic chairman Michael Abrams resigned from the board of a WFC-backed insurance company. Kwitny and Sanford were not the only ones to detect things amiss; Kwitny offers this extract from a House Select Committee on Narcotics and Drug Abuse staff report:

There is no question that the parameters of the WFC can encompass a large body of criminal activity, including aspects of political corruption, gun running, as well as narcotics trafficking on an international level ... It is against this background that our investigation encountered a number of veiled or direct references to CIA or
KGB The KGB (russian: links=no, lit=Committee for State Security, Комитет государственной безопасности (КГБ), a=ru-KGB.ogg, p=kəmʲɪˈtʲet ɡəsʊˈdarstvʲɪn(ː)əj bʲɪzɐˈpasnəsʲtʲɪ, Komitet gosud ...
complicity or involvement in narcotics trafficking in South Florida.

There were also allegations that 8 of the 12 bank directors were either current or former

employees, and that then-CIA director

William J. Casey William Joseph Casey (March 13, 1913 – May 6, 1987) was the Director of Central Intelligence from 1981 to 1987. In this capacity he oversaw the entire United States Intelligence Community and personally directed the Central Intelligence Agency ...

(coincidentally, a

Roman Catholic Roman or Romans most often refers to: *Rome, the capital city of Italy *Ancient Rome, Roman civilization from 8th century BC to 5th century AD *Roman people, the people of ancient Rome *'' Epistle to the Romans'', shortened to ''Romans'', a lette ...

) apparently stymied the investigation for reasons of "national security". And so the two-year investigation ended in the conviction of Cartaya in 1982 for nothing more than tax evasion.