World Finance Corporation
| Company type | Private |
|---|---|
| Industry | Financial services |
| Founded | 1971 |
| Founder | Guillermo Hernández-Cartaya |
| Defunct | 1980 |
| Headquarters | Coral Gables, Florida , United States |
Key people | Guillermo Hernández-Cartaya (Founder and CEO) |
| Products | Banking, loans, financial services |
World Finance Corporation (WFC; subsequently known as WFC Corp.) was a financial institution established in 1971, with its headquarters located in Coral Gables, Florida. The company was led by its founder and CEO, Guillermo Hernández-Cartaya, a Cuban-born banker with alleged ties to the CIA and organized crime. WFC became the center of a significant financial scandal involving losses surpassing $50 million. Cartaya maintained control over WFC through the WFC Group, a shell entity that concealed his ownership and influence.
Founding
Entrepreneur Guillermo Hernandez-Cartaya founded WFC following his participation in the Bay of Pigs Invasion. The firm sought to capitalize on his broad network across Latin American political and economic spheres. It focused on bridging American lenders with Latin American borrowers, leveraging the 1969 Edge Act, which enabled expanded international banking activities.
WFC Group
The WFC Group, entirely owned by Cartaya, held major stakes in WFC and affiliated companies. It functioned as a strategic instrument to disguise Cartaya’s controlling interests and to support the corporation’s intricate corporate framework.
Overseas loans and banks
In 1975, WFC was appointed as the sole official agent for a $100 million loan extended by the Colombian government—the largest loan in Colombia's history—demonstrating its significant role in Latin American finance.
Unibank
WFC launched Unibank (Union de Bancos SA) in Panama in 1973, swiftly acquiring an esteemed Class One banking license. While WFC possessed the majority ownership, minority stakes were held by three U.S.-based banks, including subsidiaries of Mercantile Trust Company of St. Louis, First National Bank of Louisville, and Midatlantic Banks. By 1976, Unibank had grown internationally and accumulated nearly $50 million in deposits. Nonetheless, it faced financial distress leading to its seizure by Panama’s banking commissioner in 1977 after suffering $10 million in losses and defaulting on obligations owed to the National Bank of Panama. This failure underscored the risks inherent in WFC’s international banking operations.
Pan American Bank
In 1976, the Comptroller of the Currency removed Cartaya from his leadership position at the Pan American Bank of Hiateah in Florida following missing funds attributed to overdrafts and uncollected receivables. This incident triggered further inquiries that eventually uncovered the broader WFA scandal.
That same year, US Customs intercepted a private aircraft arriving from Panama carrying thousands of dollars in cash linked to WFC’s Vice President, as well as Cartaya and his spouse.
Ajman Arab Bank
The Ajman Arab Bank, founded within the Sheikdom of Ajman in the United Arab Emirates with government cooperation, encountered difficulties similar to those faced by Unibank and was shut down in May 1977. Cartaya traveled to the UAE to resolve issues related to missing funds; however, authorities confiscated his passport. Despite this, he managed to escape using documents provided by a Cuban contact.
Investigation and scandal
In 1976, WFC became subject to national scrutiny when an extensive investigation involving agencies such as the Dade County District Attorney's office, FBI, IRS, DEA, and Comptroller of the Currency revealed that it functioned as a major laundering center for Colombian cocaine traffickers. The probe extended over nearly two years and originated unexpectedly when law enforcement discovered WFC’s financial documents during an investigation into drug smuggling linked to King Spray Service.
The scandal ultimately led to the dissolution of WFC Corp in 1980. At the same time, overdrafts at the National Bank of South Florida—which had come under WFC control through a substantial cash-for-equity deal—drew regulatory attention.
Cartaya utilized WFC as the centerpiece of a complex corporate network channeling funds and non-performing loans to associates. For instance, WFC Corp was fully owned by WFC Group, with Cartaya exercising control both directly and via Neo-Floridian Development Company.
Funds were transferred through Cisalpine Bank, based in the Bahamas, into Swiss numbered accounts managed by Vatican Bank authorities. This bank was associated with Archbishop Paul Marcinkus and banker Roberto Calvi, entities implicated in laundering heroin proceeds for the Grey Wolves through Nugan Hand Bank.
Prominent figures from Florida such as Walter Sterling Surrey were involved; Surrey acted as director and legal counsel for WFC Corp but professed limited knowledge of illicit conduct.
The inquiry encountered allegations of corruption and obstruction. Justice Department investigator Jerome Sanford reported that the investigation was halted in 1978 following CIA objections concerning key suspects believed to be CIA operatives. These claims were supported by Florida officials.
Among those under suspicion were Richard Fincher and Hernandez-Cartaya. In response to revelations, Florida Attorney General Robert Shevin returned $7,600 in contributions received from businessmen connected to WFC’s Latin American network, while Dade County Democratic chairman Michael Abrams resigned from a board position at an insurance company backed by WFC.
A staff report from a House Select Committee on Narcotics detailed WFC’s involvement in extensive criminal enterprises including political corruption, arms trafficking, and global narcotics operations potentially involving CIA or KGB collusion.
Allegations emerged that eight out of twelve bank directors were current or former CIA personnel and that CIA Director William J. Casey obstructed investigations citing national security grounds. Ultimately, Cartaya was convicted on tax evasion charges in 1982 after many other accusations were dismissed.
Additional sources
- "People", 12 March 1978, section F7, The New York Times
- Everything Is Under Control, pages 113, 200, 250, 257, 293, 427; authored by Robert Anton Wilson with Miriam Joan Hill, William Morrow Paperbacks; first edition (June 23, 1998)
- Mark Lombardi: Global Networks, Mark Lombardi, Robert Carleton Hobbs, Judith Richards; Independent Curators, 2003 (catalogue for the traveling exhibit "Mark Lombardi Global Networks")