Peppertree Capital Exec Had Prior Knowledge of Employee’s Alleged Corruption in El Salvador

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By LatAm Reports Editorial Team

John J. Rainieri, the Managing Director of Peppertree Capital Management, has admitted to having prior knowledge of the alleged criminal conduct of the then-CEO of Continental Towers Jorge Gaitan, who is now at the center of a sprawling criminal investigation in El Salvador.

The revelations of the American private equity firm’s involvement in the case comes amid a new court filing in the British Virgin Islands related to the sprawling legal dispute over the ownership of tower companies operating across Latin America.

According to an affidavit signed by Jose Alejandro Sagastume Figueroa, who serves as director of Continental Towers LATAM, the testimony provided to the court by Mr. Rainieri was chock full of “misleading inaccuracies.” In particular, Mr. Sagastume Figeroa strongly denies Rainieri’s allegations that they were allegedly involved in spreading defamatory news publications about the alleged criminal conduct of Gaitan and his COO Carol Echeverria – pointing out that the two individuals are sought by law enforcement authorities.

“The Second Interveners have no part in the state-led proceedings and investigations of Mr Gaitan and Mars. Echeverria in El Salvador and Guatemala,” Sagastume Figueroa writes in the affadavit. “Those are matters solely within the control of the governments of those countries and their public prosecutions systems.”

Additionally the affidavit reveals that the Peppertree Capital Managing Director was fully aware of the alleged corrupt dealings of the pair and failed to disclose these facts before a US federal court.

“Mr. Ranieri acknowledges in paragraph 13 of Rainieri-3 that he had full knowledge of Mr Gaitan’s meeting with Santa Tecla’s Mayor, Mr Roberto d’Aubuisson (“Mr d’Aubuisson”), however, what he fails to acknowledge is that that meeting has led to investigations of possible acts of corruption involving the Mayor, Mr Gaitan, and his father,” writes Sagastume in the court filing.

He continues: “Through several questionable acts, the First Interveners have sought to conceal crucial information concerning Mr Gaitan and Mrs Echeverria from the arbitral Tribunal and Judge Kaplan. It is due to such questionable acts that the Tribunal and Judge Kaplan issued questionable awards and rulings that not only imposed Mr Gaitan as the Company’s CEO but ignored that Mr. Gaitan is being investigated of crimes committed in El Salvador.”

Aubuisson, the former Mayor of Santa Tecla, appears to be involved in a sprawling anti-corruption investigation. He’s been accused of embezzling close to $1 million during his time in public office, he’s had his bank accounts frozen by the authorities, and is currently a fugitive from the law. Concerning his dealing with Gaitan, the authorities are investigating an alleged corrupt agreement d’Aubuisson made with the telecom executive linked to Peppertree in which they allegedly canceled an existing towers agreement only to build separate structures near the same site and embezzle a percentage of the rents from the carriers.

Peppertree Capital Management is the minority shareholder of Continental Towers. An arbitration dispute which focuses on Peppertree’s preference to sell the company has been winding its way through the courts for the past several years. Most recently the private equity firm has been successful before the Southern District of New York, however revelations of Rainieri’s knowledge and concealment of alleged acts of corruption by a key figure could prove problematic for the resolution of the dispute.