Paraguay Passport Scam Exposed

In July 2013, I spent four days in Las Vegas at FreedomFest. This annual event is huge, with as many as seven presentations occurring at the same time. I focused on the offshore-related presentations. And one was a real doozy.

Too Good to Be True

The speaker claimed that his company could get its clients a passport from Paraguay in as little as one month. “Hundreds” of clients, he said, had already done so. This was supposedly possible through high-level contacts in the government. The cost: only $45,000 – less than half of what any of the second citizenship programs we work with charge.

Shortly after I returned home, I warned readers to avoid this program, because it had no basis in law.

Article 148 of Paraguay’s constitution expressly states a foreigner needs to be a resident for a minimum of three years before claiming citizenship.

I knew 100% that this program was a scam. But I had no way to prove it. I made a note, though, to follow events in Paraguay closely, to see if there were any arrests for passport fraud.

Uncovering the Passport Scam

Eleven months later, on June 10, 2014, it finally happened. An article appeared in the Paraguay local press reporting that a German citizen, Claudia Bettina Müller, had been arrested for passport fraud.

The article reported that federal police had raided Müller’s home. They found high-tech printing and engraving machines, along with boxes of blank passports and fake government forms. The machines produced not only fake Paraguay identity cards, but counterfeit authentication stamps from many different countries, including the US.

Officials from the US embassy were asked to take some of the materials seized in the raid. These were presumably fake US documents and stamps found in the home.

Müller also seems to have produced backdated documents. They “prove” that her customers had lived in Paraguay for at least three years, as the law requires for citizenship and a passport.

Consequences of the Scam

#1: For the Scammers

You can be certain that since US documents were counterfeited, the FBI and other federal agencies are already reviewing the seized evidence.

Press reports from Paraguay state that “hundreds” of client files were seized, perhaps along with the computers Müller used to carry out the scam. Things will not end well for Müller or for promoters of her services, including the gentleman who spoke so eloquently in Las Vegas.

#2: For Clients Who Purchased Fake Passports

Individuals who purchased counterfeit Paraguay passports may not face arrest as long as they don’t try use to use them as a travel document (although acquiring a passport through bribery is a crime). But, if contacted by the FBI, they’ll be forced to give up the passports. And since the entire paper trail used to “authenticate” their three-year residence in Paraguay was faked, it’s extremely unlikely they’ll be able to get the passports replaced.

Anyone foolish enough to use a Paraguay passport obtained through these means faces much more serious sanctions. It’s almost certain that Paraguay has already issued an Interpol notice informing immigration authorities worldwide of the fraud. That’s bad news for anyone who uses a fake Paraguay passport to cross a border. Penalties for entry to almost any country using false documents almost always include imprisonment – in some cases up to 10 years.

Red Flags in Second Passport Programs

It’s unfortunate that scam artists have become involved in promoting second passports.

But how can you determine which second passport programs are legitimate… and which are scams? In conducting due diligence on second passport offerings, I look for the following red flags:

• Too cheap. The total cost of the least expensive white-market (legal) economic citizenship program, in the Commonwealth of Dominica, comes to about $100,000 for a single applicant or $175,000 for an opposite-sex married couple. Any passport issued for much less than that amount should be presumed to be issued illegally, unless the company offering it can point to specific black-letter law authorizing its issuance. The Paraguay passport program promoted in Las Vegas definitely failed this test.
• Too easy. No country issues a certificate of nationality and a passport without a detailed application process, including completion of official application forms, a background check, and, in virtually all cases, at least one personal visit. (St. Kitts & Nevis is an exception.) Obviously, the Paraguay passport scam failed this test.
• Too fast. No government can approve an application for citizenship and passport in only a month. The fastest authorities can conduct a reasonably complete investigation and move the application through several layers of bureaucracy is three or four months, and usually much longer. The Paraguay passport scam also failed this test.
• Too anonymous. Any promoter who tells you that you have to pay cash for your passport and that the ability to issue the passport is based on a secret law or regulation, or who promises to issue you a passport in any name you choose, falls into this category.
• Too limited. Passports that come without a certificate of nationality fit into this category, because they can’t be renewed. If the passports Müller sold didn’t come with certificates of nationality, it won’t be possible to renew them when they expire. But even if they did, since the certificates were faked as well, there will likely be no official record of citizenship. And again, that means the passports won’t be renewable.
• Too good to be true. This is a catchall category, but the Paraguay “instant” passport program definitely falls into it. Acquiring a second passport isn’t as easy as falling off a log. You can’t simply give someone a check and expect that 30 days later you’ll receive a shiny new passport.

The passports sold by Claudia Müller and those promoting her services ticked at least three of these red flags.

I’ve been in the offshore business since 1984, and I’ve seen dozens of these passport frauds come and go. And from experience with thousands of clients, I can tell you: the only proper way to do this is the legal way.

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