Six Officials Arrested in Argentine Shipyard Scam

Argentinian authorities have arrested six executives and public officials in connection with investigations of fraud at the nation's number two shipbuilder, the state-run enterprise Astillero Río Santiago (Río Santiago Shipyard). They face allegations of embezzlement of public funds. 

The arrests come as part of an investigation into contracts at the yard between 2012 to 2013. If proven, the amount of the fraud would total to about $1 million.

The Attorney for Complex Crimes for the La Plata region, George Paolini, ordered the arrest of the firm's former chairman, Hector Scavuzzo, salary and wage coordinator Rodolfo Elisetch, secretary Oscar Borcerio, general manager July Borovik, and Andrés Ombrosi, former chief of staff for the Buenos Aires Ministry of Production.

The president of the Municipal Board of Tourism for Mar del Plata, Emiliano Giri, was also arrested in connection with the investigation, reports Buenos Aires paper La Prensa. He could face up to 10 years in prison if convicted.

Authorities discovered the alleged scheme when a resident of a town some 275 miles from the shipyard attempted to collect on a public benefit for families but could not, as her husband was listed as a yard employee with a salary of $2,000.

Investigators allege that the yard was contracting with lower-income people to place them on the payroll, then divert their wages, La Prensa reported.

As recently as September, chairman Scavuzzo was publicly involved in a campaign for additional government support for Argentina's shipyards – and specifically, for the inclusion of Astillero Río Santiago, which operates in its own duty free zone.