The owner of Buenos Aires’ biggest underground exchange house, Ivo Esteban Rojnica, appeared in court on Tuesday as the judiciary investigates his alleged links to large-scale operations of money laundering and capital flight.

On Tuesday, Customs raided an underground informal exchange house in Buenos Aires City and a broker in Rosario, which were allegedly linked to “The Croatian,” as Rojnica is known.

The investigation was launched last week with raids on Nimbus, the largest underground exchange house in Buenos Aires City which belonged to Rojnica. According to Customs, due to the volume of operations, Nimbus played an important role in defining the price of the informal “blue dollar” exchange rate. 

“There was documentation marking days when the exchange rate jumped and other information,” a spokesperson for Customs told the Herald.

According to Customs, documentation found during last week’s raids in The Croatian’s offices suggests that he was involved with a scheme that involved under-invoicing exports. 

A company called Refinería Sudamericana, which was fined by Customs for under-invoicing in June, was found among Rojnica’s documented assets. Using a U.S.-based company as a front, Refinería Sudamericana under-invoiced US$ 3 million worth of exports to Colombia and Peru to avoid paying taxes and selling dollars at the official market rate. 

The maneuver implied a triangulation, where the US dollars went to accounts in countries such as China and the United States and then returned to Argentina via the blue-chip swap rate. Then, they were traded for a higher price in the informal market.

The firm also manages a luxury boutique hotel in Patagonia, called Villa Beluno, which authorities suspect is linked to the alleged crimes being investigated.

“Everything points to the fact that Rojnica’s businesses are part of an illegal transnational operation,” a spokesperson for Customs said.

The Croatian appeared before the Federal Court 8, headed by Judge Marcelo Martínez de Giorgi, together with his lawyer Gastón Marano. He was allegedly in Brazil during the first raids.

The investigation on Rojnica is taking place in the context of rising tensions in the foreign exchange market, as the “blue dollar” reached AR$1,050 last week following incendiary remarks by presidential frontrunner Javier Milei. 

The government also began raiding underground exchange houses — popularly known as cuevas, Spanish for caves — including Nimbus. Economy Minister Sergio Massa said he would go hard on “speculators” who made the blue dollar rate go up.

“I won’t stop until I see them in jail,” he said last week.

This week, the value of the “blue dollar” decreased by 8% and closed at AR$905 on Wednesday. However, with net international reserves at negative levels and only days away from the presidential elections, the pressure to dollarize portfolios continues.