The OCIF orders the voluntary liquidation of Bancrédito, the bank that contributed to the electoral campaigns for the governorship

The Office of the Commissioner of Financial Institutions (OCIF) issued today, Monday, a complaint and order to show cause against Bancredito International Bank & Trustwith which the bank’s voluntary liquidation process has begun, after its repeated failure to comply with the regulator’s requirements.

The commissioner of the OCIF, Natalia Zequeirahe explained, in an interview with The new daythat this order occurs after Bancrédito failed to comply with the requirementmade in December, to appoint an independent committee of three directors who would take control of the bank’s management. This was a money laundering prevention measure.

The owner and president of the Board of Directors of the banking entity is the Venezuelan Julio Herrera Velutiniwho is one of the objects of investigation of the Federal Bureau of Investigation (FBI, in English) for allegedly having illegally donated to the former governor Wanda Vazquez Garced in his attempt to remain in La Fortaleza, according to a source.

The bank also contributed as a corporation to Save Puerto Rico, the super PAC that supported Governor Pedro Pierluisi’s candidacy; as well as another super PAC that supported his opponent, Carlos “Charlie” Delgado. These contributions are allowed by federal law, unlike those given by a foreign person, as allegedly occurred in the case of Vázquez Garced.

“This order begins an administrative and adjudicative process… They have 20 days to convince me why I should not order their voluntary liquidation. If they do not answer, it is understood that they accept the requirements of this order and must submit an ordinary voluntary liquidation plan to the office.” the commissioner said.

Zequeira explained that the ordinary examination of Bancrédito’s operations began on July 1, 2019, when the commissioner was present. George Joyner Kelly in charge. The report was notified to him on December 17, 2020, with a number of findings of non-compliance, which, however, are confidential by provision of Law 52 of 1989.

For that period, the ex-commissioner appointed by the ex-governor was already in office, Victor Rodriguez Bonilla, who had been a compliance consultant for Bancrédito. Rodríguez Bonilla was confirmed on June 4, 2020, but it was not until the 25th of that month that he refrained from dealing with everything related to that institution.

The new day had reported that Vázquez Garced had asked Joyner Kelly to resign, which occurred on March 6, 2020, after pressure to derail the examination against Bancrédito, according to a source.

The OCIF examiners evaluated a sample of the transactions made by the international banking entity between September 1, 2016 and March 31, 2019, as well as its operation during that period.

“I had nothing to do with the content of that exam. It was already signed, when I arrived at the position”clarified Zequeira who also stressed that the findings and the document remained unchanged in its entirety.

Under Zequeira’s leadership, a process began in which the bank’s management was allowed to present arguments and evidence in its favor. On December 21, 2021, they signed a memorandum of understanding with the OCIF in which Bancrédito undertook to take a series of corrective actions.

“They were required and directed to comply with the highest practices of compliance and prevention of money laundering and corporate governance that exist in the industry. The entity was required to create a special committee to oversee compliance with the office order and all money laundering prevention issues.”, Zequeira explained about the memorandum.

Nevertheless, the complaint and order to show cause, issued today, occurs after the bank failed to comply with one of the agreements reached in December of last year: the creation of an independent committee of three special directors to take over the governance of the bank. “We put external controls on it so that the shareholder did not influence the decisions and operation of the bank according to best practices”Zequeira explained.

“Apart from that special committee, they were required to hire an independent third party to review all Bancrédito transactions in that four-year period.”, Zequeira pointed out.

Failure to appoint independent committee

The complaint reveals that Bancrédito’s Board of Directors appointed the directors’ committee between January and March of this year, but two of them resigned in April of this year. This led to them failing to comply with the requirement of having the committee established two months after the agreement was signed.

In fact, Herrera Velutini and his board of directors they appointed the former Secretary of the Treasury, Jesús F. Méndez; and the CPA, Ramón Ponte to that committee, which held its first meeting on January 18 this year. The OCIF notified, in February, that the designation of a third member of the committee was missing. In March, Miguel Venta, retired managing partner of KPMG, was appointed.

Nevertheless, On April 29, Bancrédito presented its progress report in which it reported that both Venta and Méndez had resigned.

In its complaint, the OCIF ordered a fine of $5,000 for each of the 50 days in noncompliance, for a total of $270,000.

Previously, the OCIF had only carried out a capitalization examination of the bank, in 2016.

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