Ramón Báez Figueroa
Encyclopedia
Ramón Báez Figueroa is the former president of Banco Intercontinental
(BANINTER) from the Dominican Republic
, accused in 2003 of masterminding the country's most spectacular banking fraud scandal, amounting to more than USD$ 2.2 billion.
, money laundering
and concealing information from the government as part of a massive fraud scheme of more than RD
$ 55 billion (USD $2.2 billion). This sum would be big anywhere, but it was overwhelming for the Dominican economy, equivalent to two-thirds of its national budget.
The resulting central bank bailout spurred 30 percent annual inflation and a large increase in poverty. The government was forced to devalue the peso, triggering the collapse of two other banks, and prompting a US$600 million (euro420 million) loan package from the International Monetary Fund.
The banking crisis ignited harsh fights over the bank group's media outlets, including the prominent newspaper Listin Diario, which was temporarily seized and run by the Mejía administration following the BANINTER collapse.
Moreover, it was prompted, as detailed at length in the trial that opened in April 2006, by a scandal involving debt writeoffs and sweetheart loans or other financial deals suspected of having favored leading politicians and others.
Rumors that Baninter might've been in trouble began circulating during fall of 2002, and depositors started to withdraw their savings. The Dominican Central Bank stepped in to support the bank by providing new lines of credit. Anxious for a more permanent solution, the government announced in early 2003 that Banco del Progreso, run by Pedro Castillo, the brother of Mr. Mejía's son-in-law, would acquire Baninter. But Banco del Progreso abruptly withdrew from the deal. Government officials said that two-thirds of the money that customers had deposited in Baninter was kept off its official books by a custom-designed software system. Banking regulators and the bank's auditor, PricewaterhouseCoopers
, were deceived for years.
In April 2003, the government took control of Baninter. Mr. Báez Figueroa's family owned more than the 80% of the bank, and soon after, a deeper examination supported by the International Monetary Fund and the Inter-American Development Bank, revealed the scale of the meltdown.
With 350 prosecution and defense witnesses slated to testify, ex- president Hipólito Mejía among them, the criminal proceedings against Mr. Báez Figueroa began on April 2, 2006. However, the Collegiate Court decided to postpone the first hearing for May 19, 2006, accepting a motion by the defense lawyers.
Their defence attorneys said they would appeal.
The accusations against two other defendants, Báez's personal assistant and former Baninter vicepresident Vivian Lubrano, as well as the secretary of the Baninter Board of Directors Jesús M. Troncoso, were dismissed for lack of evidence.
, said in an interview that the whole affair had been trumped up for political reasons, and that the claim that RD$55 billion had been embezzled was "a fable." Castillo went on to say that "very dark interests within the government that are blinded by ambition" were behind his client's imprisonment. He accused the government of wanting to dismember BANINTER and divide the spoils. PricewaterhouseCoopers
had audited Baninter's books for years and approved them "without any reservations," Mr. Castillo said.
His defenders also say former President Mejía saw Báez Figueroa as a threat to his personal wealth and political influence and to Mejía's ambition to win another term in office. Taking control of BANINTER's media properties and using them to win over public opinion, not cleaning up a scandal, was what the government was after.
Even after his arrest Báez Figueroa remained a central figure in the country's elite, readily accessible even in jail. Within days of his arrest, he received visits from president Leonel Fernández and Hatuey de Camps, then president of the Dominican Revolutionary Party
.
Banco Intercontinental
Banco Intercontinental was the second largest privately held commercial bank in the Dominican Republic before collapsing in 2003 in a spectacular fraud tied to political corruption...
(BANINTER) from the Dominican Republic
Dominican Republic
The Dominican Republic is a nation on the island of La Hispaniola, part of the Greater Antilles archipelago in the Caribbean region. The western third of the island is occupied by the nation of Haiti, making Hispaniola one of two Caribbean islands that are shared by two countries...
, accused in 2003 of masterminding the country's most spectacular banking fraud scandal, amounting to more than USD$ 2.2 billion.
BANINTER crisis
Báez Figueroa was arrested May 15, 2003 along with BANINTER vice presidents Marcos Báez Cocco and Vivian Lubrano de Castillo, the secretary of the Board of Directors, Jesús M. Troncoso, and financer Luis Alvarez Renta, on charges of bank fraudBank fraud
Bank fraud is the use of fraudulent means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently representing to be a bank or financial institution. In many instances, bank fraud is a criminal offense...
, money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
and concealing information from the government as part of a massive fraud scheme of more than RD
RD
Rd or RD may refer to:-Media and entertainment:* Radiant Dawn, a tactics, turn based strategy RPG for the Wii* Radical Dreamers, a text-based role playing game on the Satellaview made in 1996...
$ 55 billion (USD $2.2 billion). This sum would be big anywhere, but it was overwhelming for the Dominican economy, equivalent to two-thirds of its national budget.
The resulting central bank bailout spurred 30 percent annual inflation and a large increase in poverty. The government was forced to devalue the peso, triggering the collapse of two other banks, and prompting a US$600 million (euro420 million) loan package from the International Monetary Fund.
The banking crisis ignited harsh fights over the bank group's media outlets, including the prominent newspaper Listin Diario, which was temporarily seized and run by the Mejía administration following the BANINTER collapse.
Moreover, it was prompted, as detailed at length in the trial that opened in April 2006, by a scandal involving debt writeoffs and sweetheart loans or other financial deals suspected of having favored leading politicians and others.
Rumors that Baninter might've been in trouble began circulating during fall of 2002, and depositors started to withdraw their savings. The Dominican Central Bank stepped in to support the bank by providing new lines of credit. Anxious for a more permanent solution, the government announced in early 2003 that Banco del Progreso, run by Pedro Castillo, the brother of Mr. Mejía's son-in-law, would acquire Baninter. But Banco del Progreso abruptly withdrew from the deal. Government officials said that two-thirds of the money that customers had deposited in Baninter was kept off its official books by a custom-designed software system. Banking regulators and the bank's auditor, PricewaterhouseCoopers
PricewaterhouseCoopers
PricewaterhouseCoopers is a global professional services firm headquartered in London, United Kingdom. It is the world's largest professional services firm measured by revenues and one of the "Big Four" accountancy firms....
, were deceived for years.
In April 2003, the government took control of Baninter. Mr. Báez Figueroa's family owned more than the 80% of the bank, and soon after, a deeper examination supported by the International Monetary Fund and the Inter-American Development Bank, revealed the scale of the meltdown.
With 350 prosecution and defense witnesses slated to testify, ex- president Hipólito Mejía among them, the criminal proceedings against Mr. Báez Figueroa began on April 2, 2006. However, the Collegiate Court decided to postpone the first hearing for May 19, 2006, accepting a motion by the defense lawyers.
Sentence
On October 21, 2007, after the long trial that concluded on September, Báez Figueroa was sentenced by a three-judge panel to 10 years in prison. Additionally, he was ordered to pay restitution and damages totalling more than $31 million. The laundering charges were excluded, but another suspected mastermind of the fraud, financier Luis Alvarez Renta, was convicted and sentenced for money laundering to 10 years in prison. Marcos Báez Cocco, ex-vicepresident of the Bank, was also found guilty, but his sentence will be read on November 16.Their defence attorneys said they would appeal.
The accusations against two other defendants, Báez's personal assistant and former Baninter vicepresident Vivian Lubrano, as well as the secretary of the Baninter Board of Directors Jesús M. Troncoso, were dismissed for lack of evidence.
Supporters
Friends of Báez Figueroa, groping to explain the shortcuts he took in running BANINTER, pointed to his political connections and a lack of competent managers at the bank. Báez Figueroa's lawyer, Marino Vinicio CastilloMarino Vinicio Castillo
Marino Vinicio Castillo Rodríguez, better known as Vincho, is a prominent Dominican lawyer, and controversial figure in Dominican politics...
, said in an interview that the whole affair had been trumped up for political reasons, and that the claim that RD$55 billion had been embezzled was "a fable." Castillo went on to say that "very dark interests within the government that are blinded by ambition" were behind his client's imprisonment. He accused the government of wanting to dismember BANINTER and divide the spoils. PricewaterhouseCoopers
PricewaterhouseCoopers
PricewaterhouseCoopers is a global professional services firm headquartered in London, United Kingdom. It is the world's largest professional services firm measured by revenues and one of the "Big Four" accountancy firms....
had audited Baninter's books for years and approved them "without any reservations," Mr. Castillo said.
His defenders also say former President Mejía saw Báez Figueroa as a threat to his personal wealth and political influence and to Mejía's ambition to win another term in office. Taking control of BANINTER's media properties and using them to win over public opinion, not cleaning up a scandal, was what the government was after.
Even after his arrest Báez Figueroa remained a central figure in the country's elite, readily accessible even in jail. Within days of his arrest, he received visits from president Leonel Fernández and Hatuey de Camps, then president of the Dominican Revolutionary Party
Dominican Revolutionary Party
The Dominican Revolutionary Party is one of the main political parties of the Dominican Republic. It has a moderate centrist position, social democratic in name. The party's distinctive color is white....
.