PNB fails on laundering
After that on March 23, 2011 the Pacific National Bank or PNB (Part of the Banco Pacifico Ecuador) failed to establish and maintain procedures to ensure control of money laundering, according to the Office of the Comptroller of the Currency (OCC) of the U.S., has determined that as a result of the violations in this area, the institution shall pay a fine of $ 7,000,000, plus individual penalties for their managers.
Additional to that, as required by the OCC and the Federal Reserve, the Bank must be sold until next March, otherwise it will be liquidated and to complete the sale, all of its shares were transferred to a trust managed by an independent trustee in the U.S., which is controlled by regulators.
Why the Ecuadorian government is forced to sell the PNB?
The intitution’s decision was due, according to communications between the National Finance Corporation (CFN for its Spanish acronym) and the Ministry of Finance, to the changing of the banks’ shareholders, i.e., the transfer of shares to the National Finance Corporation, settled in November 2011 by the Government.
It should be noted that the transfer of the shares from the PNB to the CFN was one of the first decisions taken by Pedro Delgado, during his recently elected charge as president of the Central Bank.
Andres Baquerizo Barriga, chief executive of the bank, indicated that a possible reference price for the sale would be the Pacific National Bank’s assets as reflected in the balance of the month of June 2012, or approximately $ 300 million.
The PNB’s anomalous dealings date back to 2008. Carl Wolf, then head of PNB in Miami, filed a lawsuit against the same entity. The PNB fired Wolf for refusing to reopen hundreds of accounts that did not comply with U.S. regulations.
Contrary to the institutional dispositions, Wolf ordered the closure of 2.008 accounts which did not comply with anti-money laundering regulations. In declarations with the Miami Herald, Wolf confessed being under pressure from Pedro Delgado Campaña, who insisted in launching a plan to reopen the accounts, which one of them belonged to Cassia Delgado, relative and Rafael Correa’s private secretary between 2007 and 2008.
Delgado, who is now a fugitive from Ecuadorian justice at Miami, denied any pressure.