Dominican bank execs convicted for fraud

Three banking executives were convicted yesterday for their roles in a 2003 fraud scandal that greatly hurt the Dominican Republic’s economy and political establishment. The former president of Banco Intercontinental and two others face ten years in prison and multi-million dollar fines for their roles in the bank’s collapse due to sweetheart deals with corrupt politicos.

How bad was the “Baninter” collapse to the Dominican Republic? Very bad:

“The defendants, who denied all the charges were charged in May 2003 when then Central Bank governor José Lois Malkún made a speech in which he informed the country about the discovery of the RD$55 billion peso fraud…

The Central Bank took over Baninter in April 2003. The “Financial Hole” (hoyo financiero) created by the bank’s collapse totaled 11% of the country’s GDP and plunged the Dominican economy into a serious crisis.

After announcing the fraud, the government guaranteed Baninter client’s savings, leading to the Central Bank’s so-called quasi-fiscal deficit, which according to official figures exceeds RD$100 billion (close to US$3 billion).”

Sources- Reuters, Dominican Today, International Herald Tribune, Wikipedia

Image- ath.com.do