The legal news from Curacao provides yet another indication that Venezuela is the undisputed king of corruption in major leagues. Andrade Gutiérrez, not necessarily the cleanest of operators as exposed in the Lava Jato scandal, has taken Banco del Orinoco NV (BdO) of Víctor Vargas to court. The reason, if our interpretation is correct, is that Andrade paid BdO $2,150,000 as collateral for a parallel loan given to Constructora Andrade in Venezuela, through Vargas’s Banco Occidental de Descuento (BOD). Constructora Andrade reimbursed the loan to BOD in Venezuela, but unfortunately faced difficulties when it went to BdO in Curacao to recover the collateral.
Andrade filed a case against BdO, and the court granted a default judgment in favor of Andrade. Vargas’s BdO did not appear. A communication to the relevant authorities has been leaked to this site (see below). This suggests that Vargas’s investment portfolio of over a billion dollars, which would support his bank operations throughout the Caribbean, simply does not exist.
We reached out to the court in Curacao for confirmation, and they kindly sent over the ruling on Andrade’s case (pdf), adding that a verdict will be announced on October 26.
Communication from the representatives of the aggrieved parties.
We are a group of lawyers and accountants representing clients of Banco del Orinoco, N.V. (BdO). We deliberately omitted our clients’ names and our identifiers to avoid reprisals from BdO against them. It’s important to mention that in the past, when clients filed claims or legal actions against BdO, the UBO of this financial institution, Mr. Víctor Vargas, ordered the closure of all relevant clients’ bank accounts across the BOD FINANCIERO GROUP, cancelled their credit cards, and took other similar illegal actions against the claimants, including unfounded criminal proceedings against them. You should know that BdO is run by an “International Criminal Gang” consisting of Mr. Víctor Vargas, Mr. Raúl Baltar, Mr. Iván Hernández, Mr. Domingo Infante, Ms. Careli Valentín, Mr. José Escudero, Ms. Jasmir Pineda, Mr. Héctor Caraballo, and Mr. Santos Alonso.
a) Relevant Facts
Over the past three years, many BdO clients, an international bank operating in Curacao and under its supervision, have filed claims and legal actions in Curacao courts and with the Central Bank. In all those cases, the clients suffered significant damages from the costs and legal fees they had to pay to recover their money. Additionally, they lost business opportunities, contracts, real estate options, and other deals, and in some cases clients were forced to forego medical treatment because their money is illegally withheld by BdO, compromising their health and even their lives. We know that a few months ago the Centrale Bank took action, placing BdO under close supervision. However, the issues are worsening, and the measures taken by the Centrale Bank are not sufficient or appropriate to address the dangerous situation we are facing in this case.
As the financial supervisory authority of Curacao and Sint Maarten, the Centrale Bank has the power to investigate and uncover the real problem behind the claims from BdO clients. As a result of such a large number of claims and legal actions, a special audit procedure has had to be carried out to determine what is really happening with BdO. However, it has repeatedly missed the point, focusing its efforts on the wrong issue: the delay and/or lack of execution of bank transfers.
From reliable insider information, we know the problem is much larger. Some of our sources state that BdO has reported an investment portfolio of over a billion dollars. However, the lack of liquidity of the Bank is evident, and the Centrale Bank is aware of it. The investment portfolio does not exist, and the confirmations provided by supposed custodians are all false.
Our sources also indicate that the liquidity issue may be due to two different causes: either BdO has simply lost its investment portfolio, or that portfolio has been pledged and then lost. In both scenarios, the situation is quite alarming, as it means that the Centrale Bank and independent auditors are unaware of something they should have known long ago, acting accordingly to protect the funds entrusted to BdO by depositors.
Therefore, it appears that BdO is bankrupt and is paying withdrawals and electronic transfers with deposits from new clients, like in the infamous Ponzi and Madoff schemes, or has utilized its partner Bank BOD to acquire funds from illegal currency exchange transactions in Venezuela.
If this is the real situation, we would like to ask what kind of supervision the Centrale Bank and BdO’s auditors have conducted.
Have they ever asked the custodians of the bonds for a confirmation regarding the existence, composition, and realized or unrealized losses of BdO’s investment portfolio? Is the Centrale Bank absolutely certain that BdO has a diversified investment portfolio? Have they ever spoken with the bank’s auditors? Have they ever inquired with their counterparts in Antigua & Barbuda, the Financial Services Regulatory Commission, about the situation of Víctor Vargas’s bank there (BOI BANK CORPORATION)?
We know from reliable insider information that the situation is similar or worse, so we would like to ask what conclusion you could draw from this. From our standpoint, based purely on facts, both banks are in a critical situation because they have no assets to return depositors’ money.
A very reliable source indicates that a team of senior executives and financial and legal advisors from BdO (the aforementioned Criminal Gang) intentionally manipulated the books and financial statements, which is a criminal act.
We understand that making this information public would be a disaster for BdO and also for the financial system in Curacao; however, acting on behalf of our clients and following their instructions, we can no longer tolerate the current authorities of BdO (the Criminal Gang) continuing to deceive clients and misusing their money. We are ready to act in the short term to put an end to this dangerous and illegal situation.