Puerto Rico’s Banking Sector Rocked by Fraud Cases: Peter Schiff’s Euro Pacific International Bank at Center of Controversy
San Juan, Puerto Rico - A High-Profile Banking Scandal
A high-profile banking scandal has shaken the financial sector in Puerto Rico, with authorities investigating allegations of fraud and money laundering. At the center of the controversy is Euro Pacific International Bank, established by US financial analyst Peter Schiff in 2017.
Investigation Suspends Operations Pending Further Review
According to a statement from the Joint Chiefs of Global Tax Enforcement (J5), an international agency fighting tax crimes and money laundering, the bank’s operations have been suspended pending an investigation into suspected facilitation of offshore tax evasion and money laundering. The J5, comprised of representatives from the US, UK, Canada, Australia, and the Netherlands, declined to provide further details.
Schiff Defends Bank’s Compliance Measures
Schiff, who has been critical of anti-money-laundering regulations, insists that his bank has never been investigated and that its rigorous compliance measures have been effective in preventing illicit activities. He also claims that a Houston-based bank had expressed interest in acquiring Euro Pacific International Bank and rebranding it to distance itself from the scandal.
Regulators Raise Concerns about Bank’s Financial Situation
However, Puerto Rico’s Office of the Commissioner of Financial Institutions has accused the bank of lacking internal controls, failing to comply with regulations, and being insolvent. The office’s cease-and-desist order revealed that the bank had accumulated losses of nearly $4 million and a negative capital balance of over $1.3 million.
Schiff Assures Customers’ Funds are Safe
Schiff, who has invested $7 million of his own money to keep the bank afloat, insists that all customers will be able to retrieve their funds in full. However, regulators have raised concerns about the high risk posed by the bank’s financial situation.
Case Set for Administrative Hearing on July 7
The case is set to go before an administrative officer on July 7, with the possibility of a new manager being appointed or the bank being liquidated. Schiff has the right to appeal any decision made by the regulator.
Implications for Puerto Rico’s Banking Sector
The controversy has sent shockwaves through Puerto Rico’s banking sector, highlighting concerns about regulatory oversight and the need for greater transparency in financial transactions.
Key Points:
- Euro Pacific International Bank’s operations have been suspended pending an investigation into suspected fraud and money laundering.
- The bank is accused of lacking internal controls, failing to comply with regulations, and being insolvent.
- Peter Schiff has invested $7 million of his own money to keep the bank afloat.
- Regulators have raised concerns about the high risk posed by the bank’s financial situation.
- The case will go before an administrative officer on July 7, with possible outcomes including new management or liquidation.