Financial Crime World

Dominican Tycoon’s Banking Scandal: Banco Intercontinental’s $2.2B Fraud Unraveled

Background and Expansion of Banco Intercontinental (BANINTER)

  • Founded in 1986 by Ramón Báez Romano
  • Headed by Ramón Báez Figueroa since, controlling BANINTER Group
  • Media conglomerate, including:
    • Listín Diario
    • Four television stations
    • A cable television company
    • Over 70 radio stations

Seizure of BANINTER and Charges of Fraud and Money Laundering

  • April 2003: Dominican government seized control
  • Former president, Ramón Báez Figueroa, arrested
  • Vice presidents Marcos Báez Cocco and Vivian Lubrano de Castillo, Secretary Jesús M. Troncoso, and Luis Alvarez Renta also arrested
  • Alleged fraud: over $2.23 billion (RD$55 billion Dominican Pesos)

Banking Crisis and Consequences

  • Government bailout caused:
    • 30% annual inflation
    • Large poverty increase
    • Forced peso devaluation
    • Collapse of two other banks
  • IMF loan package: US$600 million (420 million €)

Unrestricted Depositor Payments and Consequences

  • Against Monetary Laws, Dominican Central Bank (Banco Central Dominicano) guaranteed all deposits, regardless of their size, currency or location
  • Resulted in massive fiscal shortfall
  • Triggered high inflation (42%), DOP devaluation by over 100%, and austerity measures/tax increases

Trial and Aftermath

Testimonies and Civil Cases

  • Rafael Acevedo, TV commentator and president of Gallup Dominicana, testified in 2005
  • Luis Alvarez Renta found liable for racketeering and money transfers in Miami federal court
  • Ordered to pay $177 million to the Dominican state

BANINTER Executives on Trial

  • Scheduled to commence in April 2006, postponed due to scandals
  • Main executives (Báez Figueroa, Marcos Báez Cocco, Vivian Lubrano, Jesús Troncoso Ferrúa, and Alvarez Renta) faced fraud, money laundering, and other charges

The Culture of Corruption

  • Scandal involved complicity from various societal levels: government, media, church, military
  • Financial gatekeepers failed to detect the fraud for 14 years, revealing the prevalent culture of gift-giving and favor-swapping between the private sector and top government officials in the Dominican Republic.

Unresolved Issues

  • Trial postponed multiple times, and its ultimate resolution remains uncertain. Stay tuned as the story unfolds in the Caribbean nation.