Laundering shadow leads to $74 million lawsuit for regulator

Shareholders of the Balboa Bank that was included in a U.S. list of alleged  money launderers with links to drug lords  are suing Panama’s banking regulator  for $74 million  arguing that the institution was negligent in the process of intervention and sale of the bank

The legal appeal admitted by the Third Chamber of the Supreme Court says the Superintendence of Panama Banks (SBP) caused presumptive damages because of the sale price fixing of the bank’s shares.

After the bank was intervened in May 2016 when  included in a list of individuals and companies supposedly linked to asset laundering, in October 2017, the sale of the financial entity was reported, when SBP informed that the completion of the transaction that perfected the Purchase and Sale Agreement between Corporación BCT, S.A. and Balboa Bank & Trust, Corp. and its subsidiaries had taken place.

According to the shareholders, the process of selling the bank was full of irregularities and illegality.

Ramón Martínez, one of the bank’s shareholders, told Prensa.com that “… Balboa Bank had not been fined by the SBP for failures in its control systems for the prevention of money laundering. And of the process of taking control and reorganization that the regulator made, no complaint was filed against directors or officials of the bank for alleged money laundering violations. If the Superintendence gives the U.S. accusations as true, would that imply that the regulator allowed an alleged criminal organization to use the bank for money laundering and never noticed?”.

As a result of the inclusion of both companies in the “Clinton” list drawn up by the US Treasury Department, the respective Superintendents have ordered interventions.

For its part the Administration of Supervision and Regulation of Non-Financial Subjects activated special supervisions in non-financial companies which are listed by the OFAC as part of the network, in this case those operating in Colon Free Zone: Grupo Wisa, S.A., Vida Panama S.A., Servicio de Equipo Rodante Incorporado and Grupo Cima S.A., among others.

A list of people and companies involved in international money laundering includes the brothers Abdul and Nidal Waked, another six individuals, and 68 companies, among which is Balboa Bank.

The businessmen Abdul and Nidal Waked and companies such as Grupo Wisa, Vida Panama and Balboa Bank, have been included in the “Clinton” list which indicates which people and related organizations are linked to money laundering and drug trafficking activities.