Bank Embroiled in Fraud Case Loses Licence to Operate in Belize

BELMOPAN,
Belize, Thursday April 18, 2019

– The Belize government has revoked the licence of an international bank which
is embroiled in a fraud case in the United States involving property in the
Caribbean Community (CARICOM) nation.

The decision to revoke the banking licence of Atlantic International Bank Limited (AIBL) was taken on the recommendation of the Central Bank of Belize, five months after the US Federal Trade Commission (FTC) named the bank as a defendant in a case involving alleged fraud related to certain transactions for the sale of land in a property development known as Sanctuary Belize. That legal situation unfolded on November 8, 2018 and the FTC sought and obtained a temporary restraining order against certain of the bank’s liquid assets in the United States.

The
Central Bank says AIBL has experienced challenges meeting its
liquidity requirements, due, it appears, to the reputational damage caused by
being named in the FTC proceedings. It experienced an unusual and increasing
level of withdrawal requests, which led to customers facing extended delays in
accessing their funds, which in turn led to a worsening of the bank’s liquidity
position.

In
response to those challenges, the Central Bank placed AIBL under enhanced
supervision on November 13, 2018, and subsequently issued two sets of remedial
actions aimed at preserving the bank’s capital. The Central Bank said it closely
monitored the execution of these actions through increased reporting
requirements and continuous dialogue.

Then
last month, AIBL’s Board of Directors informed the Central Bank of a worsening
liquidity position and the resignation of its Chief Executive Officer, Ricardo
Pelayo, and expressed the view that Central Bank’s intervention was required.

To safeguard the interest of
depositors, customers, and other stakeholders, the Central Bank said it immediately
escalated its oversight regime and undertook a special on-site examination to
assess AIBL’s financial position. The assessment revealed that the bank’s
liquidity position continued to worsen.

“The
Central Bank determined that Atlantic International Bank Limited was no longer
viable and continues to work diligently towards timely winding up of Atlantic
International Bank Limited in accordance with the statues provided under Part
XI of the Domestic Banks and Financial Institutions Act,” it said.

“The
Central Bank has appointed a liquidator, Mr. Julian Murillo. He will have full
power and authority over the operations of Atlantic International Bank Limited
as prescribed under the Laws of Belize…After the liquidation of the bank’s
assets, Murillo will move to distribute these assets in a fair and equitable
manner in accordance with the legal priorities.”

This
is the second bank in the international banking sector to have its licence
revoked in the last ten months. In both cases, albeit for different reasons,
the situations were made untenable due to actions that originated outside of
Belize.

“The Central Bank reminds the public that it has a mandate to protect depositors and it is taking steps to do so. Further, the Central Bank continues to be extremely vigilant in its oversight responsibilities to ensure that Belize’s financial sector remains vibrant,” the Central Bank statement said.

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