DOMINICAN BANKING #10: BANCREDITO CIVIL CASES SENT

UNCLAS SANTO DOMINGO 004325 SIPDIS DEPT FOR WHA/CAR (SEARBY/BENT),WHA/EPSC; DEPT PLEASE PASS TO SEC, FEDERAL RESERVE; TREASURY FOR WAFER; DOJ FOR OIA (MAZUREK AND ORJALES) E.O. 12958: N/A TAGS: DR EFIN KJUS PGOV PREL SUBJECT: DOMINICAN BANKING #10: BANCREDITO CIVIL CASES SENT TO TRIAL REF: SANTO DOMINGO 3864 ¶1. This is number 10 in a series of cables on consequences of the Dominican bank failures of 2003: Bancredito Civil Cases Sent to Trial - - - - - - - - - - - - - - - - - - Nearly two years after the Dominican Central Bank first sought to arrest Manuel Arturo Pellerano for bank fraud, Reviewing Judge Pilar Rufino has bound over for criminal proceedings the Pellerano as President and several other officials of the bank and holding company National Financial Group (GFN) for their alleged role in the fraudulent diversion of millions of dollars. The judge acted on six civil cases. The Central Bank's case has been delayed, first by the removal for cause of Anixa Serra de la Mota, the first judge appointed, and later by the promotion of Judge Teofilo Andjura, which took the case out of his hands. Judge Rufino will now examine the Central Bank's case, against which defense lawyers have filed several motions. Individuals or firms that filed the cases allege the loss of varying firms. For case 98-2005, the sum was USD 154,000; for case 99-2005, USD 600,0000; for case 100-2005, USD 66,000; and for case 101-2005, USD 226,000. The largest case 102-2005 for more than USD 3 million, filed by a team of attorneys headed by former Santo Domingo district attorney Virgilio Bello rosa and accusing Pellerano's banking group of laundering money via loans to Pellerano-owned or -associated firms Telecable Tricom, Omnimedia, AFP Siembra, ARS Humano, Editorial AA, En el Punto Dominicana, Mundo Gas, Magna Compania de Seguros, Telecable Nacional, Transglobal de Seguros, Zona Franca San Isidro, Electricity Generating of Haina, Tricom Latinoamerica and others. Accused in the civil cases are Maximo and Manuel Arturo Pellerano, with additional charges leveled against Juan Felipe Mendoza Garcia, Rosangela Pellerano, Crusa Maria Fernandez Abreu, Marina Teresa Carrion de Garrigo, Jean Charles de Mondesert Grullon, Wilfredo Flores Santos, and Maribel Marmolejos. Attorneys for the Pelleranos and GFN attorneys have already begun an aggressive public attack against the charges arguing, inter alia: 1) that criminal liability for the alleged offenses is inappropriate under various articles of the Civil Code, 2) that Rufino lacked proper jurisdiction to forward the case to a criminal tribunal, and 3) the criminal charges are insufficiently detailed and individualized to be valid. For the first time, officers from all three of the banks involved in fraud and failures in 2003 now face cases that have emerged from the preliminary examination stages. Central Bank authorities tell us they are pleased with this progress and attribute the lengthy delay in the initiation of criminal prosecution simply to the complexity of the cases. -- Drafted by Michael Garuckis, Michael Meigs. ¶2. This report and others in the series are available on the classified SIPRNET at http://www.state.sgov.gov/p/wha/santodomingo. KUBISKE