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