2024-03-27 20:28:22

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One of the few banks that made it easier for Venezuelans to move money abroad following the United States sanctions is at the center of a controversy, following it closed its doors, leaving hundreds of clients in Miami, Puerto Rico and several countries in He speaks Spanish without being able to withdraw his funds for more than a year.

An estimated $80 million is trapped inside Puerto Rico-based Nodus International Bank, a situation that has sparked a series of lawsuits, at least one of them in Miami, amid accusations that top executives and shareholders have diverted funds. of the bank to enrich themselves instead of returning money to their clients.

“There are not enough words for what I feel,” said Adelaida Cedeño, a 63-year-old Venezuelan businesswoman living in Spain who has regarding $35,000 in the bank. “They kept feeding us lies from the beginning, and now there is not a person to pick up the phone or respond to an email. “I feel like a victim of fraud.”

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Cedeño, who relied on the bank to carry out transactions for his international trading firm, said he is regarding to lose his business and has all his assets accumulated due to the bank’s closure.

Like Cedeño, there are hundreds of Venezuelan citizens, some of them living in South Florida and others abroad, who are still waiting to access their funds following the bank ceased operations just months following receiving a ruling in October 2022 from the United States Department of the Treasury notifying that it had violated Venezuelan sanctions.

Nodus accounts are not insured by the Federal Deposit Insurance Corporation, because it is registered as an international bank in Puerto Rico, a condition that excludes it from the coverage available to banks in the United States.

Founded in 2009, the bank had been run primarily by Venezuelans serving Venezuelan clients, although around 20% of its clientele came from other countries.

The bank had also sought to expand its operations to South Florida and in 2010 established a finance company, Nodus Finance LLC, that made small business loans from an office on Brickell Avenue.

Finding itself unable to operate following running afoul of the Treasury Department in late 2022, the bank shortly therefollowing entered into a liquidation plan under the supervision of the Puerto Rico Office of the Commissioner of Financial Institutions, agreeing to cease operations and operate its license with the sole purpose of liquidating its assets and returning depositors’ money.

But in March 2023, Puerto Rico regulators noticed some strange dealings. The bank had made payments to its own directors and shareholders “incompatible with the liquidation plan” and had entered into transactions with people linked to the bank “that represent a conflict of interest that places Nodus in a dangerous position,” regulators said.

The Puerto Rican commissioner’s office also said that it had “become aware that at least one of the shareholders has been indirectly collecting royalties and/or dividends” to supposedly complete the liquidation, and that “such compensation is not included in the budget of the plan of settlement”.

In an email sent to the Herald, Puerto Rican officials said that in light of the irregularities, the bank’s shareholders have lost their right to actively participate in the liquidation of Nodus International Bank.

Regulators said they are considering “all remedies and sanctions available by law to ensure that actions taken are equitable to the damages suffered by depositors as a result of the diversion of funds.”

Nodus officials declined to answer questions from the Miami Herald.

Most of the people affected were depositors from Latin American countries who believed their money would be safer in an international bank than in a local institution. Most of them had deposited funds ranging from a few thousand dollars to tens of thousands.

Venezuelan clients favored the Puerto Rico-based bank following U.S. sanctions once morest Nicolás Maduro’s regime left them with few options following they began scaring international banks away from money coming from Venezuela.

Carlos Calderón, a lawyer representing several Venezuelan clients of the bank, said the Nodus liquidation process is not what normally occurs in similar cases, because the plan sought to protect the bank’s shareholders first and not the public. “The losers were the account holders,” Calderón said.

While the initial plan presented by the bank offered account holders the possibility of recovering 90% of their deposits, clients now expect to receive much less in light of the recent warning from Puerto Rican regulators regarding the bank’s liquidity problems.

Roberto Hung, another Venezuelan lawyer representing the account holders, said information leaked from a recent meeting in Puerto Rico between authorities and the bank suggests that the account holders will likely be left with even less money than they agreed to. they were originally told.

“Information emerging from the meeting suggests that they are regarding to announce a new liquidation plan that will offer depositors with less than $20,000 their funds at a 30% discount,” Hung said from Caracas. This means that depositors would get 70% of their money back.

Information that emerged from those meetings also suggests that depositors with higher amounts would only receive promissory notes from the bank that would mature following two years. If not paid, depositors would get the bank shares held by the bank’s two largest shareholders.

The lawyer said that if that happened, bank customers who are owed more than $20,000 would only be able to recover regarding 45% of their deposits.

Customers taking legal action once morest Nodus say they have trouble trusting the bank’s willingness to pay their deposits given the treatment they received in the months before the bank closed.

In a lawsuit filed last year in federal court in South Florida, executives at Argentine company B&G said they opened an account at Nodus in December 2022 on the recommendation of a trusted advisor without being aware of the company’s liquidity problems. bank.

About five months before the bank ceased operations, B&G used Nodus to make a wire transfer of $214,000 that the recipient was due to receive the same day, but the money never arrived or was returned.

The bank refused to “provide meaningful responses to dozens of inquiries from B&G regarding why Nodus Bank would not honor its payment instructions,” the lawsuit says.

“This outrageous and unprofessional behavior left B&G directors with no choice but to hire a lawyer and book a flight to Miami to confront Nodus Bank in its back office. On April 17, 2023, B&G directors entered the administrative office of Nodus Bank and demanded answers regarding the refusal to return B&G’s money,” he says.

After being threatened with legal action, bank executives agreed to return the funds, but only returned $150,000 of the initial amount, giving rise to the lawsuit.

“My client is demanding that he be paid the remaining $75,000,” said B&G attorney Alejandro García, adding that “there are people out there who are trying to charge much higher figures.”

This story was originally published March 27, 2024 11:18 AM.

Award-winning journalist with more than 30 years of experience, specialized in covering issues regarding Venezuela. Lover of history and literature.

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