Banco Latino
Encyclopedia
Banco Latino was a Venezuela
n bank
based in Caracas
, and at the time of its 1994 failure was the country's second largest. It had a good relationship with the government, such that ministries moved their accounts to the bank, and the army and the state-owned oil company PDVSA entrusted their pension funds to Latino trust managers. Latino built a new high-rise headquarters, and expanded aggressively, both within Venezuela and overseas.
Failed ventures in real estate and stock market investment saw it desperate to raise funds from depositors, and in 1993 it paid 105% interest on one-year certificates of deposit, more than double Venezuela's 1993 inflation rate of 46%. Between October 1993 and January 1994 it experienced a bank run
, and was then taken over by the government; its operations were ultimately acquired by Interbank
. Within weeks of the government takeover, arrest warrants had been issued for 82 of its directors and managers. Four months later, only 6 had been apprehended, with the rest believed to have escaped abroad. These included Bank Conglomerates, Gustavo Cisneros, Edwin Acosta-Rubio and Gustavo Gomez Lopez who were the bank top excecutives. The New York Times reported in 1994 that
According to Thor Halvorssen Hellum
, an attempt was made on his life shortly after receiving information from an informant that Banco Latino was involved in money laundering
, including of drug money.
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
n bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
based in Caracas
Caracas
Caracas , officially Santiago de León de Caracas, is the capital and largest city of Venezuela; natives or residents are known as Caraquenians in English . It is located in the northern part of the country, following the contours of the narrow Caracas Valley on the Venezuelan coastal mountain range...
, and at the time of its 1994 failure was the country's second largest. It had a good relationship with the government, such that ministries moved their accounts to the bank, and the army and the state-owned oil company PDVSA entrusted their pension funds to Latino trust managers. Latino built a new high-rise headquarters, and expanded aggressively, both within Venezuela and overseas.
Failed ventures in real estate and stock market investment saw it desperate to raise funds from depositors, and in 1993 it paid 105% interest on one-year certificates of deposit, more than double Venezuela's 1993 inflation rate of 46%. Between October 1993 and January 1994 it experienced a bank run
Bank run
A bank run occurs when a large number of bank customers withdraw their deposits because they believe the bank is, or might become, insolvent...
, and was then taken over by the government; its operations were ultimately acquired by Interbank
Interbank
Interbank is a Peruvian provider of financial services.-History:In 1897, Elias Mujica opened an agency at Jiron de la Union in Lima's historical center under the name of Banco Internacional...
. Within weeks of the government takeover, arrest warrants had been issued for 82 of its directors and managers. Four months later, only 6 had been apprehended, with the rest believed to have escaped abroad. These included Bank Conglomerates, Gustavo Cisneros, Edwin Acosta-Rubio and Gustavo Gomez Lopez who were the bank top excecutives. The New York Times reported in 1994 that
Late last fall, when Banco Latino officials began to realize that their house of cards was collapsing, they started transferring hundreds of million of dollars overseas. In the final frenetic days, one bank director foresaw judicial orders on freezing assets and sold his million-dollar mansion, Another officer, Folco Falchi, the bank's coordinator for international investments, was reportedly seen loading suitcases stuffed with dollars into his corporate jet on the Caribbean island of Curacao.
After the authorities padlocked Banco Latino on Jan. 14, bank officers, operating from offshore refuges, entered the bank's computer elecronically with a modem and erased and altered thousands of records.
According to Thor Halvorssen Hellum
Thor Halvorssen Hellum
Thor Halvorssen Hellum —commonly known as Thor Halvorssen—is a Venezuelan-Norwegian businessman who served as CEO and President of the Venezuelan state-owned telephone company, CANTV and later as Special Commissioner for International Narcotic Affairs in the administration of President Carlos...
, an attempt was made on his life shortly after receiving information from an informant that Banco Latino was involved in money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
, including of drug money.
External links
- R. Del Naranco (1997), The Card Joker: Or the Story of a Bank Management Style, Editorial de Investigaciones Periodisticas