The Choice Bank saga never ends

The Choice Bank saga never ends

By Giovanni Caporaso Gottlieb, Panama’s Attorney at Law

The nightmare for the account holders of the Choice Bank of Belize, placed in forced liquidation by the Central Bank of Belize doesn’t appear to have an end in sight, once again showing the incompetence of the Central Bank and the Liquidator.

The matter has been badly managed since the beginning seeing that the bank was placed in liquidation with the cancellation of its license on June 29, 2018, without going through a controlled administration that allowed the authorities to take the actual pulse of the situation.

The current Liquidator is the third, seeing that on July 22, 2019 Mr. Kareem Michael, Sub-director of the Central Bank of Belize of Belize has replaced Mr. Cedric Flowers who, in turn, replaced henry Hasse, who quit just a few days after his nomination.

Now, the bank and the account holders’ money is completely in the hands of the Central Bank Gang commanded by the Governor Ambassador A. Joy Grant who is supported by the Prime Minister and the Minister of Finance, Mr. Dean Barrow. This Gang has been able to put 3 banks in liquidation during the last 3 years; now the Central Bank’s task really is to exercise control over the banks. Whose fault is it that 3 banks went “bad”? Or, were they bad and the Central Bank found the way to divide a few cakes?

A few facts:

  1. A balance from the bank was never published after it was put into liqudation, nor was a public auction of its assets ever held; nor has a list of who purchased the bank’s assets been published up to now.
  2. The names of the banks where the Liquidator keeps the money was never revealed.
  3. The account holders were never informed of the expenses of the liquidation operation and how much the Liquidator and his collaborators took from our money.
  4. They never informed us during the period of our claims that they couldn’t make payments in Euros, so many payments were mistakenly sent and are lost. Isn’t this incompetence om the part of a highly placed official of the Central Bank?
  5. A list of countries where they can’t send money was published, including European countries and others who have never been on the blacklist. Who invented this list and with what support?

The Liquidator hasn’t taken the trouble to offer advice  and information to the account holders who requested to receive money in Euros or to countries included in the blacklist.

Is it possible that a liquidator doesn’t know that Euros can’t be sent to an account in dollars?

Is it possible that a liquidator and the Central Bank don’t have contacts for opening an account for returning money from a liquidation?

Now they’re telling us, in the latest update from November 29, that: “Consequently, though the monies held by the Liquidator remain secure, payouts have been suspended.”.

In the following, I’m providing a few excerpts from my correspondence with the Liquidator and his responses.  I asked the Liquidator if money can be withdrawn in cash and he replied: “I am surprised by your suggestion of cash payouts. I believe you above all of Choice's Claimants should be extremely familiar with Anti Money Laundering and Financing of Terrorism Regulations. I guess you do things differently where you are.”. Yes, we definitely do things differently, according to the norms, and a bank can write a check and there is even the option of collecting cash for it! Dear liquidator, the use of cash isn’t prohibited in any country, you just have to investigate its provenance and its destination, and if you still haven’t done it, I don’t understand what the Central Bank has been doing other than put stumbling blocks for depositors in a predicament.

This is how he responded to threats of being taken to court: “To your theory and your repeated statements and threats of court action, let me try to assist you. Recall that the former owners of Choice pursued this course.  All the affidavits are available should you wish to look at them. I am sure you have contacts in Belize that can provide you with these.”. This sounds to me like don’t even try, our legal system is corrupt and they’re always going to lose anyway! And I believe them, this is why I haven’t mistakenly taken this path. I’m certain that, in Belize, where everyone is connected or are family, there is no way to be successful with a demand and that, without having exhausted all legal resources in Belize, you can’t turn to an international court, so that you are certain that they can appropriate the account holders’ money without consequences.

The Liquidator’s defense is insults: “I understand that you are in this for personal gain and really do not have the interest of the depositors at heart. To what end will you continue to spew this rhetoric and false claims”. The Liquidator obviously doesn’t remember that, in addition to representing several clients, I am personally an account holder and a claimant of the bank.

And then, finding himself without an argument, he reaches for justifications: “I have accumulated 56 million and have already begun the process of selling the remaining financial assets of Choice Bank that were severally impaired - toxic if you will. By the way, when you do get your hands on the affidavits, be sure to read that of the mutually agreed international expert and his conclusions that the bank was insolvent. Maybe your perception will change then.”

Mr. Liquidator, let me publicly ask you some new questions:

Why don’t you provide us with all these documents about which you are talking?

Why did you sell all the bank’s property without having a public auction?

Why haven’t you published an inventory and a balance?

Is this the transparency that you are flouting?

To finish, all you need to do is account holders look at the bottom of this article for the update published by the Liquidator and you will see what he has done since his nomination:

  1. He has achieved making the bank correspondent (which ensures that he earns well from transactions, when he has ended the relationship), And why did he do this?;
  2. He achieved suspending payouts;
  3. Ge hasn’t achieved recuperating payments mistakenly made and sent by bad information, in dollars to accounts in Euros;
  4. Subsequently, the Liquidator managed to secure a small custodial arrangement with strict terms and conditions through a foreign agent. This account can only be used to facilitate payments for operational expenses that result from the provision of services by lawyers, IT service providers and other vendors located outside of Belize.”.

What would have happened in a civil country is that everything is open and they would resign or end up in jail, but Belize continues to eat our pie without providing trustworthy information.

Choice Bank liquidator has published on November 29 this update:

On 27  September 2019, Choice Bank  Limited  – In Liquidation (Choice)  was informed  by the correspondent bank of the 2 banks holding the accounts of the Liquidator that all partial payouts (to claimants) on behalf of the liquidation were being suspended subject to further review of the partial payouts that had been processed.

On 15 October 2019, the correspondent bank through which all transactions (payouts, payments for operational expenses and inflows from the marshalling and liquidation of assets) flowed, officially terminated its relationship with the Liquidator. Up to that point, 132 partial payouts for a cumulative value of nearly US $7.6 million had been reported as fully executed.

On 24 October 2019, the Liquidator was asked to provide wire instructions to move the cash balances that were being held in the two subaccounts at this correspondent bank. The two subaccounts totaled approximately US $56 million. This balance remains the same as of the date of this release.

Subsequently, the Liquidator managed to secure a small custodial arrangement with strict terms and conditions through a foreign agent. This account can only be used to facilitate payments for operational expenses that result from the provision of services by lawyers, IT service providers and other vendors located outside of Belize. Also, this account can only receive inflows from the sale of a specific loan asset.

The Liquidator has yet to secure alternative arrangements to allow for the movement of the cash balances from the subaccounts at the correspondent bank. The Liquidator has been in negotiations with escrow agents, payment agents, e-money providers and even card partners as possible alternative solutions to this significant challenge. (Negotiations with banks have not progressed beyond introductions.) The Liquidator has been prudent and cautious during these negotiations so as to ensure that a safe and efficient payment channel is secured for all. Consequently, though the monies held by the Liquidator remain secure, payouts have been suspended.

Central Bank’s Standing Committee received a large number of Objections (Section 113 of the Domestic Banks and Financial Institutions Act.)  after the Schedule of the Actions Proposed for the Winding-up of Choice Bank Limited was filed. Most of the Objections were from corporate clients who were part of a sophisticated card program named First Choice Pay (FCP Program) which was managed and operated by Choice and another card partner. The claims by these corporate clients were initially rejected pending verification. The Liquidator has since commissioned a full scale reconciliation project and all the claims from these corporate clients have now been determined.  These claims will be accepted in full.

The second major task of the reconciliation project involves the determination of amounts not transferred by the card partner of the FCP Program to Choice vis-à-vis that card partner’s claim. The Liquidator intends to do its best to settle this claim soonest. The final list of claimants will be published immediately after.


The Saga from the beginning:

The Central Bank of Belize revokes the Choice Bank’s license

Open Letter to Dean Barrow, Prime Minister of Belize

Open letter by Giovanni Caporaso to Ms. Joy Grant, Governor of the Central Bank of Belize

Choice Bank of Belize: from the frying pan into the fire

Central Bank of Belize does not respond to strong allegations of lawyer Caporaso

The Death of Belize’s financial System

Belize places two offshore banks in forced liquidation

Belize exits from the blacklist of tax havens, but its banking system crisis continues


Do you need a consultancy on this topic?

Book it

Risk warnings
The views and opinions expressed in the web site are subject to change based on the laws, market and other conditions. The information provided does not constitute legal advice and it should not be relied on as such. All material(s) have been obtained from sources believed to be reliable, but its accuracy at the time you read is not guaranteed. There is no representation or warranty as to the current accuracy of, nor liability for, decisions based on such information.

Banana00

localbitcoin_en

Open bank account

offshore company

voguepay

VIABUY_EN

SLP_EN

vaultoro

backlink

Support

Caporaso & Partners Law Office
Avenida Samuel Lewis, Torre Omega, suite 5D.
Panama.

General: [email protected]

Phones
Italy: +39 (06) 993357861
Spain: +34 (93) 1845787
Panama: +507 8327893
Panama: +507 8339512
United States: +1 (305) 3402627

SMS
Italy: +39 3399957837
Panama: +507 68263130

Urgency:
+507 8339512

Customer service from
08:00 - 17:00 (Spanish, english and italian)