The former chairman of the board at Puerto Rico–based Nodus International Bank, pleaded guilty to conspiracy to commit wire fraud for his role in a $13.6-million scheme that contributed to the institution’s 2023 collapse.
Citing a Sept. 22 announcement from the U.S. Department of Justice, Financial Regulation News reports that Juan Francisco Ramirez and a co-conspirator hid from fellow directors, executives, and the bank’s regulator that certain investments and loans benefited them personally.
The pair directed over $11 million of Nodus funds to a Miami lender, which then funneled the money back to Ramirez and his associate. DOJ officials said the individuals knew the arrangement was illegal and concealed its true nature.
“The defendant abused his position as chairman of the board of directors to fraudulently divert funds from the bank that he had been entrusted to run, resulting in the bank’s collapse,” aid Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division in a statement.
Between January 2018 and September 2021, Ramirez and his co-conspirator also induced Nodus’s board and comptroller to buy at least 47 promissory notes, totaling about $25.3 million, from a finance company the two jointly owned. While the notes purported to finance legitimate borrowers, the proceeds were allegedly used for the conspirators’ personal investments, mortgages, and credit card bills, Financial Regulation News reported.
After Puerto Rico’s Office of the Commissioner of Financial Institutions notified Nodus in March 2023 of its intent to liquidate the bank, Ramirez and his co-conspirator caused Nodus to purchase a $26 million loan portfolio from their Miami finance company. Most of the loans were delinquent, non-performing, or lacked collateral, effectively relieving the finance company’s debt to Nodus, according to Financial Regulation News.
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