On
March 4, a brief statement was sent to the customers of BBA Bank N.V. in Aruba.
The owners reported that they had made the decision to liquidate the entity by
July 15. “The bank faced several challenges in the environment of the
international financial community that blocked its growth. Other personal issues
also played a role in the voluntary decision to suspend the bank’s operations.”
They promised to return the customers, mostly Venezuelan, the money deposited
before closing.
The
event shook the island because, in addition, the US government denied a visa to
one of the owners of the bank for alleged activities related to terrorism,
according to the Venezuelan journalist based in Miami, Casto Ocando.
For
the second time in less than five years, brothers Leopoldo and Andrés Castillo
Bozo faced the forced closure of a financial enterprise.
Aruba
was the port of disembarkation of the owners of Grupo Banvalor — made up by
Corporación Castillo Beltrán C.A., Seguros Banvalor C.A., Banvalor Banco
Comercial C.A., and Banvalor Casa de Bolsa C.A. — just a month after having been
summoned in February 2009 by the Venezuelan Public Prosecutor’s Office, to
charge them with the crimes of simulation of stock exchange operations,
fraudulent acquisition of foreign exchange and conspiracy.
The
event occurred when after the sale of bonds of PDVSA and the Republic in
dollars, the Castillos designed, between 2006 and 2007, a scheme to have more
dollars awarded. They made purchase requests on behalf of 1,000 employees, while
they were allegedly unaware. After the complaint of those affected, the
authorities discovered operational irregularities in the bank and the insurance
company, including, an unusual illiquidity inexplicable for a group managing
insurance contracts as coveted and millionaires as those of the Ministry of
Education and several state governments.
The
opening of the BBA Bank of Aruba was publicized as the first performance of the
group in international operations. Former Prime Minister of Aruba, Nelson
Oduber, and the then deputy of the Podemos party, Juan José Molina attended the
opening. However, the Panama Papers reveal that the Castillo Bozo brothers
already had a secret business structure in the Virgin Islands, made up of three
companies. And what was thought to be the first step of an expansion towards
Caribbean markets was simply the continuation of an offshore undertaking carried
out in the past.
No
commercial or administrative activity is known of any of the companies in the
Virgin Islands. They were registered between 2003 and 2005, more than 10 years
ago, just at the time when entrepreneurs skillfully navigated through the new
waters of Venezuelan politics, led by Alfredo Peña, Juan Barreto, Eduardo
Manuitt, and Aristóbulo Istúriz.
To
create the offshore platform (outside of the Venezuelan jurisdiction), the
Castillos used the services of the Mossack Fonseca law firm in Panama. With that
leverage and expertise, Solitaire Group Limited, Flamingo Group Holdings Corp.,
and Sandbox Invest became a commercial base that the brothers maintained active
until at least 2012, according to the law firm’s documents, always with the same
headquarters on Francis Drake Street in Road Town, the capital of Tortola, one
of the Virgin Islands. The last two companies have “mirrors” (related companies
with similar name) in Miami (United States), with the same headquarters and with
unknown business activity.
Having
set up a space abroad, possibly allowed them to quickly flee the country and
settle abroad, when the Venezuelan Prosecutor’s Office knocked on their
doors.
Falling and Running
The
turning point to the Castillo Bozo brothers began in July 2007, when the
Ministry of Education withdrew one of the most bulky policies, coveted by
Venezuelan insurers.
The
ministry had become the cornerstone of the financial group. “That insurance is
one of the most lucrative in Latin America, because official deposits are
received at a savings rate that insurers then place in a public market at a
lending rate. The business is colossal,” said economist Francisco Faraco.
Specialists indicate that the amount of the policy was around 100 million
dollars. The Castillo Bozos also had the policies of the government of Monagas,
Miranda and Carabobo. At the best moment, Seguros Banvalor and Banvalor Bank had
4 million clients combined.
After
that massive withdrawal, Seguros Banvalor did not recover. The employees of the
entity filed a claim against the directors, the same as the subsidiary bank,
Banvalor. Shortly after, in 2009, a financial mini-crisis exploded. “Those banks
formed with Grupo Banvalor the operative platform of Alejadro Andrade, Treasurer
of the Nation, in the purchase of Pdvsa bonds that were then traded in the black
currency market, generating extremely high profits,” added Faraco. The former
treasurer, now in the United States of America, would have favored the group
with direct awards of bonds and structured notes.
The
withdrawal of the policy of the Ministry of Education and the subsequent
allegations of identity theft of the employees seem to have been the necessary
fuel for the group to move quickly from the country. A part of the new venture
was made with stealth and the other with publicity. According to the Public
Registry of Panama, from 2007 to 2010 (when Seguros Banvalor was intervened),
the Castillo Bozos opened 13 companies, of which no business activity is known.
One of them has a name similar to the other one in Delaware (USA), a state that
receives large revenues through the registration of companies with tax
facilities, and recognized worldwide as a tax haven. Two other operations
received extensive publicity: the opening of Seguros BBA Corp. in Panama (2008)
and the opening of BBA Bank of Aruba, registered as offshore with the Central
Bank of the island and exclusively aimed at capturing dollars from Venezuelan
customers (2009).
The
13 companies are Joycespace, Maida Enterprises, Beauty Corporation Inc., Kairos
Asesores de Inversiones, Daltrey Properties Inc., Bowman Investment S.A., KYC
Ltd S.A., MBH Ltd S.A., Hiven Consultants Inc., Twin Shine Corp, Dream Rock
Corp, Teller Enterprises, and Mercury Star.
When
Seguros Banvalor was intervened by the Venezuelan government in January 2010,
neither Leopoldo nor Gabriel, the main directors, were in the country. Even with
an Interpol alert on their backs, the network built since 2003 with the help of
the Mossack Fonseca law firm gave them the security necessary to turn the page
of the country and continue with the open face of the Caribbean expansion. From
January 2010 to October 2013, Leopoldo and Gabriel Castillo Bozo opened 6
companies related to the insurance, banking and finance sector in Panama
(Seguros BBA Corp. and Financiadora Inversolution), the Dominican Republic
(Banco Atlántico and Atlántico CCA Valores) ,and even the United States of
America (BBA Capital NYC).
Just
after leaving the country, Leopoldo Castillo defended his career in an interview
with the newspaper El Mundo Economía y Negocios. “The first thing I want to
clarify is that the insurance company in Panama has nothing to do with the
insurance company in Venezuela, and the bank in Aruba does not have anything to
do with the bank in Venezuela,” he said. He argued that the intervention of his
entities was a political retaliation, implying that it was due to the fact that
he provided collective insurance to opposition state governments, namely Miranda
and Carabobo.
As
to the criticism of policyholders who claimed reimbursement with more than a
year past due, he said: “I manage a million and a half clients. Five or ten
complaining is not significant to me. They must be specific cases where some
documents are missing… I am not the Baby Jesus, nor do I intend to be. But I
am a correct person. I do not steal anything from anyone.” An interview request
made by email to Leopoldo Castillo was accepted by an assistant in the Dominican
Republic, but could not be done by the time of the publication. The possibility
for have his statement is
open.
Source link : https://armando.info/en/castillo-bozo-brothers-the-caribbean-redenomination-of-grupo-banvalor/
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Publish date : 2016-04-06 03:00:00
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