The battle for the bank is said to be secretly led by Venezuela
The legal battle for control of a Miami bank allegedly secretly run by the Venezuelan government is heating up, following efforts by its original owner to take over the reins from the bank’s parent company in Curacao.
The original owner, Venezuelan-American businessman Juan Santaella, previously sued members of the Eastern National Bank board, including Gabina Rodríguez, who chaired the board between 2015 and 2021. claims it took control of ENB after being appointed by the Venezuelan government in 2009 as a stakeholder in the bank’s parent companies, Venezuela-registered Corpofin and Curacao-registered Mercorp.
The lawsuit filed in January in federal court in South Florida alleges that the small Miami bank was controlled by Venezuelan leader Nicolas Maduro through Rodriguez, and that the socialist regime in Caracas used it to escape US sanctions.
“Gabina Rodriguez, as an agent of the Maduro regime, wields unchallenged control over the eastern board. Even though Gabina Rodriguez is no longer a board member following the 2020 consent order, she (and therefore the Maduro regime) remains the sole control of ENB due to the appointment by the Venezuelan government. of Gabina Rodriguez as receiver of Corpofin, which wholly owns Mercorp, which in turn owns more than 99% of the shares of ENB,” the lawsuit said.
But Santaella took control of Mercorp and replaced Rodriguez with Juan Jose Caso as director of the Curacao-based holding company, sources close to the plaintiff told the Miami Herald.
The sources said the change was approved at a meeting of Mercorp shareholders and Caso’s name currently appears as the company’s statutory director in the island’s commercial register.
Santaella originally purchased the Hialeah-headquartered bank in the 1980s, but lost control following the 1994 Venezuelan financial crisis, which led to the demise of several Venezuelan banks, including Bancor, a major bank owned in Santaella. The Venezuelan government eventually took over Bancor and Eastern’s parent company, Corpofin, and the small US bank has been under state control ever since.
Eastern National Bank has nearly $260 million in assets and four branches in South Florida, including Miami, Hialeah and Doral.
In a written statement sent to the Miami Herald, Eastern management said there was no doubt that Mercorp NV was Eastern’s majority shareholder. But the statement said that “there is now a dispute over who controls Mercorp and whether any purported recent change in control and management was authorized or carried out in accordance with the laws of the United States, Curacao and Venezuela.”
“In response, the bank has been in communication with its federal regulators … for their input. Until the Bank receives clear direction from its regulators, the Bank is at risk of violating U.S. banking and sanctions laws and is therefore precluded from taking further action regarding these requests at this time,” he said. declared.
The bank previously categorically denied being under the control of the Maduro regime, saying it was a lie propagated by Santaella.
“This is patently false and ignores the reality that Eastern is a licensed financial institution in the United States operating for 53 years under the supervision and approval of US regulators. Eastern has obtained the required approvals and authorizations from [U.S. regulators] to operate legally in the United States and continues to work to effectively serve the South Florida community,” the bank said in a statement released in August.
The US government has imposed a series of sanctions against the Venezuelan regime and dozens of its leaders, accusing them of destroying Venezuelan democracy, being involved in numerous corruption schemes and turning the country into a drug-trafficking state. .
Sanctions imposed by the Treasury Department’s Office of Foreign Assets Control prohibit companies and citizens under U.S. jurisdiction from doing business with Venezuelan state officials and specified persons and entities, unless they hold special licenses from the Treasury.
In documents presented to the court, the defendants acknowledged that the bank’s shareholding composition is unique, but said that this does not mean that it is under the control of the Caracas regime and stressed that the bank has obtained the necessary authorization from the Treasury to operate in the United States under the current ownership structure.
Santaella disagrees. In the lawsuit filed earlier this year, he claims that Rodríguez’s relationship with the Maduro regime is clearly defined in the fact that the regime named her in 2009 as a recipient of Corpofin, granting her full control at the time. from Mercorp.
This gave Rodriguez the power to appoint herself as the sole chief executive of Mercorp, who in turn owns the majority of shares in Eastern, and therefore has the votes – unless voting rights are restricted – necessary to elect the Eastern board members, the lawsuit claims.
Rodríguez had a long career as a Venezuelan civil servant for nearly 30 years, working at the Banco Industrial de Venezuela in 1993, the Comptroller General of the Republic from 1993 to 2002, and the Ministry of Transport and Communications.
The complaint claims that Eastern helped the regime maintain access to the international financial system after “all US banks” terminated correspondent banking relationships with Banco de Venezuela.
The move then caused problems for the bank after the Comptroller of the Currency, an independent Treasury office, informed Eastern in 2018 that it had detected a series of shortcomings in anti-money laundering practices and others related to banking secrecy rules related to operations involving Banco de Venezuela accounts.
In the notice, the office said it had identified 10 account relationships for which there was “insufficient due diligence information,” the lawsuit says.
The comptroller ordered, among other things, Eastern’s board of directors to appoint a compliance committee consisting of three directors, two of whom could not be employees, officers or shareholders of the bank.
According to the lawsuit, the bank’s directors failed to take appropriate corrective action, which was highlighted by the Comptroller’s Office itself in another warning issued in 2020.