Bank Embroiled in Fraud Case Loses Licence to Operate in Belize

BELMOPAN, Belize, Thursday April 18, 2019 – The Belize government has revoked the licence of an international bank which is embroiled in a fraud case in the United States involving property in the Caribbean Community (CARICOM) nation.

The decision to revoke the banking licence of Atlantic International Bank Limited (AIBL) was taken on the recommendation of the Central Bank of Belize, five months after the US Federal Trade Commission (FTC) named the bank as a defendant in a case involving alleged fraud related to certain transactions for the sale of land in a property development known as Sanctuary Belize. That legal situation unfolded on November 8, 2018 and the FTC sought and obtained a temporary restraining order against certain of the bank’s liquid assets in the United States.

The Central Bank says AIBL has experienced challenges meeting its liquidity requirements, due, it appears, to the reputational damage caused by being named in the FTC proceedings. It experienced an unusual and increasing level of withdrawal requests, which led to customers facing extended delays in accessing their funds, which in turn led to a worsening of the bank’s liquidity position.

In response to those challenges, the Central Bank placed AIBL under enhanced supervision on November 13, 2018, and subsequently issued two sets of remedial actions aimed at preserving the bank’s capital. The Central Bank said it closely monitored the execution of these actions through increased reporting requirements and continuous dialogue.

Then last month, AIBL’s Board of Directors informed the Central Bank of a worsening liquidity position and the resignation of its Chief Executive Officer, Ricardo Pelayo, and expressed the view that Central Bank’s intervention was required.

To safeguard the interest of depositors, customers, and other stakeholders, the Central Bank said it immediately escalated its oversight regime and undertook a special on-site examination to assess AIBL’s financial position. The assessment revealed that the bank’s liquidity position continued to worsen.

“The Central Bank determined that Atlantic International Bank Limited was no longer viable and continues to work diligently towards timely winding up of Atlantic International Bank Limited in accordance with the statues provided under Part XI of the Domestic Banks and Financial Institutions Act,” it said.

“The Central Bank has appointed a liquidator, Mr. Julian Murillo. He will have full power and authority over the operations of Atlantic International Bank Limited as prescribed under the Laws of Belize…After the liquidation of the bank’s assets, Murillo will move to distribute these assets in a fair and equitable manner in accordance with the legal priorities.”

This is the second bank in the international banking sector to have its licence revoked in the last ten months. In both cases, albeit for different reasons, the situations were made untenable due to actions that originated outside of Belize.

“The Central Bank reminds the public that it has a mandate to protect depositors and it is taking steps to do so. Further, the Central Bank continues to be extremely vigilant in its oversight responsibilities to ensure that Belize’s financial sector remains vibrant,” the Central Bank statement said.

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