When Should You Run Your Bank?

BankA few months ago, one of my friends here in Las Tablas told me that the bank she and her husband used here had been shut down by the government and all funds frozen. My first question was, “Do you need help?” and my second one, “Why did it happen?”

She told me they were OK because they had kept their US bank account, so they weren’t going to starve short term. But they had transferred a lot of their reserves here, because they planned to buy a home and so forth. All that money was locked up.

The answer to the “Why?” question was that they weren’t sure. It seemed their bank was under investigation by the Panamanian government for corruption of some kind. Since the new administration of the Panamanian government is quite keen on such activities, that sounded about right. And they expected that in a month or two it would all be settled and they would once again have access to their funds.

That proved true, thank heaven.

But, after it was over for them, I found some interesting information online. It seems that Banco Continental in Honduras recently underwent the same process. And the information included statements that Banco Continental was engaging in money laundering for various drug cartels under the aegis of the “Rosenthal Organization.”

This particular whistle was nicely blown on CentralAmericaData.com in an article October 13, 2015.

The cause is the inclusion of the institution in the list of the U.S Office of Foreign Assets Control, and the freezing of its assets abroad.

Honduras: Drug Trafficking and the Economy
October 2015
Money laundering has positive economic effect on economies, but also impoverishes the quality of institutions leading to dramatic effects on quality of life in society.

The publishers had the kindness to include an org chart, in case you need to vet your acquaintances.

Here are a couple more quotes from the different articles on this topic:

The US Treasury Department has advised that it will not sanction individuals or institutions participating in the liquidation provided that those transactions do not benefit any individual or entity other than those previously identified by the OFAC.

The Office of Foreign Assets Control (OFAC) of the Treasury Department of the United States has issued a statement regarding the decision of the Honduran authorities to liquidate Continental Bank, after identifying the institution and several of its executives as being involved in drug money laundering:

Honduras: Forced Liquidation of Banco Continental
October 2015
It has been announced that deposits up to $ 92,000 (L200,000) per person will be returned, and then payments to employees, depositors and others, noting that “… there are sufficient resources to address them all.”

Translation: If you are one of the good guys and your money was in this bank, don’t worry, the gov won’t take it. It’s just frozen for the mo.

But, just in case you are feeling sufficiently annoyed to contemplate… anything…. please keep the following in mind, per the final remarks in the article:

The excellent analysis by Norma Lezcano in his article on Estrategiaynegocios.net, on the US Treasury Department´s inclusion of members of the powerful Rosenthal family in the list of the Office of Foreign Assets Control (OFAC) can be extrapolated to all Central American countries, and is a warning to the governments of the region, where drug trafficking has ingratiated itself and is creeping through state institutions, weakening them by making them serve criminal aims, and preventing them from carrying out their duties properly.