Series of multibillion-dollar fraud cases in the Dominican Republic
Pedro Castillo, who presided over Banco del Progreso from 1999 until late 2005, was convicted last year. His attorney, Jorge Luis Polanco, said the sentencing was severe, but that it was unclear whether Castillo would file an appeal.

Board members at Banco de Progreso dismissed Castillo in 2005 after evidence of fraud began to surface. The bank was still operating in the early 2000s despite a series of multibillion-dollar fraud cases that led to the collapse of other major banks.

In early 2006, the board accused Castillo of using property and real estate in New York, Florida and Colorado to launder $295 million in funds taken from the bank, its parent group and other businesses. The board later injected $412 million into the bank to keep it afloat.

Fraud allegations against Castillo surfaced a couple of years after several executives with Banco Intercontinental, Banco Nacional de Credito and Banco Mercantil were accused of an estimated total $3 billion in fraud cases. Several of them have been found guilty and ordered to pay tens of thousands of dollars in damages.

The crisis caused high inflation, devalued the peso and plunged the country into economic turmoil. It also helped sweep President Leonel Fernandez into power in 2004 on promises of economic reform.


International Monetary Fund

had intervened with US$695 million in loans, pulling out in August last year when Fernandez was elected to a third term

Go back | Date: 31 Oct 2010
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