The former Chief Executive Officer of Nodus International Bank (Nodus Bank), a Puerto Rican international bank, pleaded guilty yesterday for leading a scheme to fraudulently obtain at least $24.9 million from Nodus Bank and conspiring to evade U.S. sanctions against Venezuela. “The defendant abused his position as CEO, turning the bank he managed into his own personal ATM and unlawfully transacting with a sanctioned individual,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division.
Key details of the case
“The defendant’s crimes undermine the integrity of our financial system, threaten economic prosperity, and harm national security. The Criminal Division will investigate and prosecute fraudsters to protect financial markets and promote safety and prosperity for all Americans.”. “This defendant used his position as CEO to siphon more than $24 million, hide conflicts of interest.
Moreover, help drive the bank’s collapse,” said U.S. Reding Quiñones for the Southern District of Florida. “The scheme also involved efforts to evade U.S. sanctions tied to Venezuela’s state-owned oil company, PDVSA.
Meanwhile, as a career prosecutor and former state trial judge, I’ve learned that following the money reveals the truth. Here, it exposed both fraud and sanctions violations. We will hold accountable anyone who abuses our financial system for personal gain.”.
Enforcement actions and official statements
In addition, “Corporate titles don’t place anyone above the law,” said Ron Loecker, Special Agent in Charge, IRS Criminal Investigation, Florida Field Office. “Executive level fraud has real victims, and yesterday’s outcome is a step toward restoring accountability and confidence in the banking system. IRS Special Agents, alongside our partners, will keep bringing transparency to complex financial crimes and delivering results.”.
As a result, according to court filings, Tomás Niembro Concha, 64, of Miami, Florida, conspired with others to siphon money from Nodus Bank, ultimately leading to the bank’s failure in 2023. Niembro and his co-conspirators concealed from other Nodus Bank board members and executives and the bank’s regulator that certain investments and loans were for the benefit of Niembro and Board Chairman Juan Ramirez, in violation of Puerto Rican law. From 2017 to 2023, Niembro, Ramirez and others caused Nodus Bank to invest $11 million in a Miami-based lender so those funds could be loaned to Niembro and Ramirez for their own benefit.
For complete details, refer to the official DOJ press release.
Niembro and his co-conspirators knew that these transactions were illegal and concealed their conduct through the sham investments. Between January 2018 and September 2021, Niembro and Ramirez also fraudulently induced Nodus Bank’s board and comptroller to agree to buy at least 47 promissory notes totaling approximately $25.3 million from Nodus Finance, a Miami-based company that Niembro and Ramirez jointly owned, so they could use the proceeds of the transactions for themselves. In early March 2023, Nodus’s regulator, the Office of the Commissioner of Financial Institutions of Puerto Rico (OCIF), notified the bank it would be placed into liquidation.
Niembro and Ramirez fraudulently caused Nodus Bank to accept a loan portfolio from Nodus Finance to pay down the debt from the 47 promissory notes. . Moreover, between 2021 and 2023, Niembro conspired with others to conduct prohibited financial transactions with an individual designated as a Specially Designated National (SDN) by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) for providing material support to Venezuela’s state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA).
For related coverage, see US may allow sale of stranded Iranian oil to address global supply shortage.
Specifically, to satisfy an outstanding loan of approximately $2.5 million that the SDN’s company had with Nodus Bank prior to the imposition of sanctions, Niembro and the SDN devised a scheme to cause Nodus Bank to foreclose on the SDN’s home in Southampton, NY. For which they obtained OFAC authorization — but separately reached a “private” agreement to induce Nodus Bank to sell the property back to the SDN for $4 million through a front company — a transaction that was strictly prohibited by U.S. sanctions and not otherwise licensed by OFAC. Niembro pleaded guilty to a two-count Information charging conspiracy to commit wire fraud and conspiracy to violate the International Emergency Economic Powers Act (IEEPA).
Each charge carries a maximum penalty of 20 years in prison. Niembro’s sentencing has been scheduled for June 8. As part of his plea agreement, Niembro agreed to forfeit at least $16.9 million. For related coverage, see Delcy Rodriguez emphasizes lifting US sanctions during Venezuela-Colombia cooperation talks.
At the same time, represents the value of the proceeds he derived from the wire fraud conspiracy. A federal judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
IRS Criminal Investigation (IRS-CI) investigated the case with support from OCIF and the Treasury Executive Office for Asset Forfeiture (TEOAF). Trial Attorneys Javier Urbina and Samir Paul of the Criminal Division’s Money Laundering, Narcotics and Forfeiture Section (MNF) and Assistant U.S. Attorney Felipe Plechac-Diaz for the Southern District of Florida are prosecuting the case.
Furthermore, this prosecution is part of the Homeland Security Task Force (HSTF) initiative established by Executive Order 14159, Protecting the American People Against Invasion. The HSTF is a whole-of-government partnership dedicated to eliminating criminal cartels, foreign gangs, transnational criminal organizations. Human smuggling and trafficking rings operating in the United States and abroad.
Investigation and prosecution details
Through historic interagency collaboration, the HSTF directs the full might of United States law enforcement towards identifying, investigating. Prosecuting the full spectrum of crimes committed by these organizations, which have long fueled violence and instability within our borders. In performing this work, the HSTF places special emphasis on investigating and prosecuting those engaged in child trafficking or other crimes involving children. The HSTF further utilizes all available tools to prosecute and remove the most violent criminal aliens from the United States.