THE CASE/Proof of innocence              1 2 3 4 5 6

1 Filanbanco was bankrupted by a corrupt government administration

When the Isaias brothers turned over Filanbanco to the State on December 2, 1998, the bank was experiencing a liquidity crisis but, it was not bankrupt. The bank was solvent and was turned over completely functional. There is substantial evidence to prove this.

For example, the official letter sent from the Superintendent of Banks to the Central Bank dated November 25, 1998 that certified the solvent economic situation of the Filanbanco Financial Group. It was the Government and some immoral officials that squandered and bankrupted it four years later.

Filanbanco was so solid and solvent that during the first trimester of 2001 the State management had profits in excess of 130 million USD.
Filanbanco was the largest and most solvent bank of the past century

Filanbanco had half a million clients and managed more than half a billion US dollars in international credit.  It managed 40% of the country’s foreign commerce. The floriculture, banana and shrimp industries were promoted by Filanbanco’s vision, support and loans.

According to that reflected on the balance sheets and reports delivered to the Superintendent of Banks and the Central Bank of Ecuador, when Filanbanco was turned over to the Agency of Guaranteed Deposits (AGD) it was solid and solvent. During the first year of State management, with the same assets and liabilities left behind by the former shareholders and having surpassed the liquidity crisis Filanbanco, was once again the most profitable bank in the country.

Filanbanco used to rescue bankrupt banks

During Gustavo Noboa’s government, political interests infiltrated the AGD and “obligated” Filanbanco to rescue several banks. Among them were four entities that were under suspicion due to their ties to power: Cofiec (Falconi-Avellan), Previsora (Guerrero Ferber brothers), Pacífico (Laniado) and Progreso (Aspiazu-Seminario).

Losses for 895 million during government managed Filanbanco

From the end of 1999 until Filanbanco’s bankruptcy in 2002; the bank’s balance sheets, reports to the Superintendent of Banks, international advisors, findings by auditing firms revealed that between April and December 2000, the bank’s financial situation gravely deteriorated. It was during that period that Filanbanco lost its liquidity and solvency. A report by the Superintendent of Banks shows that State Filanbanco generated a loss of 895 million USD in the hands of government administrators.

Details of the loss in State Administration

The sums are overwhelming.  In Bond operations, State Filanbanco lost 201.1 million USD. In CDR negotiations the loss was 112.4 million USD for the re-programming of mature deposits after the Executive Decree that froze them, in which Filanbanco was forced to receive CDR’s as payment for the debts of its clients. (Some of these CDR’s were paid in advance and in cash to politicians and influential authorities like Juan Falconi).

The dismal loan administration alleged losses of 117.5 million USD; the merger with Previsora Filanbanco lost 108 million USD; sale of assets, 17.7 million USD; and finally due to provisions enacted for lack of management in the collection of portfolio 338.5 million USD were lost.

The case against the former administrators of Filanbanco was filed in 2000, a year and a half after they had turned the bank over to the State. Almost all of the accounting firms operating in the country filed through Filanbanco and their reports all found that the former shareholders had turned the bank over to the AGD in good state.

Filanbanco’s use of loans by Central Bank of Ecuador were proper

On December 5, 2000, State Filanbanco managed by the AGD sent a written certification to the President of the Supreme Court of Justice confirming the proper use and destination of the loans.

The experts Fernando Castillo and Elvira Pino, appointed by the highest judicial authority also certified the correct use and destination of said loans.  Based on this evidence, the Attorney General Mariana Yepez had to acknowledge her mistake in the accusation of abuse of public funds and issued a judgment confirming that there was no banking embezzlement. She limited herself to accusing the defendants of crimes in the management of balance sheets. The evidence ultimately proved this to be false.

The accusations concerning the deviation of loans to the companies belonging to the Isaias Group were never proven. The Supreme Court of Justice asked the Superintendent of Banks on three occasions to prove, expand and detail said accusations, but, said entity was unable to do so. The Court made inquiries to banks in the US that the Superintendent of Banks mentioned as beneficiaries of the loans from the CBE and those banks certified that they had never received said funds.

In the absence of a legal formula to incriminate the Isaias brothers, those in power at the time, availed themselves of false pretexts to force the accusation and conceal their interests. The intention was to obtain an accusation by whatever means necessary even though there was no supporting evidence.





VIDEO:Juan Falconi Puig, Superminister of Mahuad's bank holiday

Bankruptcy of Filanbanco is the consequence of a corrupt government administration.

All credits were paid to Banco Central. There was no embezzlement.

Confiscation was illegal, without court ruling and a Mandate that set them into legal helplessness.

Judges ratify the innocence of Isaias Brothers. Correists turn down the court ruling.

Ecuadorian justice manipulated and ruled by the executive power.

Processes with impartial judges, give reason to the Isaias brothers.


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