The chairman of the board of Nodus International Bank in Puerto Rico has pleaded guilty for his part in a scheme to obtain more than $13.6 million from the bank which ultimately led to its failure in 2023, the U.S. Department of Justice (DOJ) said on Sept. 22.
According to the DOJ, Juan Francisco Ramirez, 60, of Miami, Fla., pleaded guilty to conspiracy to commit wire fraud. Officials alleged he conspired with others to siphon money from the bank. He and a co-conspirator are accused of concealing from other Nodus board members and executives, as well as the bank’s regulator, that some investments or loans benefited him and his co-conspirators. The perpetrators invested more than $11 million of Nodus’ funds with a Miami-based lender so the lender could in turn loan those funds to Ramirez and his co-conspirator, officials said, which they knew was illegal and took steps to conceal the true nature of the transactions.
“The defendant abused his position as chairman of the board of directors to fraudulently divert funds from the bank that he had been entrusted to run, resulting in the bank’s collapse,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “The Criminal Division is committed to investigating and prosecuting white-collar fraudsters, no matter how lofty their position, to ensure their crimes do not pay.”
Between January 2018 and September 2021, Ramirez and his co-conspirator fraudulently induced Nodus’ board and comptroller to purchase at least 47 promissory notes totaling an estimated $25.3 million from the finance company that Ramirez and the co-conspirator jointly owned. These promissory notes, the Justice Department officials said, purported to fund loans to legitimate individuals or businesses, but instead were used by Ramirez and his co-conspirator for their own benefit, including using the money to make personal investments, pay personal mortgages and cover personal credit card expenses.
In March 2023, the bank’s regulator – the Office of the Commissioner of Financial Institutions of Puerto Rico – notified Nodus of its intention to place the bank into liquidation. By the end of the next month, Ramirez and his co-conspirator caused Nodus to purchase a loan portfolio from their Miami-based finance company totaling $26 million, most of which were delinquent, non-performing, or otherwise uncollateralized, relieving Ramirez’ finance company’s debt to the bank.
As part of his plea agreement, Ramirez agreed to forfeit at least $13.6 million, the value of the proceeds he received from the conspiracy. He faces up to 20 years in prison and will be sentenced at a later date.