One of the richest and most politically connected buinessmen in Mexico, will pay a million fine to settle charges he violated banking laws when he bought Laredo National Bancshares in Texas, the Federal Reserve Board said today. The fine, one of the largest by the Fed, will be paid to the United States Treasury in installments: .75 million immediately and .25 million ......
One can safely assume the link after this story is just a continuation of what, if the white-collars who are involved actually get charged, would mean a lot of people would need to be let out of prison to make accomodations for these folks.
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June 1, 2001
http://www.nytimes.com/2001/06/01/business/01BANK.html
Big U.S. Fine for Mexican in Bank Case
By TIM WEINER
MEXICO CITY, May 31 — Carlos Hank Rhon, one of the richest and most
politically connected businessmen in Mexico, will pay a million fine to
settle charges that he violated banking laws when he bought Laredo National
Bancshares in Texas, the Federal Reserve Board said today.
The fine, one of the largest ever imposed by the Fed, will be paid to the
United States Treasury in installments: .75 million immediately and .25
million over the next seven years, the Fed announced.
Mr. Hank will also resign as chairman and as a director of Laredo National
Bancshares, which has about .5 billion in assets, .2 billion in deposits
and two subsidiaries, Laredo National Bank and South Texas National Bank, all
based in Laredo.
The Fed contended that Mr. Hank filed false or misleading reports regarding
his acquisition of a controlling stake in Laredo National through an offshore
holding company that he controls, the Incus Company, which is based in the
British Virgin Islands.
It said he failed to disclose the sale of a million share in Laredo
National to his father, Carlos Hank Gonzáles.
The elder Mr. Hank, a former mayor of Mexico City and a past president of the
Institutional Revolutionary Party, which ruled Mexico for 71 years until it
lost the presidency last July, amassed one of Mexico's biggest family
fortunes during his years as a politician and a federal minister of tourism.
That fortune was built on banking, finance, real estate, construction and
transportation enterprises.
The younger Mr. Hank also failed to disclose his connections to at least five
offshore investments, the Fed said. It also contended that Mr. Hank took part
in improper lending when one of his companies in Mexico received a .4
million loan from Laredo National.
The Fed had charged Mr. Hank, in an administrative proceeding filed in
December 1998, with violating the Bank Holding Company Act and other United
States laws. Mr. Hank denied the violations and did not acknowledge
wrongdoing in the settlement, which he called "an important business
initiative I have taken to enable Laredo to move forward."
He is now banned from controlling or directing banking organizations in the
United States without Fed approval.
The million fine appears to be exceeded only by the 0 million penalty
the Fed levied against the Bank of Credit and Commerce International in 1992.
That bank collapsed in 1991 with debts of more than billion, a result of
what is generally considered to be the biggest fraud in banking history.
Mr. Hank will become chairman emeritus of Laredo National and will retain his
controlling interest in it, the bank said. He "will not be otherwise involved
in its management or operation," the Fed said. His 71 percent stake will be
placed in a voting trust, whose trustees are to include Eugene Ludwig, a
former comptroller of the currency, bank officials said.
Last year, lawyers representing the bank sued the chairman of the political
science department at Cleveland State University, saying that he had given
reporters in the United States copies of a draft Justice Department report
that suggested the Hank family engaged in drug- related money laundering
through the bank.
Janet Reno, then the United States attorney general, disavowed the report as
the work of unsophisticated authors at the National Drug Intelligence Center,
an arm of the Justice Department. She did so in part at the urging of former
United States Senator Warren B. Rudman, who had been retained by the Hank
family in the matter.
Gary G. Jacobs, the president and chief executive of Laredo National Bank,
has also sued officials of the drug intelligence center.
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Original: Big U.S. Fine for Mexican in Bank Case