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DOMINICAN REPUBLIC ECONOMY THREATENED BY MASSIVE BANK FRAUD.

Article Excerpt
A case of systematic bank fraud that has been in operation for at least 14 years has threatened to bankrupt the Dominican Republic. The scandal was once called the "Enron of the DR," but, as facts have emerged, the case of Banco Internacional (Baninter) dwarfs the US scandal to which it was compared in its potential damage to the economy as a whole.

Last March 24, newspapers announced that another bank, Banco del Progreso, would take over Baninter. Both institutions signed an agreement by which the former would take over the assets of Baninter and of Intercontinental de Seguros and Baninter & Trust Company. The acquisition had the approval and support of the Junta Monetaria and of the Banco Central.

President Hipolito Mejia announced the next day that the merger, which had been in the works for several months, was an event of great import for the consolidation of the national financial system. Others, including the president of the Asociacion de Bancos Comerciales, Jose Manuel Lopez Valdez, and even the rector of the Pontifica Universidad Catolica Madre y Maestra, Monsignor Agropino Nunez Collado, added their voices of approval.

But rumors that something was amiss began to emerge, and by March 30, President Mejia...

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