Figueroa, Ramon Baez - $2.5 Billion Banker Fraud

Ramon Baez Figueroa

THE CON: As president of the second-largest private bank in the Dominican Republic, Ramon Baez Figueroa had power and influential friends. He also had access to deposits, more than half of which he used to support himself and those who had something to offer him.

THE DAMAGE: $2.5 billion

THE OUTCOME: When the government footed the bill for the fraud, that $2.5 billion represented two-thirds of its budget for the year. The value of the peso plummeted and the Dominican Republic went into an economic tailspin. Figueroa is serving a 10-year sentence.

His bank’s slogan: “Everything is possible.”

In 2003, the economy of the Dominican Republic spiraled out of control – thanks in no small part to the power and greed of one man. As president of the nation’s second largest bank, Ramon Baez Figueroa showered politicians with extravagant gifts, most of which were purchased with the bank’s deposits. Regulators were content to turn a blind eye to Banco Intercontinental's activities until people started pulling their money out. In a final, disastrous move, the government pledged $2.2 billion in bailout funds.

The advertising slogan for Banco Intercontinental, known as Baninter, said it all: “Everything is possible.” This was certainly true for Figueroa's friends and family. Up to two-thirds of the money that customers deposited in the bank were funneled off the books using a custom-designed software system. These funds were used to support Figueroa's lavish lifestyle and to pad the pockets of those with influence. To ensure the president's favor, Figueroa presented him with a shiny new S.U.V.

His power and prominence had deep roots that extended into nearly every corner of society. Figueroa's great-grandfather had been president of the Dominican Republic; along with its political influence, Baninter owned the country's largest media group, including its major newspaper and four television stations.

But all that Figueroa owned couldn't stop the rumors that started circulating in 2003. When large numbers of people pulled their money out, the bank collapsed. As a first response, the nation's central bank opened up new lines of credit. A bank run by the president's son-in-law seemed poised to acquire Baninter but the deal fell through. The government took over Baninter, guaranteeing all of its deposits – including those in the Cayman Islands. The New York Times reported that the majority of that $2.2 billion bailout – which amounted to two-thirds of national budget – went to the nation's wealthiest individuals.

The nation's economy, which was already flagging from dips in tourism and manufacturing by major American retailers, went into a tailspin. Inflation rose while the peso was devalued by one-third. The government subsidized electricity (even for the nation's wealthiest); blackouts became another outcome of the crisis.

Figueroa was found guilty and sentenced to 10 years in prison; according to The New York Times, he retained his longtime position of power even while incarcerated, enjoying visits from major politicians during his trial.

http://www.thehallofinfamy.org/inductees.php?action=detail&artist=ramon_baezfigueroa