Banco Intercontinental

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Banco Intercontinental (or Baninter) was the second largest privately held commercial bank in the Dominican Republic before collapsing in 2003 in a spectacular fraud tied to political corruption. The resulting deficit of US$2.2B was equal to 12% to 15% of the Dominican national gross domestic product. The size of the bank collapse and the mishandling of it by the administration of President Hipólito Mejía contributed materially to the Dominican economy entering a prolonged steep decline. However, the underlying fraudulent bookeeping had been ongoing for many years.

Though required by the country's Monetary Law to only guarantee individual deposits of up to $500,000 Dominican Pesos (about US$21,000 at the time of the bank collapse) placed within the country, the Mejía-controlled Dominican Central Bank opted to guarantee all $2.2B in unbacked Baninter deposits, regardless of amount, regardless of whether deposits were in Pesos or United States Dollars and regardless of whether the deposits were held in the Dominican Republic or in Baninter's branches in the Cayman Islands and Panama. The subsequent fiscal shortfall was equal to 12%-15% of GDP, resulting in massive inflation (42%) and the devaluation of the Peso by over 50%.

Mejía's Central Bank stated that the unlimited payouts to depositors were to protect the Dominican banking system from a crisis of confidence and potential collapse. However, the overall effect of the bailout was to reimburse the wealthiest of Domincan depositors, some of whom had received rates of interest as high as 27% annually, at the expense of the majority of poor Dominicans -- the latter whom would be required to pay the cost of the bailout through inflation, currency devaluation, government austerity plans and higher taxes over the coming years.

In November, 2005, wealthy Dominican financier Luis Alvarez Renta was found liable by a federal jury in Miami of civil racketeering and illegal money transfers in a conspiracy to loot Baninter during its final months of existence. Alvarez Renta was ordered to pay $177 Million.

Currently, the main executives of Baninter, Ramón Báez Figueroa, Miguel Baez Cocco, Vivian Lubrano, Jesus Troncoso Ferrua, and the aforementioned Alvarez Renta, are being prosecuted by the Dominican state for fraud and money laundering. Baez Figueroa's attorney is Vinicio Castillo, who at the present time holds the position of President Leonel Fernandez's Drugs Consultant.

Prior to Baninter's collapse, Dominican baseball great Sammy Sosa pitched the bank in a series of print and broadcast advertisements, proclaiming "solido, como Baninter", or "solid, like Baninter".