Criminal action against AREB, INAF, BPA, Vall Banc and JC Flowers for a fraud of more than 80 million euros

A financial operation supposedly organized by the authorities of the Principality of Andorra that would have led to an illegal enrichment of Vall Banc and its owner, the American vulture fund JC Flowers, causing serious damage to the customers of the Private Banking of Andorra (BPA) has taken three of the main shareholders of BPA -Higini and Ramon Cierco and Joan Pau Miquel- to complain against of the main managers of the crisis generated by the outbreak of the Andorran bank.  The Cierco brothers and the former CEO of BPA personally accuse the members of the Andorran state Agency of Bank Entities Resolution (AREB), BPA administrators imposed by the Government of the Principality, the board of directors of Vall Banc and the representatives of JC Flowers that intervened in the purchase of the bank that resulted from the segregation of BPA deposits of prevarication, unfair administration of public assets, money laundering, and illicit association.

The complainants alleged that the financial operations s carried out when BPA had already been nationalized and, therefore, was publicly owned, could have resulted in illicit benefits of more than 80 million euros to either Vall Banc or JC Flowers and, , that same amount would have been subtracted from BPA, causing damage to its clients, among which are the complainants, in view of the liquidation of the bank now in the process of resolution.

Key piece, the AREB, an entity created by the Andorran state to manage the BPA crisis and that became part of the entire operation, because at  design time and in its initial phase of perpetration it was both the owner of BPA and the owner of the bridge bank named VallBanc.

The crux of the matter must be sought in the creation of Vall Banc. Based on decisions that the complainants’ question and expect the Andorran Justice to clarify, BPA transferred, under the order of the AREB, a series of assets to the new bank that were valued at 70 million euros. Assets that were supposedly necessary for the new entity, initially also public, to begin its activity. In return, Vall Banc, based on a decision also taken by AREB, issued bonds convertible into shares (better known in the sector as ‘coconuts’) for the same value. Subsequent events -published on its own website by VallBanc  would show,  that said transfers have not had the balance that was presupposed and that, in addition, other operations would have been carried out tending to decapitalize more a BPA and, therefore, to harm those depositors that today are still obliged to remain as clients when they are blocked by judicial or administrative decision.

In fact, Vall Banc’s own balances recognize that the assets that in his day received from BPA and that the AREB valued at 70 million, are actually worth more than 96.5 million. Therefore, with this operation, when BPA received a role invested in convertible bonds valued at 70 million euros was already ceasing to receive more than 26.5 million. But, in addition, it has now been known that, in April of this year, JC Flowers acquired to BPA with the tacit agreement of the AREB for those obligations, those ‘coconuts’, initially valued at 70 million euros. The purchase and sale operation, according to the appraisals commissioned by the complainants, would not have meant an outlay of more than 15 million to the American fund, which would have resulted in another impairment of 55 million to BPA while enriching the same amount supposedly to the entity that once acquired the bridge bank for a ridiculous amount.

The lawsuit filed this Thursday at the Andorran court (Batllia) specialized in economic crimes considers there is no doubt there was knowledge of the parties that the operation was being designed to harm some (BPA clients, but also the public heritage itself because prior to its segregation the intervened bank was nationalized) and benefit others (Vall Banc as an already private entity and / or JC Flowers). Considering the actions carried out to articulate the financial maneuvers that have taken place, the lawsuit is directed personally against Albert Hinojosa, Armand Pujal, Charles Cornut, François Lemasson and Joaquim Saurina (as members of the AREB), Fernando Vázquez and Òscar Gelabert (as administrators of BPA ), César Goyache, Luis Mariano, Christian Merle and Fernando Vázquez (members of the Board of Directors of Vall Banc) and the representatives of JC Flowers. Likewise, they are held responsible for the damage caused to public entities AREB and INAF, the Andorran company Vall Banc and the American JC Flowers.

The complaint, with different documents attached and proposing the practice of different documentary and testimony evidence (statement to all the defendants), considers that there is no doubt that the AREB acted with total arbitrariness and without taking any measures to avoid the illegality of their acts, as could have been a forensic analysis from an expert, which would imply a prevarication with the offense of having been committed by authority or official. In turn, his improper behavior and contrary to law in alleged collusion with the other defendants involves an unfair administration of public goods since BPA was nationalized on its day. There seems to be no doubt that all the participants in the commission of the alleged crimes did so jointly, that is, in an illicit association. Finally, obtaining the illicit benefit and its incursion in the financial circuit would support money laundering.

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