Euro Pacific bank is a scam

[Martin Everson]

Puerto Rico is one of the most corrupt places on planet earth.

Now I know this one personally and I learnt my lesson.

Most of the lawyers in PR are not happy to help as they are afraid about the OCIF and once you find one who agrees to assist you, the lawyer just collect your money with lies and broken promises.

The corruption is so deep-rooted and every where in PR, that you can possible image.

Have to agree.

This is how it works on all Caribbean islands I am afraid . I live on one so know this first hand.

 

[Pschiff]

Here is what I believe happend to Euro Pacific Bank.

Euro Pacific Bank was investigated by a grand jury in California for suspicion of money laundering and tax evasion. The investigation lasted about two years, involved over 2,000 accounts, and over 800,000 pages of documents. The investigation ended with no incitements as no evidence was found that the bank in any way assisted customers launder money or evade taxes. As all Euro Pacific Bank customers know, the bank's compliance was over-the-top strict. 30 of the banks 65 employees worked in compliance, and the bank went above and beyond what most banks do to prevent customers from using their accounts to evade taxes or launder money. That's why to my knowledge no customer of the bank has been found by any foreign jurisdiction to have used their Euro Pacific Bank account to evade taxes or lauder money.

But once an IRS criminal enforcement agent decides to open a case with a grand jury, its very embarrassing if no indictments come out of it. Agents don't open a grand jury investigation unless they are confident of an indictment. It would have been very embarrassing for the IRS agent/s who opened the case against Euro Pacific Bank to come away with nothing.

The stakes were particularly high in this case as the agents likely thought this was going to be a career making case. A huge collar. They had a high-profile/controversial name, and the bank had thousands of customers from all over the world. So expectations were likely raised early on, adding to the embarrassment when it ended up being a giant nothing-burger.

Compounding the embarrassment was all the world-wide publicity the case generated as a result of the illegal leak of the grand jury investigation.. So the IRS agents needed something positive to come out of the investigation. Since they had no power to do anything themselves, since they found no evidence of any crimes, they likely got OCIF to shut down the bank, so they could take credit and save face.

In fact, here is what Jim Lee said in his prepared remarks at the "OCIF" press conference they convinced the Commissioner to hold three months earlier.

"In full transparency, this is not where I thought we would end up two years ago when we were executing our global day of action with the J5. This is what we would call a non-traditional component within an investigation – there is no indictment of the bank or those running it today. But investigations sometimes lead us in a number of different positive directions and this is certainly one of them. "

So that's it. I think the sale to Qenta was rejected, the press conference held, and the bank put into receivership, for the sole purpose of allowing the IRS/J5 to salvage something out of their massive investigation that found noting.

IRS internal emails confirm that on or before April 4th of 2022 the IRS and OCIF agreed to hold a press conference on June 30/July 1, to announce the closure of my bank. The J5 was formed on July 1st, 2018. IRS Chief Jim Lee began his prepared remarks at that conference by stating "four years ago this week" the J5 was formed. So the closure of my bank, and the press conference to announce it was secretly planned months in advance to commemorate the 4-year anniversary of the formation of the J5. Clearly the IRS/J5 not only picked the date of the press conference, but was likely responsible for the decision to close the bank, even though they had no cause or jurisdiction to do so.

The fact that OCIF waited three months to issue the C&D, after it already secretly decided to reject the sale and close the bank, so that the press conference would coincide with the 4-year anniversary of the J5, is more proof there was no emergency. Protecting customers had nothing to do with the decision to put the bank into receivership. That was just a pretense. It's likely that closing the bank was just part of the plan to make the bank look bad for the benefit of the IRS/J5 and the media.

 

[Lemon]

Here is what I believe happend to Euro Pacific Bank.

Euro Pacific Bank was investigated by a grand jury in California for suspicion of money laundering and tax evasion. The investigation lasted about two years, involved over 2,000 accounts, and over 800,000 pages of documents. The investigation ended with no incitements as no evidence was found that the bank in any way assisted customers launder money or evade taxes. As all Euro Pacific Bank customers know, the bank's compliance was over-the-top strict. 30 of the banks 65 employees worked in compliance, and the bank went above and beyond what most banks do to prevent customers from using their accounts to evade taxes or launder money. That's why to my knowledge no customer of the bank has been found by any foreign jurisdiction to have used their Euro Pacific Bank account to evade taxes or lauder money.

But once an IRS criminal enforcement agent decides to open a case with a grand jury, its very embarrassing if no indictments come out of it. Agents don't open a grand jury investigation unless they are confident of an indictment. It would have been very embarrassing for the IRS agent/s who opened the case against Euro Pacific Bank to come away with nothing.

The stakes were particularly high in this case as the agents likely thought this was going to be a career making case. A huge collar. They had a high-profile/controversial name, and the bank had thousands of customers from all over the world. So expectations were likely raised early on, adding to the embarrassment when it ended up being a giant nothing-burger.

Compounding the embarrassment was all the world-wide publicity the case generated as a result of the illegal leak of the grand jury investigation.. So the IRS agents needed something positive to come out of the investigation. Since they had no power to do anything themselves, since they found no evidence of any crimes, they likely got OCIF to shut down the bank, so they could take credit and save face.

In fact, here is what Jim Lee said in his prepared remarks at the "OCIF" press conference they convinced the Commissioner to hold three months earlier.

"In full transparency, this is not where I thought we would end up two years ago when we were executing our global day of action with the J5. This is what we would call a non-traditional component within an investigation – there is no indictment of the bank or those running it today. But investigations sometimes lead us in a number of different positive directions and this is certainly one of them. "

So that's it. I think the sale to Qenta was rejected, the press conference held, and the bank put into receivership, for the sole purpose of allowing the IRS/J5 to salvage something out of their massive investigation that found noting.

IRS internal emails confirm that on or before April 4th of 2022 the IRS and OCIF agreed to hold a press conference on June 30/July 1, to announce the closure of my bank. The J5 was formed on July 1st, 2018. IRS Chief Jim Lee began his prepared remarks at that conference by stating "four years ago this week" the J5 was formed. So the closure of my bank, and the press conference to announce it was secretly planned months in advance to commemorate the 4-year anniversary of the formation of the J5. Clearly the IRS/J5 not only picked the date of the press conference, but was likely responsible for the decision to close the bank, even though they had no cause or jurisdiction to do so.

The fact that OCIF waited three months to issue the C&D, after it already secretly decided to reject the sale and close the bank, so that the press conference would coincide with the 4-year anniversary of the J5, is more proof there was no emergency. Protecting customers had nothing to do with the decision to put the bank into receivership. That was just a pretense. It's likely that closing the bank was just part of the plan to make the bank look bad for the benefit of the IRS/J5 and the media.

I doubt that we will ever know the full story of this .... and I stopped caring long time ago.
I am not a rich person with an extravagant lifestyle but a normal person with a savings account and I just want hard-earned money returned so we can get back to life.
I feel like a prisoner held hostage in some absurd show. It is embarrassing to try and explain to your family and friends why your life has come to a fulll stop, now for almost 2 years!!!
I want to make payments, buy a present for my children, go on a holiday and make plans for my life but none of this is possible.
Meanwhile the people responsible for this seems to care very little about customers lifes in their actions and words.
It is by far the most absurd, unfair, and corrupt encounter I have ever had.

 

[Radko]

Here is what I believe happend to Euro Pacific Bank.

Euro Pacific Bank was investigated by a grand jury in California for suspicion of money laundering and tax evasion. The investigation lasted about two years, involved over 2,000 accounts, and over 800,000 pages of documents. The investigation ended with no incitements as no evidence was found that the bank in any way assisted customers launder money or evade taxes. As all Euro Pacific Bank customers know, the bank's compliance was over-the-top strict. 30 of the banks 65 employees worked in compliance, and the bank went above and beyond what most banks do to prevent customers from using their accounts to evade taxes or launder money. That's why to my knowledge no customer of the bank has been found by any foreign jurisdiction to have used their Euro Pacific Bank account to evade taxes or lauder money.

But once an IRS criminal enforcement agent decides to open a case with a grand jury, its very embarrassing if no indictments come out of it. Agents don't open a grand jury investigation unless they are confident of an indictment. It would have been very embarrassing for the IRS agent/s who opened the case against Euro Pacific Bank to come away with nothing.

The stakes were particularly high in this case as the agents likely thought this was going to be a career making case. A huge collar. They had a high-profile/controversial name, and the bank had thousands of customers from all over the world. So expectations were likely raised early on, adding to the embarrassment when it ended up being a giant nothing-burger.

Compounding the embarrassment was all the world-wide publicity the case generated as a result of the illegal leak of the grand jury investigation.. So the IRS agents needed something positive to come out of the investigation. Since they had no power to do anything themselves, since they found no evidence of any crimes, they likely got OCIF to shut down the bank, so they could take credit and save face.

In fact, here is what Jim Lee said in his prepared remarks at the "OCIF" press conference they convinced the Commissioner to hold three months earlier.

"In full transparency, this is not where I thought we would end up two years ago when we were executing our global day of action with the J5. This is what we would call a non-traditional component within an investigation – there is no indictment of the bank or those running it today. But investigations sometimes lead us in a number of different positive directions and this is certainly one of them. "

So that's it. I think the sale to Qenta was rejected, the press conference held, and the bank put into receivership, for the sole purpose of allowing the IRS/J5 to salvage something out of their massive investigation that found noting.

IRS internal emails confirm that on or before April 4th of 2022 the IRS and OCIF agreed to hold a press conference on June 30/July 1, to announce the closure of my bank. The J5 was formed on July 1st, 2018. IRS Chief Jim Lee began his prepared remarks at that conference by stating "four years ago this week" the J5 was formed. So the closure of my bank, and the press conference to announce it was secretly planned months in advance to commemorate the 4-year anniversary of the formation of the J5. Clearly the IRS/J5 not only picked the date of the press conference, but was likely responsible for the decision to close the bank, even though they had no cause or jurisdiction to do so.

The fact that OCIF waited three months to issue the C&D, after it already secretly decided to reject the sale and close the bank, so that the press conference would coincide with the 4-year anniversary of the J5, is more proof there was no emergency. Protecting customers had nothing to do with the decision to put the bank into receivership. That was just a pretense. It's likely that closing the bank was just part of the plan to make the bank look bad for the benefit of the IRS/J5 and the media.

All that might be true Peter, but ultimately your bank was closed because it wasn't keeping the minimum working capital required by the regulator to keep the license active.

There are only two things that a bank needs to do, one is keep the money safe, and the other one is keep the license active. You don't leave your front door open when you go out of your house, chances are that when you get back, someone has broken into your home. By not keeping the minimum working capital required by the regulator to keep the license active, left the door open for the regulator to step in and close the bank, and that's exactly what has happened. Now here we are, innocent customers who trusted your bank with our lives savings paying the consequences for your mismanagement of the Bank.

Please stop trying to find excuses, and do something to get our money back, it's been almost 2 years!!

 

[Pschiff]

That's not true. The terms of the sale to Qenta required Qenta to add $7 million in capital on closing. That was millions more than the minimum needed. Also the bank made no loans. So didn't even need that much capital, as the rules were written for banks that make loans.

What's most important is that during the meeting we had with the Commissioner in Nov. of 2021 to propose the sale to Qenta and review the terms, which was about five months before she made the secret deal with the IRS to close the bank for insufficient capital, I offered to add the $7 million in extra capital myself, so the bank would have that extra capital during the approval process. The Commissioner specifically told me with about eight other witnesses in the room that there was no need for me to add that capital. That the bank was fine operating with the capital it had while Qenta went through the required process to acquire my banking license. She said it was fine for the bank to wait for Qetna to add the $7 million after she approved the sale, which she said she intended to do.

Despite that I still added $2 million in capital between that date and the June 30th C&D to keep the capital at the level that the Commissioner said was fine for the bank to operate pending the sale. At no time between that Nov. 2021 meeting where she told me not to add any capital, and the June 30th C&D when she closed the bank for not having enough capital, did the Commissioner or anyone at OCIF every ask me or anyone at the bank to add capital or give us an opportunity to add capital to avoid being shut down for insufficient capital. Even after she shut down the bank for not having enough capital I offered to add the extra capital if she would only allow me to liquidate the bank myself without having receiver do it. She refused. She insisted that the bank be liquidated through her hand-picked receiver who had no banking experience, even if it meant no additional capital came in. I did not want to add more capital for the receiver to squander.

Also at no point was the bank ever mismanaged. The bank did absolutely nothing wrong. That's the point. It was all made up to justify shutting down the bank so the IRS , J5, and OCIF could all pretend they stop a bank from helping customers evade tazes and launder money. You can't blame me or the bank for what corrupt government officials do.

 

[jafo]

That's not true. When the terms of the sale to Qenta required Qenta to add $7 million in capital on closing. That was millions more than the minimum needed. Also the bank made no loans. So didn't even need that much capital, as the rules were written for banks that make loans. In the meeting we had with the Commissioner in Nov. of 2021, about five months before she made the secret deal with the IRS to close the bank for insufficient capital, I offered to add the $7 million in extra capital myself, so the bank would have that extra capital during the approval process. The Commissioner specifically told me with about eight other witnesses in the room that there was no need for me to add that capital. That the bank was fine operating with the capital it had while Qenta went through the required process to acquire my banking license. She said it was fine for the bank to wait for Qetna to add the $7 million after she approved the sale, which she said she intended to do.

Despite that I still added $2 million in capital between that date and the June 30th C&D to keep the capital at the level that the Commissioner said was fine for the bank to operate pending the sale. At no time between that Nov. 2021 meeting where she told me not to add any capital, and the June 30th C&D when she closed the bank for not having enough capital, did the Commissioner or anyone at OCIF every ask me or anyone at the bank to add capital or give us an opportunity to add capital to avoid being shut down for insufficient capital. Even after she shut down the bank for not having enough capital I offered to add the extra capital if she would only allow me to liquidate the bank myself without having receiver do it. She refused. She insisted that the bank be liquidated through her hand-picked receiver who had no banking experience, even if it meant no additional capital came in. I did not want to add more capital for the receiver to squander.

When you are on the news, can't you bring this up and shame those who are dragging their feet in Puerto Rico and maybe call the attention of the FBI?

 

[Pschiff]

When you are on the news, can't you bring this up and shame those who are dragging their feet in Puerto Rico and maybe call the attention of the FBI?

I talk about it all the time. I post about it so often that people complain. No one cares. Least of all the FBI. It's the U.S. government that's corrupt. Don't you get that. Also the British and Australian governments too. They all had a hand in this. So is the media. I won a defamation lawsuit and still no one cares. The media refuses to even cover the story that I won. Wikipedia refuses to allow any reference to my win on any of its pages.

 

[jafo]

I talk about it all the time. I post about it so often that people complain. No one cares. Least of all the FBI. It's the U.S. government that's corrupt. Don't you get that. Also the British and Australian governments too. They all had a hand in this. So is the media. I won a defamation lawsuit and still no one cares. The media refuses to even cover the story that I won. Wikipedia refuses to allow any reference to my win on any of its pages.

Well, in that case, it's best everyone here just forget about this. If those governments were the ones who did the "parallel construction" then it is over.

 

[MikeDem]

Well, in that case, it's best everyone here just forget about this. If those governments were the ones who did the "parallel construction" then it is over.

Nope, it's not much money for me, but I want it back. at least the one left after paying receiver's girlfriends.

 

[JohnLocke]

Nope, it's not much money for me, but I want it back. at least the one left after paying receiver's girlfriends.

I'm sorry to say so, but I believe it will be in your dreams. The money will never come back in your pockets, sadly. If they do, I will be the first to take my words back.

 

[Lemon]

I'm sorry to say so, but I believe it will be in your dreams. The money will never come back in your pockets, sadly. If they do, I will be the first to take my words back.

do you know about this case in details ? and the communication between the Receiver and the former EPB account holders?

 

[MikeDem]

I'm sorry to say so, but I believe it will be in your dreams. The money will never come back in your pockets, sadly. If they do, I will be the first to take my words back.

Ok, coming from you, now I'm really worried. From previous posts from @Martin Everson I was hoping that it is kind of normal that bank liquidations take years, and some money is consumed in the process. But your opinion seems to be different. bad news :-(

 

[Martin Everson]

Ok, coming from you, now I'm really worried. From previous posts from @Martin Everson I was hoping that it is kind of normal that bank liquidations take years, and some money is consumed in the process. But your opinion seems to be different. bad news :-(

A normal bank liquidation takes years as I indeed said. But you need to let the receiver do his job or you may indeed never see your money as @JohnLocke says. If individual clients or parties start with legal action and appeals to any failed legal action then this can go on forever with no end in sight. This just delays everything even more to benefit of receiver. His burn rate on expenses (your money) annually will just increase.

I have no idea what is really going on behind the scenes of this all. But we are surely only hearing one side of the story and not all of the facts.

 

[MikeDem]

A normal bank liquidation takes years as I indeed said. But you need to let the receiver do his job or you may indeed never see your money as @JohnLocke says. If individual clients or parties start with legal action and appeals to any failed legal action then this can go on forever with no end in sight. This just delays everything even more to benefit of receiver. His burn rate on expenses (your money) annually will just increase.

I have no idea what is really going on behind the scenes of this all. But we are surely only hearing one side of the story and not all of the facts.

Thanks to both of you guys, I'll just wait and see.
On the bright side, I have discovered this fantastic portal thanks to the EPB situation
Mike

 

[Sols]

The potentially good news is that, so far (and — importantly — based on limited information), nothing in the EPB liquidation saga has played out significantly differently from comparable bank liquidations. It could take another couple of years to finish and, IIRC, it'll still be in line with for example Choice Bank and Loyal Bank.

There is no way to speed up the process. Other than depositors, no one cares about EPB and its customers. There is nothing at stake for any regulator. The liquidator is just doing his job. No one in Puerto Rico is affected (a depositor). This is the best case scenario. Because the only alternative to this is a hostile situation where the people in control go from disinterested to discouraged. Don't make someone neutral your enemy.

As @Martin Everson rightly points out, throwing lawyers at this could just make the process take longer. A lawsuit against the bank will delay the liquidation and might drain money from the bank to pay for lawyers, court fees. A lawsuit against the liquidator will take time away from winding up EPB. A lawsuit against the regulator is probably going to be thrown out on the basis that the regulator hasn't done anything wrong.

 

[Pschiff]

A normal bank liquidation takes years as I indeed said. But you need to let the receiver do his job or you may indeed never see your money as @JohnLocke says. If individual clients or parties start with legal action and appeals to any failed legal action then this can go on forever with no end in sight. This just delays everything even more to benefit of receiver. His burn rate on expenses (your money) annually will just increase.

I have no idea what is really going on behind the scenes of this all. But we are surely only hearing one side of the story and not all of the facts.

This is not a normal bank liquidation. Most banks in liquidation are insolvent. They made a lot of bad loans, and they owe the depositors more than the loans are worth. So in liquidation those loans must be sold before the receiver can sort out how much money is actually available for depositors. But in the case the bank made no loans. The bank had more cash than was owed to depositors. The bank also had no debts other than what was owed to depositors. So it was likely the easiest bank liquidation in history. That's why the bank never should have been put into receivership in the first place. The OCIF Commissioner should have approved the sale of the bank to Qenta, and I'm convinced she had intended to do just that until the IRS illegally interfered. In the alternative she should have allowed me to liquidate the bank myself, as I offered to do. I did not need a receiver, and would have return all deposits in 30 days, so likely fall of 2022. I would have made all depositors whole and there would have been a couple million left over for me. But now there will be no money left over for me, and depositors will likely take a haircut on what they are owed. All of this was done as a PR stunt. All depositors have a right to be angry, But not at the bank neither the bank nor anyone working there did anything wrong. But there is plenty of blame to go around. You can blame the IRS, OCIF, the media, and the Receiver.

 

[danielboros]

Hi all, just wanted to put in my thoughts as another victim of this nonsense.

I think this is what happened and why:
Since EPB's customers were non US citizens I would argue that it is the HMRC and similar organizations of the J5 who cared about the bank and not the IRS. This is just a favor the IRS did for the J5 so that they could investigate US citizens in the EU.

Chronologically:

1. J5 sets up reporting requirements for EPB
2. EPB moves to Puerto Rico to avoid reporting (according to IRS)
3. IRS leaks investigation via J5 news outlets to put EPB in the red
4. OCIF of Puerto Rico finds that EPB is in the red and suspends bank
5. OCIF forces Peter S. to liquidate the bank and gives the task to Lugo Mender
6. Lugo Mender voluntarily gives all account information to HMRC (and probably to everyone else in the J5)
7. HMRC sends mail to the addresses of British EPB customers so that they could confess their sins.

I think it was just about getting the information, unless Peter gave it away before Lugo Mender...

Am I wrong?

 

[Pschiff]

Hi all, just wanted to put in my thoughts as another victim of this nonsense.

I think this is what happened and why:
Since EPB's customers were non US citizens I would argue that it is the HMRC and similar organizations of the J5 who cared about the bank and not the IRS. This is just a favor the IRS did for the J5 so that they could investigate US citizens in the EU.

Chronologically:

1. J5 sets up reporting requirements for EPB
2. EPB moves to Puerto Rico to avoid reporting (according to IRS)
3. IRS leaks investigation via J5 news outlets to put EPB in the red
4. OCIF of Puerto Rico finds that EPB is in the red and suspends bank
5. OCIF forces Peter S. to liquidate the bank and gives the task to Lugo Mender
6. Lugo Mender voluntarily gives all account information to HMRC (and probably to everyone else in the J5)
7. HMRC sends mail to the addresses of British EPB customers so that they could confess their sins.

I think it was just about getting the information, unless Peter gave it away before Lugo Mender...

Am I wrong?

You have some fact wrong. EPB was not moved to PR to avoid CRS reporting. That was not even a consideration. Also we reported CRS for all customers who had brokerage accounts in our BVI subsidiary. While the leak and false allegations of guilt caused the bank to lose money, OCIF did not really suspend the bank for that reason. The sale to Qetna, which the OCIF Commissioner was set to approve, would have solved the bank's capital issues. But the OCIF Commissioner likely changed her mind due to pressure from the IRS/J5, so they could use the closure of the bank as a PR stunt to salvage a victory out of their failed investigation. I don't think the HMRC found a single bank customer who used their EPB account to evade taxes. Also I think the HNRC got all the info on UK customers from the IRS long before Mender got involved.

 

[danielboros]

"You have some fact wrong. EPB was not moved to PR to avoid CRS reporting."

I didn't say that. I said that the IRS believed that.

"Also we reported CRS for all customers who had brokerage accounts in our BVI subsidiary."

How does that give the J5 access to customer accounts who don't have a brokerage account?

"OCIF did not really suspend the bank for that reason"

How do you know that the media frenzy had nothing to do with OCIF? Do you believe there was no collusion between OCIF and IRS?

"so they could use the closure of the bank as a PR stunt to salvage a victory out of their failed investigation"

If that is so why did Lugo Mender give customer data to the HMRC? How is that action in the best interest of the customers? What law requires Lugo Mender to provide this data.

"I don't think the HMRC found a single bank customer who used their EPB account to evade taxes."

How does that prove anything? How would they know before they could check the books? Are you assuming that the J5 knew that they won't find anything before they had the data?

"Also I think the HNRC got all the info on UK customers from the IRS long before Mender got involved."

Why did the HMRC wait for Lugo to take over before they sent out the their threats and how did the IRS obtain the data? Did you give it to them?

 

[Radko]

How does that give the J5 access to customer accounts who don't have a brokerage account?

The bank had to give the names of the account holders due to the investigation. There are no bank secrecy laws in Puerto Rico, they had no choice.

If that is so why did Lugo Mender give customer data to the HMRC?

The Receiver didn't give any information to the J5, the Receiver has nothing to do with the J5, the bank had to give that information before the Receiver was appointed.

You have all the facts wrong.