Miami, November 28, 2008— The former President of Banco Dominicano del Progreso, S.A. – Banco Multiple was found liable of civil theft, fraud charges and breach of fiduciary duty against the bank and its related companies and now faces at least $80 million in damages.
Miami-Dade County Circuit Court Judge Mary Barzee-Flores ruled late Wednesday that Pedro Castillo converted bank funds for his own use, breached his fiduciary duty to the bank, defrauded the bank and committed civil theft.
Barzee-Flores found that Castillo fraudulently concealed the true state of the bank’s affairs from its board of directors, audit committee, external auditors and Dominican banking regulators. She found that Castillo and companies related to his business deals are liable to Banco Dominicano del Progreso.
Damages could exceed $100 million once attorney fees and legal costs are combined, a victory for the bank and other Dominican Republic-based companies seeking restitution in civil court.
The judge ruled that none of the defenses raised by Castillo had any merit. “I found his testimony not credible and unsupported by the other evidence and testimony at trial,” Barzee-Flores said.
“This is a complete victory for Banco del Progreso and the enormous effort that Banco, its directors, current executives and staff have made to assist in this investigation and trial,” said Read McCaffrey, who directed the legal team from the D.C.-based Patton Boggs LLP, which represented BDP in the civil case.
The ruling ends nearly three years of dispute in the 11th Judicial Circuit Court in Miami-Dade County. The plaintiffs alleged in February 2006 that Castillo, during his tenure as president and chief executive officer of the bank, defrauded BDP and the other plaintiffs by stealing money through 403 separate transactions involving payments to himself, companies that he controlled and third parties for goods and services that benefited him.
“Judge Barzee-Flores concluded that BDP had proved each and every of the 403 transactions in which the bank had alleged fraud, civil theft or conversion,” said Stephen Díaz Gavin, part of the legal team from Patton Boggs.
The judge also found that Castillo used the money taken from the bank to buy and improve luxury condominiums in Miami and the tony ski resort Vail. He also used the funds to make a down payment on a helicopter, and yachts, among other expensive items, Gavin said.
Castillo was dismissed by the bank in October 2005 amidst charges of fraud and concealment of the actual financial condition of the bank. He is currently on trial in the Criminal Court of the National District of the Dominican Republic for violations of the securities laws, the Monetary and Financial Law, as well as charges of criminal fraud and violations of the money laundering laws.
The civil verdict comes after months of delay stemming from requests for appeal and additional time.