High Court Judge Javier Gómez Bermúdez ordered the arrest of former directors of the failed savings bank Caja de Ahorros de Mediterráneo (CAM) and two Spanish businessmen in a case involving alleged criminal mismanagement and tax and accounting fraud because they represented a flight risk, judicial sources said Thursday.
A writ issued by the judge said those named in the case “have the economic means and connections abroad to escape justice.” The writ specifically named Curaçao as their possible destination. There is no extradition treaty between Spain and the Caribbean island.
The former Dutch colony is one of the places named in a business deal allegedly struck by former CAM general manager Roberto López Abad and the former head of the savings bank’s corporate division, Daniel Gil, the ex-director of CAM's international and hotel division, César Veliz and the Alicante businessmen José Salvador Baldó and Juan Vicente Ferri, whose whereabouts are unknown.
Judge Gómez Bermúdez believes that López Abad and Gil played a “key role” in the financing Caribbean projects of CAM affiliate Valfensal. CAM had a 30-percent stake in Valfensal and Baldó and Ferri the remaining 70 percent.
Ferri and Baldó informed the two of their intention to set up a company in a tax haven for the receipt of most of the revenues obtained from hotels that they were preparing either to acquire or build, availing themselves of funding from CAM.
The front company was set up in Curaçao under the name Jacksonport Corporation with the help of the law offices of Garrigues, which issued two reports defending the legitimacy of Jacksonport, while at the same time “defining the company structure which Valfensal would use to evade its tax obligations.”
Gómez Bermúdez goes on to argue that López Abad and Gil used the reports issued by Garrigues to justify the legality of Jacksonport to CAM’s management boards.
Valfensal subsequently acquired two hotels in Mexico in 2004, the revenues from which went to Jacksonport. The judge estimates the extent of the tax fraud in the period 2007-2011 at 43 million dollars.
The judge’s writ also claims that López Abad and Gil set up a company that was responsible for the management of Valfensal’s hotels. CAM did not benefit economically from the deal.
Veliz was released on Thursday after appearing in the High Court where he declined to testify. López Abad and two other people named in the case were expected to appear before the High Court later Thursday.
The High Court has argued that the directors named in the fraud case helped undermine what was an already weak bank. CAM was taken over by the Bank of Spain on July 23, 2011 and the state Orderly Bank Restructuring Fund (FROB) subsequently injected 2.8 billion euros of taxpayers’ money into the lender to keep it afloat.
A Bank of Spain report issued at the start of this year highlighted serious deficiencies in the management of CAM, causing the bank to suffer huge losses in risky property deals. They also pointed to multi-million-euro early-retirement packages the directors awarded themselves.