Puerto Rico suspends bank operations amid global probe

San Juan, Puerto Rico — Authorities announced on Thursday that they had suspended operations of the Puerto Rico-based Euro Pacific International Bank, which officials said was suspected of facilitating money laundering and overseas tax evasion.

The bank was founded by Peter Schiff, an American stockbroker and financial analyst, and had 15,000 accounts at the end of 2019, according to online documents.

The investigation was launched by Puerto Rico’s Office of the Commissioner of Financial Institutions, which said the bank that was granted a license to operate in US territory in 2017 had come under scrutiny following a lack of internal controls, a lack of compliance and a level of insolvency. .

Commissioner Natalia Zequeira said that despite “many opportunities” the bank “did not want to comply”.

The bank, located in the capital city of San Juan, did not return a message seeking comment.

Jim Lee, head of the International Revenue Service Criminal Investigation, said he could neither confirm nor deny whether Schiff was under investigation.

Zequiera declined to say how many customers the bank has and its total assets, saying this is confidential information. However, she said creditors would be paid in a certain order.

The bank was established on the Eastern Caribbean island of Saint Vincent and the Grenadines in 2011, then later moved to Puerto Rico. In a 2020 presentation, the bank said 70% of its customers were corporations and small and medium-sized businesses. The remaining 30% was split equally between individual investors and retail banking.

The bank does not provide loans or credit cards, but rather mutual funds and precious metal accounts, among others.

The announcement of the suspension came after the Joint Chiefs of Global Tax Enforcement launched an operation two years ago to control financial institutions in their member countries: the United States, Canada, the United Kingdom, Australia and the Netherlands.

Agency officials said their investigations into the Euro Pacific International Bank are independent of those conducted by the government of Puerto Rico and are still ongoing. Overall, the organization said it oversees around 100 civil and criminal investigations around the world.

Lee of the IRS said “Puerto Rico’s financial industry will not be a haven for tax evaders or illegal behavior.”

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