Tomás Niembro Concha, the former CEO of Nodus International Bank in Puerto Rico, has received a prison sentence exceeding nine years for his involvement in a significant fraud scheme. This involved siphoning millions from the bank and evading sanctions related to Venezuela. Niembro, aged 64 and a national of Spain and Venezuela, was sentenced to 112 months in prison, followed by three years of supervised release. Additionally, he must forfeit over $16.9 million, which represents the illegal proceeds from his fraudulent activities.
The sentencing marks a pivotal moment in the downfall of Nodus, a San Juan-based bank operated largely by Venezuelans since its inception in 2009. The bank’s collapse in 2023 left around $80 million in deposits frozen, affecting many customers, especially Venezuelans residing in South Florida.
Fraud and Violation of Sanctions
The criminal proceedings underscore the Miami connections in the case. Prosecutors revealed that Niembro and Juan Francisco Ramirez, the former Chairman of Nodus, orchestrated the transfer of $11 million to a Miami lender. This money was later loaned to Niembro and Ramirez for personal gains. They also jointly owned Nodus Finance, based in Miami, which was implicated in further transactions that funneled millions from the bank.
Niembro admitted guilt on charges of conspiracy to commit wire fraud and to violate the International Emergency Economic Powers Act (IEEPA), the federal statute supporting many U.S. sanctions.
Assistant Attorney General A. Tysen Duva highlighted the abuse of Niembro’s position at Nodus for personal enrichment and evasion of sanctions.
Concealment from Regulators and Board
Court documents indicated Niembro and his associates kept investments and loans benefiting them hidden from Nodus board members, executives, and Puerto Rico regulators. From 2017 to 2023, they funneled $11 million through a Miami lender for personal loans, masked as investments by the bank.
Prosecutors revealed further misconduct involving Nodus Finance. Between January 2018 and September 2021, Niembro and Ramirez deceived the bank’s officials into buying at least 47 promissory notes worth around $25.3 million. They misused the proceeds for personal expenses, including mortgages and credit card debts.
By March 2023, Puerto Rican financial authorities informed Nodus of impending liquidation. Niembro and Ramirez tried to offset debts from the promissory notes by misappropriating assets from Nodus Finance.
Ramirez, based in Miami, pleaded guilty to conspiracy to commit wire fraud last year and agreed to surrender at least $13.6 million. His sentence is pending, with prosecutors acknowledging his cooperation in the investigation.
Evading Venezuela Sanctions
Niembro’s criminal activities extended to violating U.S. sanctions on Venezuela. From 2021 to 2023, Niembro and others engaged in unauthorized financial transactions with a person sanctioned by the Treasury Department for supporting Venezuela’s state oil company, PDVSA.
Prosecutors shared a plan where Nodus foreclosed on a New York property owned by the sanctioned individual, who owed the bank $2.5 million. Though sanctioned, an agreement was privately reached to sell back the property for $4 million, circumventing legal requirements.
Charles Miller, acting special agent in charge of the Florida IRS criminal office, noted that Niembro’s actions threatened national security by violating sanctions.
Impact on Bank Customers
Nodus customers have faced years of uncertainty about their trapped funds after the bank’s failure. Particularly popular with Venezuelans wanting to manage money internationally, Nodus’s liquidation trapped an estimated $80 million by 2024. Depositors, including Venezuelans in South Florida, Latin America, and Europe, suffered significant financial losses without the Federal Deposit Insurance Corp’s protection.
“There are not enough words for what I feel,”stated Adelaida Cedeño, a Venezuelan businesswoman in Spain with $35,000 deposited at Nodus.
Cedeño remarked on the constant misinformation from the bank and its impact on her business reliant on international transactions, feeling victimized by fraud.
Nodus’s issues worsened when the Treasury found violations of U.S. sanctions in October 2022. Unable to function normally, Nodus entered a liquidation under Puerto Rican regulators. Investigators found payments inconsistent with the plan and transactions involving conflict of interest, jeopardizing the bank’s stability.
Regulators eventually barred further shareholder participation in the liquidation, considering sanctions to address harm to depositors caused by fund diversions. Lawyers representing depositors express concern about only recovering a portion of their investments.
Carlos Calderon, an attorney for several Venezuelan clients of Nodus, lamented that the account holders were the real losers in this financial debacle.