A Criminal compliant filed in Panama, against Balboa Bank & Trust, Ramon Fernández Quijano, and Julianne Canavaggio, for $554,876.83, should serve as a wake-up call about the fact that accounts at local banks in Panama are neither insured, nor protected by regulatory authorities, and the corrupt court system does not guarantee speedy relief, or any relief at al, for that matter.
The plaintiff alleges that the bank, formerly known as Banco Translántico SA, ordered an incoming wire diverted, into the bank's own account at Commerzbank in Germany; clearly, a criminal act. Reports from Panama indicates that the bank, at that time, was controlled by Russian organized crime, and that the Russian had obtained ownership of the bank through collusion with Panamanian government officials, at the ministerial level. Sale of the bank was later ordered by the Superintendent of Banking.
This is only one of a number of incidents, where foreign owners allege that their bank stole their deposits, and to give this issue the attention that it deserves, remember these three key facts:
(1) Customer deposits at banks located in the Republic of Panama are NOT insured, nor is there any method through which relief can be obtained with regulators.
(2) According to public statements of the Superintendent of Banking, most Panamanian banks are under capitalized, and are deficient anywhere from 15 to 50% of capital; This means that the risk of failure, and a total loss for your client, is something you must consider before placing funds there, or investing in businesses that deposit their cash flow in these banks.
(3) The current government cannot help you, because it can only cover one-quarter of its proposed 2014 budget. expect no assistance in any form from the authorities.
If you have ever had a client's funds frozen, or embezzled from a tax haven bank, you know that such events can wreak financial ruin for your client, and cause reputation damage to you or your corporate entity. The word for Panama, if you are a prudent businessman: place only such funds or investments there that you can stand to lose 100% of, and do not borrow funds elsewhere, to invest in Panama. The personal risk levels, in in such a booming economy, are high; watch yourself, please, in Panama.