Former Bank CEO Sentenced for Fraud and Sanctions Evasion

Former Nodus International Bank CEO Tomás Niembro Concha received a sentence of over nine years in prison for his role in a multimillion-dollar fraud scheme and evading U.S. sanctions against Venezuela. As part of his sentencing, he must forfeit over $16.9 million, which he gained from fraudulent activities. U.S. District Judge Kathleen M. Williams sentenced Niembro in Miami.

Nodus International Bank, founded in San Juan in 2009, faced collapse in 2023, leaving $80 million frozen and affecting hundreds of depositors, particularly Venezuelans in South Florida. Niembro, along with former Nodus Chairman Juan Francisco Ramirez, orchestrated the bank’s investment of $11 million in a Miami lender for their personal gain. They owned Nodus Finance, a firm involved in further illicit transactions.

Niembro pleaded guilty to conspiracy to commit wire fraud and conspiracy to violate the International Emergency Economic Powers Act. The scheme concealed from other board members and Puerto Rico regulators that certain investments and loans benefited Niembro and Ramirez. Between 2017 and 2023, $11 million funneled through a Miami lender ultimately benefited Niembro and Ramirez. They disguised these transactions as legitimate investments by Nodus.

From 2018 to 2021, they induced Nodus to purchase 47 promissory notes from Nodus Finance, netting approximately $25.3 million, used for personal expenses. By early 2023, Puerto Rican regulators moved towards placing Nodus into liquidation. As a reaction, Niembro and Ramirez maneuvered the acceptance of a loan portfolio from Nodus Finance to handle debt linked to the promissory notes.

Ramirez pleaded guilty to a related wire fraud conspiracy and must forfeit at least $13.6 million. His sentencing is pending as he cooperates with prosecutors. The legal proceedings highlight an attempt to sidestep U.S. sanctions on Venezuela.

From 2021 to 2023, Niembro was involved in unauthorized transactions with a Treasury-designated person associated with Venezuela’s state-owned oil company, PDVSA. This plan included foreclosing on a property in Southampton, New York, and arranging its unlawful resale through a front company.

Niembro’s actions affected hundreds of Nodus depositors, whose funds became inaccessible as the bank’s operations halted. With Venezuelan customers relying on Nodus amidst growing U.S. sanctions on Venezuela, many could not access their money. At its failure, around $80 million remained locked at the bank.

Nodus operated as an international bank in Puerto Rico, without Federal Deposit Insurance Corp. protection, leaving many customers exposed. Adelaida Cedeño, a Venezuelan businesswoman with deposits at Nodus, expressed her frustration, highlighting the personal impact of the bank’s failure on her business and financial security.

Nodus’ challenges worsened following an October 2022 Treasury finding of sanctions violations involving Venezuela. Regulatory actions followed, stripping the bank’s shareholders from liquidation decision-making and highlighting directors’ payments that conflicted with liquidation plans. Legal efforts persist, with many depositors concerned they will recover little of their trapped funds.

The losers were the account holders.