Despite the arrest of two of its top financial officials on money laundering charges, it was business as usual on Monday at Coopertiva de Ahorro y Credito, or Coopera as it is commonly known, the popular Cuenca financial cooperative.
That's the word anyway from both the Coopera board of directors and law enforcement officials, including Ecuador’s attorney general.
On Monday, following a brief computer system failure, small account withdrawals were being processed although holds were placed on withdrawals of more than $5,000. Coopera officials said those would be processed as well but may take as long as 48 hours.
Over the weekend, Coopera's chief financial officer and auditor were arrested and accused of laundering more than $31 million. In addition, provincial and federal prosecutors announced that the general manager, who is traveling out of the country, was being investigated.
Both investigators and the Coopera say that any wrong-doing, if it occurred, involved the actions of individuals working on thier own behalf and not using Coopera funds. Law enforcement officials conceded, however, that it was troubling that the institution’s top management is involved in the case and said they were not sure where the investigation will ultimately lead.
Operations were running normally on Monday at the Coopera’s 11 organic food markets.
Cuenca expats with accounts at Coopera, said they were worried
about their money. "I feel duped, quite frankly," said one expat who asked not to be identified. "When I opened
my account, I was told that my money was insured and only found out
later that Coopera is self-insured."
Another expat, Joan Rogers, who said she only
found out about the problem when she read about it in GringoTree, said that local
professionals who assist expats should be held partly accountable. "The Cuenca
Chamber of Commerce recommends Coopera and I know of at least two
relocation experts who tell their clients to put money there. It strikes
me as something of a scam," Rogers said.
Although there is no information about how many Cuenca expats have accounts with Coopera, Paul Moreno, an attorney who works with North Americans, said he thought it was more than 100 and maybe as many as 200.
Meanwhle, Rodrigo Aucay, Coopera’s general manager, called office staff and law enforcement officials from the Dominican Republic to say he was on his way back to Cuenca. Although there is no warrant for his arrest, the attorney general said he wanted to talk to Aucay.
Some media outlets reported on Monday that Aucay had fled the country but Aucay said that he is “not a fugitive,” and that he was was attending a conference of international financial cooperatives in the Dominican Republic.
Aucay said, “I am ready to come forward and assist in straightening out the situation.”
Those arrested over the weekend were Coopera’s chief financial officer Aldo Santiago Calle and auditor Raúl Efraín Carpio.
The Superintendencia de Economía Popular y Solidaria (SEPS) said that it had been investigating “irregular movements” of funds through the cooperative for serveral months prior to the arrests. In particular, SEPS says it was watching transfers between banks in Venezuela and Ecuador's Central Bank originating at Coopera.
In a press conference Monday, both SEPS and the attorney general’s office said that they had put a freeze on 16 Coopera accounts suspected of being used for money laundering. They emphasized, however, that other than those accounts, they have found no evidence of depositor money being used illigally.
One concern of banking officials is that Coopera accounts are not insured by the national banking system. Coopera said it has sufficient funds on hand to manage above average withdrawals. Marcelo Valencia, appointed by the board of directors as acting general manager, said he is working with SEPS to manage any run on the bank. "I understand that there is a great deal of discomfort over recent developments, but we are working hard to make sure our partners and depositors are taken care of."
Expat Rogers says she's happy that management cares about her account but says she plans to withdraw her money as soon as possible. "Obviously, there's a serious management problem with these people and I don't want to be associated with them. I just hope I get my money back."
According to SEPS, Coopera manages between $45 and $50 million and has about 114,000 members.
Photo caption: Law enforcement officers removing records from a Coopera office in Cuenca (photo credit: El Tiempo)