Documents and securities proving Isspol’s ownership of nearly $ 700 million in investments have been transferred from one hand to the other and his whereabouts remain unknown.
The Central Depository for Clearing and Settlement of Securities (Decevale) has been promoted since December 2020 A civil case in Florida, United States, In search of information on the moves that led to the embezzlement of the Police Institute for Social Security (Isspol).
Decevale, headquartered in central Guayaquil, is the only private securities depository authorized to operate by the Ecuadorian Corporate Supervisory Authority.
But the deposit intervened since September 2020After the scandal launched by Isspol’s fraudulent investments through broker Jorge ‘El Mago’ Chérrez, which amounted to more than $ 693 million USD.
The lawsuit, filed on December 22 in the Court of Southern District of Florida, Refers to former Decevale Operations Director, Luis Alvarez.
They point to him having signed contracts without permission on Decevale’s behalf, to create the “false appearance” that Decevale was a trustee of Isspol’s investment securities.
But the truth is that These values were guarded by the subsidiaries of the same “magoo” Sherrys, Who was also the recipient of operations with Isspol. What caused a conflict of interest.
The contracts between Decevale and Chérrez
Between 2014 and 2020, Isspol invested $ 693.4 million through Chérrez. One such transaction was a barter or financial exchange, for which Isspol allocated $ 327 million USD.
The other major operation was a $ 205 million buyback agreement.
On August 6, 2020, Alvarez issued a letter confirming Decevale has in his custody $ 693,411,150 in Isspol stock. But the truth is that these values were not found during the Decival intervention.
According to the internal audit, Alvarez signed agreements using the name Decevale “without right or permission”.. It was these agreements that would have allowed the Isspol securities to leave the custody of Decevale and pass them on to the “El Mago” companies.
The first agreement for “guard services” was signed between the two countries Alvarez and the Panamanian company IBCorp, owned by Chérrez, in January 2003.
Its purpose was to “provide advice in which Decevale has granted broad powers to IBCorp to recommend, on the name and account of Decevale, the offshore custody and liquidity management institutions and the securities deposited in the said institutions.”
Oddly, this contract prevented Decevale from directly managing these accounts, delegating its direct control to IBCorp.
Within this contract is the Pershing LLC account, which was opened with the signature of Alvarez for Decevale, who was the lead of IBCorp.
According to the lawsuit, during the intervention it was found that The Pershing account is now owned by the Lafise Securities Corporation, Another Miami-based company.
The second agreement is the “Payment Agency Service Agreement”, signed in October 2014 between Alvarez, on behalf of Decival, and ABC Corp, of Cherys.
It was intended as Decevale to be a paying agent for proceeds of securities filed by IBCorp with Decevale itself.
How the Isspol money got lost
In 2016, Isspol signed at least two financial restructuring contracts with the Ecuadorean High Yield Bond Fund (HYBF) of Panama, which is owned by Chérrez.
The first is a barter of $ 327 million. Under this number, Isspol replaced the global Ecuadorian external debt bonds with Global Depository Notes or GDNs, for their English abbreviation, issued by Citibank.
Lafise was the one who would recommend a bond swap for GNDs.
GDNs belonging to Isspol were to be in the custody of DecevaleBut thanks to a custody services agreement signed by Alvarez, these securities remained in the hands of IBCorp, as well as Chérrez.
In the second process, the buyback, Decevale is appointed as the Securities Exchange Secretary, however These securities are not filed with DecevaleInstead, they were at another company, Miami-based ICS Institutional Custody Services, also owned by Chérrez.
These deposits were managed by IBCorp, that is, Chérrez himself, in accordance with the Custody Services contract.
“This scheme was created by Alvarez and Shirez to give Espole the impression that Desval was the true custodian of their values, when in fact he was running it by Cherese himself.”
Decevale civil lawsuit in Florida
The problem then is that Isspol’s stock was not in the hands of an independent trustee, But from Chérrez himself, who was also behind the financial investments.
As a result of the foregoing, the current position of the stock is unknown and Isspol is no longer in her hands even though it belongs to her.
Chérrez companies refuse to cooperate
Decevale seeks to Legal support to obtain, in the first place, the contracts signed by Alvarez on behalf of Decevale and IBCorp, from Chérrez.
These contracts are the documents that allowed Isspol’s papers to end up in the hands of the Chérrez companies rather than being held in Decevale.
“Given that the companies associated with Shriz have violated their agreements with Isspol, the whereabouts of the securities allegedly held by Decevale is unknown.”
Decevale civil lawsuit in Florida
For this reason, Decevale also requests access to All communications between Alvarez, Shirez, ABC Corp, ICS, HYPF and Citibank Concerning Decevale Contracts or Conservation of Title Deeds subject of contracts signed by Isspol.
Decevale ensures that it is also seeking evidence regarding the transfer of Pershing’s account to Lafise and Citibank’s GDNs.
On January 27, 2021, Judge Darren Giles approved Decevale’s request and authorized subpoenas to Chérrez’s companies, as well as Citigroup and Lafise.
But Chérrez companies refuse to provide informationAlthough the “magician” himself publicly said that he was ready to hand over all Isspol papers and bonds.
In response to Judge Giles ‘order, the companies claim that Decevale only uses the companies’ relationship with Chérrez as the basis.
But the judge did not accept this response, and confirmed the order to hand over the information Decevale had requested.
On February 24, the Chérrez companies responded to the court order, requesting who Canceling the subpoenas of Lafise Securities Corporation and Citigroup.
They argue that both companies have sensitive and confidential financial information that they possess. And on this last argument there is still no answer in the American legal system.
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