Former Nodus Bank CEO Sentenced to 112 Months for $24.9 Million Fraud and Venezuela Sanctions Evasion
Tomás Niembro Concha, the former chief executive officer of Puerto Rico-based Nodus International Bank, has been sentenced to 112 months in prison for a multimillion-dollar fraud conspiracy and a separate scheme to evade U.S. sanctions on Venezuela.
The U.S. Department of Justice said on September 21 that Niembro, 64, was also sentenced to three years of supervised release and ordered to forfeit more than $16.9 million, representing proceeds he derived from the wire fraud conspiracy. He pleaded guilty in March to conspiracy to commit wire fraud and conspiracy to violate the International Emergency Economic Powers Act.
Fraud scheme contributed to Nodus Bank’s failure
According to court filings described by the Justice Department, Niembro conspired with others to siphon money from Nodus Bank, which ultimately failed in 2023. Prosecutors said Niembro and his co-conspirators concealed from other board members, executives and the bank’s regulator, the Office of the Commissioner of Financial Institutions of Puerto Rico, that certain investments and loans benefited Niembro and board chairman Juan Ramirez.
From 2017 to 2023, the group caused Nodus Bank to invest $11 million in a Miami-based lender so the funds could be loaned to Niembro and Ramirez for their own benefit, according to the DOJ. The transactions were concealed through what prosecutors described as sham investments.
Between January 2018 and September 2021, Niembro and Ramirez also induced the bank’s board and comptroller to purchase at least 47 promissory notes totaling approximately $25.3 million from Nodus Finance, a Miami company they jointly owned. Prosecutors said the proceeds were then available for their personal use.
After the Puerto Rico regulator notified Nodus Bank in March 2023 that the institution would be placed into liquidation, Niembro and Ramirez caused the bank to accept a loan portfolio from Nodus Finance to reduce the debt arising from the promissory notes.
Private arrangement circumvented an OFAC-authorized foreclosure
The sanctions-evasion conduct involved an individual designated by the U.S. Treasury’s Office of Foreign Assets Control for providing material support to Venezuela’s state-owned oil company, Petróleos de Venezuela, S.A. (PDVSA).
The designated individual’s company owed Nodus Bank approximately $2.5 million on a loan that predated the sanctions. The bank obtained OFAC authorization to foreclose on the individual’s home in Southampton, New York. Prosecutors said Niembro and the sanctioned individual separately arranged for Nodus Bank to sell the property back to the individual for $4 million through a front company. That separate transaction was prohibited by U.S. sanctions and was not licensed by OFAC.
The case was investigated by IRS Criminal Investigation with support from Puerto Rico’s Office of the Commissioner of Financial Institutions and the Treasury Executive Office for Asset Forfeiture. The prosecution was handled by the U.S. Attorney’s Office for the Southern District of Florida and the Justice Department Criminal Division’s Money Laundering, Narcotics and Forfeiture Section.
