MIAMI -- The former president of Republic National Bank and two former officers surrendered Thursday on racketeering and fraud charges that they used their jobs and inside knowledge to profit illegally on real estate deals.
The U.S. Attorney's Office unsealed a 78-count federal grand jury indictment, returned Tuesday against former bank President Fred De La Mata, former Executive Vice President Manuel Calas, former Senior Vice President Oscar Castilla and bank customer Enrique Fernandez.
The defendants and two Florida real estate companies they secretly owned, Real Estate Partners and Hialeah Properties, are charged with racketeering and bank fraud.
The indictment said that from 1983 to the present they used their inside knowledge to buy property at advantageous prices with loans obtained from the bank.
The former officers then sold some of the properties and rented others back to the bank for use as branch sites, conducting the transactions through Fernandez and the real estate companies to conceal their ownership, the indictment said.
The bank itself was not charged, nor was any disruption in service expected, said U.S. Attorney James McAdams.
He said the bank was a victim, not a participant, and that the defendants' actions probably caused 'substantial losses' to the financial institution.
'We believe there is a loss, we just haven't quantified it,' McAdams said.
All four defendants surrendered Thursday to the FBI and were scheduled to appear before a federal magistrate. The 78 counts carry penalties ranging from 2 to 30 years in prison and fines up to $1 million.
Bank President Oscar Bustillo issued a statement noting that none of the defendants have been associated with the bank since 1988. He said the bank itself uncovered the allegations and immediately reported them to investigators and bank regulators.
'We removed all those who may have been involved in or permitted questionable practices and we have shared the results of our investigation with the government,' Bustillo said.
He acknowledged the charges had tarnished the bank's reputation, but assured customers their money is safe.
'We have total confidence in the integrity of our institution. Republic Bank is being operated in the most professional and ethical manner. We are financially sound and will continue to play a vital role in the growing economy of South Florida,' Bustillo said.
The government is seeking forfeiture of about $5 million worth of property owned by the defendants, including the sites of four Republic National Bank branches.
McAdams said the federal government would take over as landlord at the four branches, collecting rents from Republic without disrupting operations.
'We are not attempting to seize assets owned by Republic,' McAdams said.
