Of capital investments made in a “bank”…
I have received many calls from people that invested in what they call a bank called Capital Institute or Capitalbank of Mexico which is no longer paying them an agreed upon interest or returning their investments back.
If you live in Tijuana you have probably seen the foreign exchange house with the name “Capital Institute” on Blvd. Agua Caliente with big red letters and you may have also seen a billboard touting 12% interest in US Dollars close to the intersection of Ave. Independencia and Blvd. Sanchez Taboada in Zona Rio. Or you may have learned about the Capital Institute for the first time in the weekly journal Zeta in its articles about the arrest of Miguel Angel Marquez Trevino and his alleged involvement in money laundering.
But if you are not in Tijuana you may have learned about Capital Institute/Capital Bank through the Internet in chat rooms, investment forums about high-yield certificates of deposits or the websites that were found at www.highyieldmexico.com and www.capitalbankmexico.com. You probably read information similar or identical to the information that you can still find at the press release that was originally published on PRweb.com on 11/25/2008 which was later syndicated on many other “news’ websites. You can still find the press release at PRweb.com’s website here: http://www.prweb.com/releases/2008/11/prweb1660394.htm
Interestingly, the contact information listed on the press release is for an individual named Robert Donell and a company called P5 Marketing instead of Miguel Marquez or Capital Institute. It would appear that Mr. Donell through the company P5 Marketing were part of a marketing agency hired by Capital Institute since they are listed as the “Technical Contact” for the domain name highyieldmexico.com at the Internet Whois database at http://www.networksolutions.com/whois-search/highyieldmexico.com where Miguel A. Marquez is listed as the Administrative Contact along with Capital Institute as the Internet domain registrant.
Now, the press release referred to above states in plain terms that Capitalbank of Mexico is a ”…banking institution..” which is ”…chartered by the Mexican Federal Banking and Securities Commission…” and that ”…Capitalbank received its federal licensing and accreditation as a Mexican Savings and Loan Association..” These are representations that would make Capitalbank/Capital Institute appear as a legitimate bank to the unwary.
The press release later quotes Miguel Marquez, who is referred to as the CEO of Capitalbank, as saying:
“Our Savings and Loan Association pays its depositors among the highest returns on dollar-denominated Certificates of Deposit by making high interest, short-term loans to fully collateralized borrowers providing much-needed access to credit. If we have funds that are not being used for loans they do not sit idle. We invest those funds in the $2 billion dollar a year cross-border currency exchange industry between San Diego and Tijuana, both of which provide substantial returns that get passed on to depositors. As a federally-regulated and audited part of the Mexican banking system, we are authorized to receive deposits and lend these funds for the benefit of our depositors. Since interest rates are traditionally much higher in Mexico, we can offer superior rates of return to our CD’s depositors.”
However, Mexico’s National Banking Commission later issued a press release on April 13, 2009 (you can find the original press release it issued here: http://www.cnbv.gob.mx/recursos/023_Capitalbank.pdf) where it stated that Capital Institute S.C. de R.L., which has used the name Capitalbank in its advertisements, is not part of Mexico’s Banking System and that it does not have authorization by the financial regulators to use the name “Capitalbank” in any way. Further, that it was not authorized to receive deposits from the public or perform any activities that are restricted to financial intermediaries (ie. banks). Many investors in Capital Institute/Capitalbank may not have received news of this press release made by Mexico’s National Banking Commission. Capital Institute continued to operate after publication of such press release by the National Banking Commission until November 2009 when it unexpectedly “closed down”.
It turns out that in November 2009 Mexico’s Organized Crime Unit (SIEDO) raided Capital Institute S.C. de R.L. to conduct searches under federal warrants for money laundering activities. Also, Miguel Marquez, the alleged owner of Capitalbank/Capital Institute, was sent to Mexico City for questionning by Mexico’s Federal Authorities. You can read the press release (in Spanish) that Mexico’s PGR (Attorney General’s Office) issued about such raid here: http://www.pgr.gob.mx/Prensa/2007/bol09/Nov/b146009.shtm
The latest development in this story is that on January 22, 2010 Miguel Angel Marquez Trevino was formally indicted for the crimes of 1. organized criminal acts, 2. conducting operations with illegal funds, and 3. possession of illegal ammunitions. Mr. Marquez has been transferred to a Federal Prison in Rincon, Nayarit from where he will probably remain during his criminal trial. You can read the press release (in Spanish) that Mexico’s PGR issued about such indictment here: http://www.pgr.gob.mx/prensa/2007/bol10/Ene/b07010.shtm
Will the legitimate investors in Capitalbank/Capital Institute ever recover their investments? This is a question that remains unanswered.
