João Rendeiro, disgraced founder of the now-defunct bank Banco Privado Português (BPP), is convicted and sentenced to five years in jail for crimes of fraud and falsifying documents.
Including Reneiro, five former BPP administrators in total were on trial, but only three appeared in court: Rendeiro’s former right-hand man Salvador Fezas Vital, and the two former cadres Fernando Lima and Paulo Lopes. Paulo Guichard, who did not appear in court, was also sentenced, Observador reported on Monday.
Judge Emilia Costa took nearly two hours to list the crimes of which they were accused, how they were tried, and how they assessed the preliminary issues raised by all the defendants.
Convicted Bankers Can Skip Jail if They Pay Fines
In the end the judge ended up condemning the three administrators to jail sentences that could be suspended if they paid a value to a private social solidarity institution. The amounts Judge Costa set depended on the defendants’ current economic conditions and also on their responsibilities in the case.
Rendeiro was sentenced to five years in jail, which could be suspended if he paid 400,000 euros to the Associação Crescer. Guichard was sentenced to a four-year and three-month prison sentence that could be suspended if he paid 25,000 euros to the Centro de Apoio Social dos Anjos. For his part Vital was sentenced to three and a half years in jail, which could also be suspended on payment of 15,000 euros to Cais Lisboa.
The three defendants facing jail time have six months after the case resolves to do so, otherwise they will be arrested. However, they can still appeal the ruling, delaying payment for another few years.
For the two additional culprits, Lima saw the jail sentence of one year be replaced by a fine of 5,400 euros, while Lopes was sentenced to one year and nine months suspended for the same period.
The Crimes of BPP
BPP collapsed in 2010, but it started to unravel back in 2009 when a Bank of Portugal enquiry started to look into Rendeiro’s role in the bank’s liquidity crisis and uncovered a matrix of offshore companies used to support the share price of the bank, according to Algarve Daily News.
Th defendants were accused of selling banking products to their clients and of concealing part of their conditions from the auditors and the Bank of Portugal. For example, they offered products with absolute returns, whose guarantees were hidden from the reports, which gave the appearance that the bank was always “financially robust,” even when it had a loss of 40 million euros that it tried to hide through one of its many offshores.
The judge pointed out that, in order to obtain the amounts they had contracted with clients, BPP made “fictitious sales of securities” in order to obtain the contractual value – so that “those who paid were the other customers who contracted services, not BPP.”