El Salvador: The role of Financiera de Inversiones Seguras y Productivas (FINSEPRO)
| Publisher | Canada: Immigration and Refugee Board of Canada |
| Author | Research Directorate, Immigration and Refugee Board, Canada |
| Publication Date | 9 September 2002 |
| Citation / Document Symbol | SLV39333.E |
| Reference | 2 |
| Cite as | Canada: Immigration and Refugee Board of Canada, El Salvador: The role of Financiera de Inversiones Seguras y Productivas (FINSEPRO), 9 September 2002, SLV39333.E, available at: https://www.refworld.org/docid/3f7d4e1931.html [accessed 17 September 2023] |
| Disclaimer | This is not a UNHCR publication. UNHCR is not responsible for, nor does it necessarily endorse, its content. Any views expressed are solely those of the author or publisher and do not necessarily reflect those of UNHCR, the United Nations or its Member States. |
The financial institution FINSEPRO and its partner organization INSEPRO were savings and loans companies that took deposits from clients with the promise of high interest rate returns (Central America Report 24 July 1997).
FINSEPRO was created ten years ago to replace its predecessor, INSEPRO. The bulk of savers' money was deposited in INSEPRO, which operated illegally as it was not registered with the Financial System Superintendant (SSF) [Superintendencia del Sistema Financiero].
Hill [Chairman of INSEPRO/FINSEPRO] convinced people who wanted to place their savings in FINSEPRO that putting money in INSEPRO would yield a greater return of 20% or more, four to five percent higher than the market rate of interest (ibid.).
The money invested in INSEPRO was then diverted to FINSEPRO in order to alleviate financial problems of other companies owned by the Hill family (ibid.). Consequently,
...while the fraud prevented the Hill family's companies from going bankrupt, redirecting the funds to FINSEPRO meant that INSEPRO lost its necessary liquidity to meet interest payments for depositors (ibid.)
In July 1997, authorities discovered the financial irregularities of FINSEPRO/INSEPRO transactions, and Hill and his associate Mario Galdamez were arrested for fraud (EFE 7 June 2001; Central America Report 22 June 2001). A report by INTERPOL stated that "the main people involved in the transactions were Mathies Hill, Michel Laennec and Roberto Annicchiarico" (ibid. 22 June 2001). For more information about Hill, please refer to SLV39335.E of 3 September 2002.
Subsequently, a government organization called the Special Fund for the Victims of the Financial Group INSEPRO (Fondo Especial de Afectados del Grupo INSEPRO, FEAGIN) was created in September 1997 and seized control of all assets and properties belonging to INSEPRO/FINSEPRO (El Diario de Hoy 9 July 2002; La Prensa Grafica 9 June 2001). For more information about FEAGIN please refer to SLV39336.E of 29 August 2002.
In regard to the outcome of the FINSEPRO/INSEPRO fraud case:
Most of the money in question has yet to be located. The laundered money that was found had been deposited in various accounts in Miami banks.
Transactions were also identified in Switzerland and Luxembourg, in addition to the creation of the companies Secure Investment Corps. and Palter Financial Corporation in the Virgin Islands, in the Caribbean (Central America Report 22 June 2001).
Hill and Galdamez were eventually acquitted of fraud (EFE 7 June 2001), which left observers with a number of questions, "the primary being why only two men were prosecuted when more were signaled by the international police" (Central America Report 22 June 2001). In addition, "many observers say the evidence against the suspects was strong, and that government officials were involved" (ibid.).
For more information about the FINSEPRO/INSEPRO investigation, please refer to SLV32800.E of 23 September 1999 and SLV39334.E of 3 September 2002.
This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. Please find below the list of additional sources consulted in researching this Information Request.
References
Central America Report. 22 June 2001. Vol. 28, No 23. "El Salvador: Fraud Case Puts Justice System into Question."
_______. 24 July 1997. Vol. 24, No.28. "El Salvador: Double Dealing in Savers Security."
EFE. 7 June 2001. "Hispanics - El Salvador/Artiga Discontent Over Acquittal of Mathies Hill." (Financial Times Information 8 June 2001/NEXIS)
El Diario de Hoy. 9 July 2002. "Mario Galdamez: 'Mis hijos me robaron todo." La Prensa Grafica. 9 June 2001. "FEAGIN: utopico recuperar fondos de depositantes." Additional Sources Consulted
IRB databases
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World News Connection
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