(AP) U.S. financial analyst Peter Schiff told The Associated Press on Friday that he will fight to be able to sell a bank he established in Puerto Rico even though authorities have suspended its operations as part of an investigation.
Euro Pacific International Bank obtained a license in 2017 to operate in the U.S. territory and built up some 15,000 accounts two years later, but its deposits have dropped to $150 million and it lost customers after the Joints Chief of Global Tax Enforcement — a multi-government group fighting tax crimes and money laundering — said it acted two years ago “to put a stop to the suspected facilitation of offshore tax evasion and money laundering by the bank.”
“We lost a lot of things because people were afraid,” Schiff said.
He added that while he doesn’t like anti-money-laundering rules, or regulations or taxes, he does abide by them.
“The fact that I’m so willing to publicly criticize rules, you better believe I’m doing all I can not to break them,” he said.
The so-called J5 agency, whose members are the U.S., the UK, Canada, Australia and the Netherlands, said Thursday that an investigation into the bank is still ongoing, although it declined to provide details.
Schiff said that was a lie, that the bank has never been investigated. He said agents with the Internal Revenue Service visited the bank in 2020 and told him they were investigating customers of the bank.
“Our compliance is so rigorous, and we close accounts so quickly,” he said, adding that he never took clients related to cryptocurrency, cannabis or other fields. “I did everything by the book, and it cost me a fortune.”
A spokeswoman for J5 did not return a message for comment Friday.
Schiff said he also was upset that the bank’s operations were suspended by Puerto Rico’s Office of the Commissioner of Financial Institutions, which announced the move on Thursday and accused the bank of a lack of internal controls, a lack of compliance and a level of insolvency. Officials declined to provide details, except to say it was separate from the J5 probe.
“It’s a huge shock that they’ve done this,” Schiff said of the bank’s suspended operations.
Schiff said that while he didn’t realize the bank was undercapitalized until it was audited, he stressed it was not a matter of solvency but regulatory minimum capital requirements. He said the bank always has had a positive net worth and that while there was a deficiency based on deposits, the commissioner told him not to worry because a buyer had appeared.
Schiff said a Houston-based bank wanted to buy Euro Pacific International Bank and that he submitted an application in January to start the process.
“They were going to rename it, rebrand it, so it would no longer have that stigma,” he said.
Puerto Rico’s Office of the Commissioner of Financial Institutions did not return a message for comment.
Schiff said he has invested $7 million of his own money to keep the bank afloat and that all customers can get 100% of their money back.
“Right now, not a single customer is in jeopardy,” he said.
