Menendez Denies Allegations in New Federal Probe

Friday, 24 Jan 2014 05:17 AM


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Sen. Robert Menendez denied any wrongdoing after NBC reported the Justice Department was probing his efforts to help two fugitive bankers living in Florida avoid extradition to Ecuador.

Investigators are examining whether Menendez, a New Jersey Democrat, broke the law in trying to help William and Roberto Isaias stay in the U.S., NBC said, citing "multiple current and former U.S. officials" it didn’t name. The brothers were convicted in absentia for embezzling millions of dollars from Filanbanco, which they ran before it collapsed, NBC said.

"We are not aware of any inquiry into the senator’s actions on this matter," Tricia Enright, a spokeswoman for Menendez, said in an e-mail yesterday.

Menendez denied allegations last year that he helped Salomon Melgen, a Florida eye doctor and political donor, by intervening in a Medicare-billing dispute and aiding Melgen’s company to enforce a port securities contract in the Dominican Republic. Melgen had been the subject of a Medicare probe, and U.S. agents twice raided his offices.

"A year after a false smear campaign was launched against Sen. Menendez, once again we see anonymous sources making outlandish allegations," Enright said in the e-mail. His office works with hundreds of people each year seeking help with the immigration process, she said.

"Sen. Menendez believed the Isaias family had been politically persecuted in Ecuador, including through the confiscation of media outlets they owned which were critical of the government," she said.

Justice Department spokesman Peter Carr declined to comment.

NBC quoted an attorney for the Isaias brothers, Xavier Castro Munoz, saying they are innocent, didn’t steal money, and are victims of political persecution in Ecuador.

"They have committed the crime of being rich in a poor country," Castro said, according to NBC.

Roberto and William Isaias ran Ecuador’s largest bank, Filanbanco, in the mid-1990s. In 2009, Ecuador sued them in state court in Miami, claiming that they embezzled hundreds of millions of dollars from the bank and transferred “substantial sums” to Florida.

Last May, Circuit Court Judge John Thornton dismissed the complaint, ruling that Ecuador hadn’t met the U.S. legal standards required to seize their property.

Ecuador accused the Isaias brothers of hiding Filanbanco's liquidity problems before the 1998 banking crisis in that country. Ecuador issued arrest warrants for both brothers in 2003. They fled to Miami.

Thornton, citing case law going back to a 1965 case involving the property of King Faisal II of Iraq, concluded that the government of Ecuador had not gotten a court order in its own country to seize the brothers' property. He also said Ecuador’s government decree seeking to seize it violated "several of the most foundational underpinnings of U.S. law and policy, including due process."

"The defendants may have committed the wrongs which Ecuador has alleged," Thornton wrote. "However, the manner in which Ecuador has attempted to right the defendants' alleged wrongs is inconsistent with U.S. law and policy."

© Copyright 2014 Bloomberg News. All rights reserved.

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