In a recent hearing before the Senate and House Committees on Judiciary and Governmental Affairs, Independent Counsel Nelson Werner revealed that there is a probe being conducted to assess criminal liabilities arising from the collapse of the bank.
The PSB was the first locally owned bank in Palau and had 7,000 customers and more than $20 million in deposit when it was declared insolvent and placed under receivership in Nov. 2006.
The Independent Counsel earlier said that he will hire a forensic accountant to help in the investigation of the circumstances leading up to the collapse of the defunct bank.
Forensic accountants may be involved in recovering proceeds of crime and in relation to confiscation proceedings concerning actual or assumed proceeds of crime or money laundering.
The forensic accountant can re-create or digest financial transactions to get a complete picture of what led to the bank’s failure.
Another expert is helping with the investigation.
President Toribiong in an interview reiterated that there isa clamor in the Palauan community that action is taken on the matter.
Previous criminal cases, handled by the former Independent Counsel filed in connection with the bank’s collapse have been dismissed.
Werner has filed a civil action suit in February – it was the third amended complaint, with 19 different causes of action.
The complaint ranges from negligence, breach of duty of care, gross negligence, breach of fiduciary duties, breach of duty of loyalty, embezzlement, conversion, fraud, intentional misrepresentation, intentional concealment, conspiracy to commit fraud, violation of the Financial Institution Act and breach of promissory note among others.
The complaint named former officers and directors of the defunct bank in the suit.
The 60-page complaint stated that these officers and directors engaged in a “systematic and purposeful scheme consisting of insider loans, self dealing, embezzlement, misappropriation of corporate opportunity and fraud.”
The complaint said that the officers and directors converted to their personal use and possession the sum of at least $16,000,000.
