Liquidation Com'n of Banco Intercont. v. Renta, No. 06-15388.

• Citation: 530 F.3d 1339
• Decision Date: 19 June 2008
• Docket Number: No. 06-15388.
• Parties: LIQUIDATION COMMISSION OF BANCO INTERCONTINENTAL, S.A., Plaintiff-Counter-Defendant-Appellee, v. Luis Alvarez RENTA, Wadeville Investments, Ltd., Defendants-Counter-Claimants-Appellants, Bankinvest S.A., et al., Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

530 F.3d 1339

LIQUIDATION COMMISSION OF BANCO INTERCONTINENTAL, S.A., Plaintiff-Counter-Defendant-Appellee, v. Luis Alvarez RENTA, Wadeville Investments, Ltd., Defendants-Counter-Claimants-Appellants Bankinvest S.A., et al., Defendants.

No. 06-15388.

United States Court of Appeals, Eleventh Circuit.

June 19, 2008.

Mark Hicks, Hicks & Kneale, P.A., Miami, FL, for Defendants-Counter-Claimants-Appellants.

Bryan Thomas West, Matias Rafael Dorta, Tew Cardenas, LLP, Miami, FL, for Plaintiff-Counter-Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before DUBINA and KRAVITCH, Circuit Judges, and COOGLER,^* District Judge.

KRAVITCH, Circuit Judge:

This civil RICO and fraudulent transfer case is a result of the 2003 collapse of Banco Intercontinental SA (BanInter), which at that time was among the largest banks in the Dominican Republic. After its collapse, the affairs of BanInter were taken over by the Commission,¹ a receivership established by the Dominican government. The Commission brought this suit against Luis Alvarez Renta, a Florida businessman, claiming that Renta, with the help of BanInter insiders, wrongfully diverted millions in BanInter funds to finance other business ventures and personal expenses.

Three RICO claims and one fraudulent transfer claim were tried to a jury, which returned a verdict for the Commission in all respects. After trebling of the racketeering damages, the judgment totals approximately $177 million. Renta now appeals, arguing that the entire case should have been dismissed for forum non conveniens, that the RICO claims should have been dismissed for unripeness and because the statute cannot apply extraterritorially, that he is entitled to judgment as a matter of law or to remittitur, and that the district court erred in denying post-judgment relief. Our review uncovers no reversible error.

I.

The evidence at trial, taken in the light most favorable to the verdict, see United States v. Ward, 486 F.3d 1212, 1215 (11th Cir.2007), showed the following.

A. The Parties

Defendant-appellant Renta is a dual citizen of the United States and the Dominican Republic. In addition to undergraduate and graduate training in economics and finance, Renta had years of business experience as an accountant, management and financial consultant, and as manager or director of various family corporations and trusts. At the time of the events in question, he worked as a turnaround specialist; in particular, he helped rehabilitate distressed debt. Renta and his family also owned several companies and trusts, including separate operating, financing, and holding companies. One of those companies was Bankinvest, a defendant below² but not a party to the appeal. Bankinvest is a Dominican corporation of which Renta was president and which his family controlled. Renta stated he used Bankinvest as a vehicle for raising capital to make commercial loans, the interest and fees from which were paid to Bankinvest, but the Commission presented evidence that Bankinvest was used primarily as a conduit to move money from BanInter to other entities. Bankinvest had checking accounts at BanInter and at The International Bank of Miami (TIBOM) over which Renta had signatory authority at all pertinent times, even after, as explained more fully below, he sold Bankinvest in August 2001.

Ramon Baez-Figueroa was not a defendant in this case, but played a major part in the story. Baez-Figueroa, a prominent Dominican and Renta's relative by marriage, was the President and majority owner of BanInter, and had effective control over its operations. Like Renta, he had a hand in several other business ventures, including a series of duty free stores that eventually became Interduty Free, Ltd., a British Virgin Islands corporation and a defendant below. Baez-Figueroa and Renta entered into an agreement whereby Renta would attempt to rehabilitate the struggling duty free stores, in part by using Bankinvest's good credit. Later, once the stores were on their way to rehabilitation, Renta sold Bankinvest (which by then had an equity stake in the duty free stores) to Baez-Figueroa in August 2001.

Renta is also the sole director and a minority shareholder of appellant Wadeville Investments, a corporation owned and controlled by the Renta family. Wadeville is not an operating company. Its sole purpose is to have a bank account at BankAtlantic, from which Renta pays personal and business expenses.

B. The Bank Transfers

The centerpiece of this case is a series of bank transactions, occurring between January 2000 and February 2003, which proceeded in similar patterns. The parties do not dispute that these transactions occurred nor that Renta ordered them, but they sharply dispute their nature and significance. The Commission argued, and the jury believed, that the funds transfers were simply looting of BanInter. Renta argued that the funds transfers were returns of his capital investments in, or payments on loans that he made to, the duty-free stores.

In each transaction, Renta would take some step to cause BanInter funds, typically held in BanInter's dollar-denominated accounts at American banks, to be transferred to an account of Bankinvest (at TIBOM) or Interduty (at BankAtlantic or Hamilton Bank). Although they all had the same effect, namely transferring money from BanInter to a Renta-controlled entity, the transactions took several different forms. Sometimes Renta signed a letter to BanInter requesting a simple transfer of BanInter's funds to Bankinvest. Typically, the letter request would state that the requested funds were needed to pay on a letter of credit for which Bankinvest was a guarantor. On other occasions, Renta would direct BanInter to debit Bankinvest's account at BanInter in a particular amount, and then direct BanInter to transfer those funds to some other entity. But because Bankinvest's account at BanInter was perpetually overdrawn, each of the initial debits was, in substance, a loan or transfer of funds from BanInter to Bankinvest.³ On other occasions, BanInter would, at Renta's request, issue a standby letter of credit for Bankinvest in favor of another Bankinvest creditor, such as TIBOM. In those cases, BanInter ultimately paid on each letter of credit.

Although most of the transfers were initially made from BanInter to Interduty or to Bankinvest, the transferred funds did not remain there long. Rather, the evidence showed that on most occasions, money transferred from BanInter to Bankinvest was subsequently transferred elsewhere. Sometimes the second transferee was Interduty, but frequently the funds found their way into the hands of entities controlled by Renta⁴ or Baez-Figueroa.⁵ Typically, the second transfer was for the exact same amount as the request for funds from BanInter. These subsequent transfers were often carried out the same day, or within a few days, of the request for funds from BanInter. On some occasions funds were transferred to Interduty, and ultimately used to pay its debts, even when Renta (or his subordinates acting at his direction) represented to BanInter that the requested funds were to be used to pay on a different letter of credit for which BankInvest was a guarantor.

Altogether, Renta endorsed forty six such transactions which resulted in the transfer of $48,455,625 in BanInter funds to the bank accounts of Interduty, entities controlled by Renta or Baez-Figueroa, or, in a few cases, their personal creditors. Of that $48 million, about $33 million ended up in Wadeville, Renta's personal bank account.

Meanwhile, these funds transfers were not acknowledged on BanInter's public records. Indeed, BanInter's auditors at Price Waterhouse Coopers were unaware of them until after BanInter's collapse in the spring of 2003. The transfers were booked as "loans" on a secret, parallel set of accounting records. This parallel set of books had its own computer accounting system and operated as a "bank within a bank." Only transactions between entities controlled by Baez-Figueroa were kept on the parallel books, known within the bank as the "VP Portfolio."

Of course, the "loans" in the VP Portfolio were treated differently from other loans by BanInter. Normally, a credit committee would assess the viability of a loan before approving it, and it would appear on the public books. But the VP Portfolio "loans" to Bankinvest were approved solely by Marcos Baez-Cocco, BanInter's Executive Vice President, and booked on the secret parallel accounting system at his direction. In addition to the surreptitious booking, there were also irregularities about the interest rates attached to these "loans." The promissory notes (described below) which ostensibly corresponded to the "loans" to Bankinvest were sometimes recorded in the parallel bank at different interest rates than the notes stated on their face. In fact, some were recorded as zero percent loans. But once the Dominican government attempted to arrange a merger between BanInter and Banco del Progreso, the VP Portfolio loans were hurriedly moved to the public books and, at Baez Cocco's direction, were all given a twelve percent interest rate. Public acknowledgment of the VP Portfolio loans significantly altered BanInter's balance sheet.

Renta maintained that he did not know about the parallel books.

C. The Notes

Each transfer of funds described above corresponded to a promissory note, or a similar Dominican instrument called an unica de cambio, signed by Renta on behalf of Bankinvest.⁶ In other words, each note ostensibly promised to repay⁷ the same amount as one of Renta's requests for funds or security from BanInter. The notes ostensibly obligated Bankinvest to repay BanInter the same amount BanInter had just transferred to Bankinvest, or which it eventually paid a creditor on behalf of Bankinvest. The promises to repay were undertaken by Bankinvest even when BanInter transferred the...