After a trial lasting more than six years, those responsible for fraud, mismanagement, forgery and the collapse of Banco Português de Negócios (BPN) have been given prison sentences, the highest of which is 14 years with eight of them 'suspended.'
BPN ended up being run for the benefit of members of its crooked management and went bust in 2008, triggering a State bailout that so far has cost the public purse over €3 billion.
The bank was sold to the Angolan Banco BIC in 2011 for just €40 million after the government threw €1.8 billion at the problem instead of letting the institution go under.
The man in charge at the time, José Oliveira e Costa, the bank’s CEO between 1997 and early 2008 when he resigned citing poor health, has been handed a 14 year prison sentence which could see him end his days inside a jail as he is now 81.
The Public Prosecutor's Office had asked the court for a prison sentence of between 13 and 16 years for Oliveira e Costa who was charged with tax fraud, money laundering, forgery, abuse of credit and illegal gains.
Leonel Gaspar, a lawyer for Oliveira and Costa, said he would study the ruling and then advise his client on a possible appeal. Leonel Gaspar believes the former banker "is a serious man." "My conviction is that this man did not appropriate a penny for his own benefit," the lawyer told reporters, with a straight face.
Luís Caprichoso, former manager of BPN, considered by the Public Prosecutor's Office as "number two of the group", was sentenced to 8 and a half years in prison, for the falsification of documents and another of qualified fraud.
Francisco Sanches, a former manager of BPN, was sentenced to 6 years and 9 months in prison for falsification of documents, qualified tax fraud and qualified fraud.
José Vaz de Mascarenhas, a former president of Banco Insular, received 7 years and 3 months for felony, abuse of trust and qualified fraud.
For Telmo Reis, founder of Labicer, the Public Prosecutor's Office requested a sentence of between seven and eight years in prison, but the judges decided on five.
Luís Almeida was sentenced to four years and three months with suspended sentence, Luis Alves to two years, José Monteverde to 4 years with suspended sentence, Rui Costa to 4 years with suspended sentence and António Franco to 3 years with suspended sentence.
The sentences were read out in the absence of Oliveira e Costa as he had an operation on May 10th and was still recovering.
Oliveira e Costa was arrested in November 2008 and, in July of the following year he was put under house arrest. In November 2010, he was released but could not leave the country without the judge's permission and he had to report weekly to the Lisbon Criminal Court.
BPN was 'nationalised' on 2 November 2008, with the government claiming that the bank had suffered €700m losses. Those losses were racked up in offshore, off-balance-sheet operations, according to the Bank of Portugal.
The trial that ended today began in December 2010 and claimed twelve convictions with Ricardo Oliveira, Filipe Baião Nascimento and Hernâni Ferreira acquitted due to lack of evidence.
The reading of the judgment began at 10:00 on the morning of Wednesday, May 23rd, and continued for several hours with the judge, Luís Ribeiro, running over a series of serious crimes, beginning in 2001, which led to the ruin of the bank and its controversial bailout.
The Bank of Portugal at that time was run by Vítor Constâncio. When BPN collapsed there was heated argument as MPs said Constâncio had the means to prevent the BPN collapse but that he did nothing, (not realising that Governors of the Bank of Portugal are meant to look busy while doing nothing.)
After this disatrous performance as the head of Portugal's central bank, in December 2010, Constâncio was appointed vice president of the European Central Bank, for an eight-year mandate, being responsible for banking supervision.
The case of BPN was particularly serious because of its size, market share, and the political implications. Portugal's then President, Cavaco Silva, and some of his political allies, maintained personal and business relationships with the bank and José Oliveira e Costa, who was charged and arrested for fraud and other crimes.
On the grounds of "avoiding a potentially serious financial crisis in the Portuguese economy," the government baied out the bank at a huge loss to hapless and impotent taxpayers.
As for being marched off to jail, those with suspended sentences of course can now go home and the others will tie up the judicial system for years with their long-winded appeals.
The chances of Oliveria da Costa doing any jail time? Close to zero. It's good even for crooks to have friends in high places...
