They have sued Monex after its representative allegedly stole US $40 million from clients
A Mexican financial services company has attempted to resolve a multi-million-dollar fraud involving expatriates and others in San Miguel de Allende with an offer to reimburse them with 60 cents on the dollar.
But two brothers from the United States have chosen legal action instead.
Jim and Ken Karger are among investors from several countries who charge that their savings were stolen from their Grupo Financiero Monex accounts in Mexico. More than 50 retirees in San Miguel discovered early last year that their accounts had been emptied.
An investigation by Mexico News Daily published last June found that an estimated US $40 million from more than 150 Monex accounts belonging to United States, Canadian, British, European and Australian expatriates was stolen via an alleged decade-long Ponzi scheme.
The banker who allegedly defrauded the Karger brothers and other victims, was Marcela Zavala Taylor, an English-speaking woman who provided personal banking services to Monex clients. However, after the millions went missing, she stopped all correspondence with her customers.
Monex has denied any responsibility for the fraud, filing a criminal complaint against Zavala and declaring that she acted alone.
Some defrauded customers who settled with the bank, often for amounts much less than their losses, were asked to sign an agreement that blamed Zavala alone for missing funds.
Meanwhile, Monex has continued to argue with other defrauded customers about how much money they should get back, Bloomberg said in a report published on Thursday.
Several victims said they didn’t consider legal action because they believed that any settlement they won would likely be eaten up by lawyers’ fees.
The Kargers, on the other hand, “won’t back down,” Bloomberg reported.
The news agency reported that the brothers, who have a private lending business in San Miguel de Allende, turned down an offer for about 60% of their principal in US dollars, choosing instead to launch legal action.
Jim Karger told Bloomberg that they had cash in a Monex bank account and shares in Apple Inc. and Tesla Inc. in a brokerage account, which was allegedly drained. When the brothers began speaking to Monex about their missing money a year ago, they were told that their account had been in pesos although Zavala had told them that it was in dollars.
As the peso has lost value in recent years, the amount they would get back from the bank if they opted for settlement would be much lower than their initial investment. Instead, Jim and Ken Karger are suing for their principal investment in US dollars, Bloomberg said.
“Most people settled for less than principal because they can’t afford to do what we’re doing,” Ken Karger said. “It may be a long shot, but what we’re doing will punish the bank, which will force them to the table.”
The brothers have also set up a website – bancomonexfraud.com – that is designed to draw attention to their case and help other people who have lost their savings. It features news stories and other information about the fraud allegations against Monex as well as an open letter to chief financial officers responsible for funds in Mexico.
According to Bloomberg, Jim and Ken Karger want their cash but also want to make a point that the Mexican banking system should take responsibility for the actions of employees.
To date, the brothers have spent US $150,000 trying to get back about $1.5 million that they say they lost.
“This is a cause, and it’s bigger than Jim and me,” said Ken Karger, a retired dentist who lives in Fort Worth, Texas.
Legal actions filed by him and Jim Karger, who had a labor law firm in Dallas before moving to San Miguel 18 years ago, are aimed at having federal financial crimes prosecutors take up their case. The brothers want them to investigate Monex, its employees and Zavala, their one-time personal banker.
They hope that a two-year-old law that says that financial companies can be held accountable for the actions of their employees and agents will help their cause.
“Monex is trying to let everyone believe that Marcela was the only one involved,” Antonio Holguin, an attorney representing the Kargers, told Bloomberg.
We think she was not the only one responsible. She was using tools of the bank, so the bank as an entity should face criminal charges.”
However, proving that Monex is responsible could take a very long time, according to Kevin Carr, founder of financial technology company Finiden in Washington, D.C. and a former primary representative of the United States Treasury Department Mexico.
He told Bloomberg that cases can take years and that courts often attempt to push opposing parties towards settlement. That makes legal action risky, Carr said.
Monex spokesman Fernando García told Bloomberg via email that the bank has been cooperating with investors and has settled with all but three clients who claimed to have been defrauded.
“It is up to the judicial system to determine those responsible,” García wrote. “Monex Financial Group reiterates that it is an institution that acts with strict adherence to national and international standards.”
Bloomberg said that its attempts to contact Zavala and her lawyer were unsuccessful.
Monex: Money From Missing Foreigners
This article appeared on Atencionsinmiguel.org. The original article can be read here .
Attention.Org Post : The Monex case: thousands of dollars of foreigners in San Miguel disappeared
Dozens of foreign expats in San Miguel invested their money with Grupo Financiero Monex, a Mexican company that offered financial and banking services in San Miguel de Allende until 2015, when it closed its offices in the city. However, he continued to do so from the corporate office in Querétaro until December 2018, when San Miguel customers realized that their accounts were empty, as some of them indicated for San Miguel Care. Because of this, we approached Monex and also some of the clients that would have lost their investments. Next, we present their stories.
The Monex Financial Group website states that they are a 100 percent Mexican company that offers high quality financial products and reliable services to clients in Mexico and abroad. “With more than 32 years of presence in the country, Monex is an innovative institution, formed by three financial entities: Monex Bank, Monex Casa de Bolsa and Mónex. Operator of funds through which it offers products for commercial banking ”and also for private banking.”
The offices in San Miguel, closed in 2015, were located next to the Angela Peralta Theater on Calle Mesones. It was a very popular business among its customers, mainly for its service, which in some cases was given at home.
Customers affected by the losses of their investments realized what was happening by the comments of other people also affected. One of the clients told Attention that as soon as he learned that he filed a lawsuit against Monex and that he was responsible for the lack of money in his account. The client told Attention that he believes that the promoter of the company in San Miguel would have helped, along with other accomplices, to make the money disappear. He said he is doing his own research and is very close to having a result.
The names of the affected customers (who requested anonymity) are not real.
In a house in the Historic Center, I met Emily Winterle, who visited the city in 1970 and then moved. He had in mutual funds with the company for more than 400 thousand dollars; He had two other accounts in other banks where electronic transfers were made when requested.
“The developer always told me that half of my investment was in Volaris and Walmart-Emily, you don’t have to worry about anything, you’re making a lot of money. Don’t worry, the promoter told those affected. ” I was confident that I was making money. But in the end it turned out that no, my money was never invested and I had no profits. “Every time I asked the representative in San Miguel for account statements, or the cash sent them to Winterle with a delivery man (on a motorcycle). In December 2018, when he needed money for medicines, services and other expenses, he asked. The cash promoter, however, never received a response, and then realized that there was a shortage of almost ten thousand dollars in his savings. Now work with Monex so they can return your money.
In 2012, a couple invested all their savings in Monex with the promise of receiving a 10 percent interest. The first 18 months received the account statements, then they were only sent by email when they were requested from the promoter; Transfers were made to another bank, also requested by mail.
After realizing, through comments from friends and acquaintances, that several accounts had been emptied, the couple attended several meetings in Querétaro. There, a bank lawyer allegedly told them that his money had been illegally withdrawn months after he had deposited it. Michael Stewart, the husband, believes that “that means that the account statements the promoter sent us were made by her to cover the fraud and not the bank.”
After several meetings in Querétaro, San Miguel and Mexico City, and facing language barriers, because Monex representatives do not speak English, Stewart said he received his check after signing several documents, of which he does not even have a copy No pictures.
Now, after the money was returned, he received a call from an “Alfredo,” an alleged Monex lawyer, to tell him that the bank had found new evidence from the developer and now owes the company more than $ 50,000 without However, he hasn’t called again. “My acquaintances told me it was unusual for these claims to be made over the phone.”
Refund at Price 2012
Another couple, from the United States, Mathew and Anna, received an inheritance and decided to invest about 50 thousand dollars in Monex. “The dollar was twelve pesos then.” Investors received their account statements and seemed fine.
“In January we learned from a friend, that Monex’s accounts were empty, we called immediately and, indeed, there were less than a thousand pesos in our account.” After several meetings, Monex agreed to give them their money, but paying the dollar at 12 pesos (2012 rate) and without interest. In the end the couple agreed to receive the amount.
“We not only blame the representative in San Miguel, but the entire company, it is impossible that the departments have not realized what was happening and have no records. They must be friendlier and pay the correct amounts to maintain their reputation if they do not want to commit fraud, ”they said.
Attention, Monex Financial Group was contacted, however, it was its Public Relations representative, Fernando Garcia, who said he could not give more information because the company’s internal comptroller is conducting an investigation. He also assured that each specific case will be reviewed. Garcia sent us a response to a press release, where Monex identifies Marcela Zavala Taylor as the promoter for which customers are responsible for managing their accounts where they lost money. The press release reads as follows: “Monex Financial Group Reports:
Given the indications against Promotora Marcela Zavala Taylor, regarding alleged irregular movements in the accounts she attended in San Miguel de Allende, Guanajuato, the Comptroller’s Office of this Financial Institution carries out the corresponding investigations to determine the responsibilities.
Legal actions are being taken on the case, so the details cannot be disclosed so as not to impede the investigation. We have made significant progress with Clients who have made a clarification in writing and the situation is being addressed with each of them. Any unusual activity will be reported and requested to be investigated and, where appropriate, punished by the corresponding Authorities, at the time that all security guarantees for our Clients are provided.
Monex Financial Group reiterates that all its companies and operations comply with the law and are supervised by the competent authorities, both nationally and internationally.
Who Protects the Investor?
Banco Banregio staff said for this media that when a person places their savings in a banking institution registered with the authorities, they are protected by financial laws, including the Credit Institutions Law.
They also indicated that when people deposit their money in a bank, it is protected by the IPAB (Institute for the Protection of Bank Savings). According to the Investment Law, from the moment a person opens an account, it is insured by the bank.
On the other hand, the IPAB on its website indicates that bank savings: term deposits, savings accounts, checking accounts, payroll accounts, checking accounts, among others, are protected up to 400 thousand UDIS (2,508,467.20 pesos).
The attention tried to locate the representative of Monex, Marcela Zavala Taylor, but it was impossible, in addition to the clients who reported that she has not been able to locate since December 2018.
On the other hand, we talked to a former Monex collaborator, who thought that Monex would negotiate because that is what the company does, in addition to the Law, the Condusef and the IPAB protecting the investor. And he said: “If there is embezzlement, it could be linked to the trust that clients place in the representative; but Monex must also know the type of staff he hires. ”
Source: Milenio, Bloomberg, mexico news daily, bancomonexfraud.com
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