Former CEO indicted for $100M fraud that collapsed Puerto Rico bank

The former CEO of now-defunct Inyx Inc., was charged with eight counts of wire fraud in connection to a $100 million pharmaceutical fraud scheme. The indictment was filed on August 4, 2016, in the Southern District of Florida, and the former CEO was arrested and made his initial appearance Friday, September 30, 2016. The fraud scheme is alleged to have led to the collapse of Westernbank Peurto Rico (Westernbank).

Scheme

During the former CEO’s tenure, which lasted 2005 to 2007, he and other conspirators provided a security interest in Inyx’s assets, as well as its subsidiaries’ assets, in order to receive loans and lines of credit. To facilitate these loans, the former CEO allegedly submitted false and fraudulent invoices as collateral and made false representations about intended loan repayments and the value of the assets pledged as collateral. The government also alleges that he misappropriated $25 million in company funds to his personal accounts and $9.6 million to an associate’s account.

Inyx was previously traded on the Nasdaq Over-the-Counter Bulletin Board. In 2007, the company filed for bankruptcy.