The National Bank of Belgium (NBB) announced the 8th of June 2016 that they blocked all customer accounts at Optima bank to ensure that all account holders are treated equally. Rumours, speculation and publications in the media might trigger a bankrun. A day later, all insurance activities of the bank were shut down by the FSMA.
The current situation remains in effect until the necessary procedures to unwind the banking activities of Optima commence. According to the Belgian deposit guarantee scheme, bank customers are entitled to receive compensation from an external fund up to a maximum of 100.000 Euro.
Optima is a financial service provider located in Gent, in the North-Western part of Belgium. The bank had a reputation to involve politicians into its management team or board. Luc van den Bossche, Herman Verwilst and Geert Versnick fulfill different positions over time. Specifically the appointment of Verwilst is remarkable. He used to work as an economist for the International Monetary Fund (IMF).
Optima started as a financial planner in 1991 and focused on estate planning, wealth management and retirement planning. Under a different entity, Optima Global Estate NV, real estate trading took place. The business unit involved in insurance activities took over Ethias Bank in 2011, granting Optima a banking license. At its own request the bank filed for bankruptcy on the 15th of June 2016.
The National Bank of Belgium, as well as the FSMA and BBI suspected since 2012 that the bank was involved in suspicious transactions and perhaps even money laundering. It took until 2016 before the NBB was able to file a formal request with the European Central Bank (ECB) to revoke the banks license.
Activation of the deposit guarantee scheme
Customers of the bank who want to apply for the deposit guarantee scheme need to contact the National Bank of Belgium in Brussels to be guided through the procedures for payout. It is expected that after a process to identify and verify the customer, payout of the account balance with a maximum of 100.000 Euro takes place within 20 working days, in accordance with directive 2014/49/EU.
Creative investments
The district attorney in Gent has serious evidence that Optima offered specific customers ‘interesting solutions’ for undeclared funds. Funds were wired to the insurance unit of Optima. After taking a 3% commission, funds were invested with Lombard International, the ‘global leader in wealth structuring’. Lombard invested the funds in ‘tak 23 insurance products’ with 8 year maturity. Upon maturity, funds were laundered and invested in real estate, insurance products or returned to the investor.
Since the Belgian tax authorities can only retrieve information for as long as 7 years in tax fraud, investigation to the source of funds was not possible anymore.
Optima Bank might have been involved in money laundering and fraud since it was mandatory for the bank to inform the Belgian Financial Intelligence Unit (FIU) when the source of funds arriving from Lombard in Luxembourg was uncertain. Optima failed to file their findings due to the expired 7 year time frame for the authorities to investigate.
Since Optima had a banking license they were able to determine themselves how strict they would follow up on KYC and AML regulations. In the event that the district attorney can prove his findings that result in a verdict against the bank, there can be consequential damages. Not only the banks management but also regular employees can become joint liable for the fraud. An interesting case that can create a precedent for other current bank failures like FBME Bank.
Previous investigation
The BBI, a unit within the Belgian Federal civil service on finances involved in structured investigation against organised and large- scale tax fraud, planned a raid at the premises of Optima bank in 2012. According to Belgian court the BBI went out of line with their visitation procedures and the findings from the raid had to be destroyed.
Personal money laundering accusations
Jeroen Piqueur, the late CEO of Optima Bank is personally prosecuted by the district attorney in Gent on the indictment of large-scale tax fraud. Between 2007 and 2013, Piqueur concealed an estimate of 22 million Euro in income and avoided 3 to 4 million Euro in taxes. Furthermore, Piqueur spend 19,9 million Euro on a luxury yacht, for personal use, funded through an offshore company. Although tax avoidence per se is not punishable, the execution of the rules must follow a strict path to be allowed.
Evidence shows that Piqueur was the beneficiary of offshore companies with accounts in Luxembourg and Monaco. Both the Belgian Government as well as the prosecution claim compensation. Additionally, court can issue jail time or a fine. The case continues in March 2017 and is independent and separated from the case against Optima Bank.