The Guayas district attorney lay charges of embezzlement on the bank’s CEO, Paúl Sánchez. 

The government closed the financial institution last week for solvency and liquidity problems.

At the hearing where Sánchez was formally charged, A.D.A. Daniel Rodriguez requested remand for Sánchez, and judge Ángel Moya agreed.

Sánchez will be confined for 90 days while the investigation into the bank is underway. If other suspects are found, this period of could be extended.

The DA is also seeking remand for Pietro Francesco Zunino, the banks legal representative and main shareholder. But according to rumours, Zunino may have left the country last week. He could be tried in absentia on the embezzlement charges.

After his preliminary hearing, Sánchez was transferred to the penitentiary in Guayaquil (Penitenciaría del Litoral). A conviction would carry a sentence of four to 12 years.

Assets laundering

Galo Chiriboga, the State’s attorney general, has warned of a possible assets laundering operation uncovered by the criminal investigation into the Banco Territorial.

On Monday the bank was shuttered for liquidity problems, which caused the formulation of the embezzlement charges. But the assets laundering investigation is a new development in the state’s case.