Bancrédito International Bank & Trust wasn’t a Wall Street giant. It was a boutique Puerto Rican bank, licensed to handle international business but small enough that few outside the island had heard of it. Yet in the world of financial compliance, size doesn’t matter. Every institution, no matter how small, lives under the watchful eye of regulators—both local and federal. And that’s where Bancrédito’s story begins: with a set of lawyers who once praised its compliance, then later helped it admit to failings that carried a $15 million price tag.
Back in 2020, the bank’s lawyers—seasoned professionals from well-known firms—were confident. They assured Puerto Rico’s regulator that Bancrédito’s anti-money-laundering controls were solid. “Risk-based, robust, adequate,” was the language. They even reminded regulators that deciding whether to file suspicious activity reports was subjective judgment—not an exact science, but a matter of careful discretion.
Their defense worked. The regulator settled for a modest fine—less than $100,000—and required some program improvements. For Bancrédito, it felt like the storm had passed.
But just three years later, those same lawyers were at the table with FinCEN, the U.S. Treasury’s f inancial crimes unit. This time, instead of defending the bank’s judgment calls, the lawyers guided it to accept the opposite story: that its compliance program had “deteriorated over time” and that it had “willfully” failed to report suspicious transactions.
What “Willful” Really Means
To outsiders, the word willful sounds like intent—like the bank knew what it was doing and ignored the law. But in civil enforcement, willful has a much lower bar: reckless disregard or willful blindness.
That’s why Bancrédito’s shareholder says the lawyers had a clear path to fight. They could have pointed to the very letter they wrote in 2020, to independent audits that gave the bank passing grades, and to the fact that management was relying on expert legal advice at every turn. Those arguments, if raised, could have spared the bank from the worst outcome. Instead, they were abandoned.
By the time FinCEN came calling, Bancrédito wasn’t run by its board anymore. It was in receivership, managed by a private firm tasked with liquidating assets. That receiver had the power to negotiate, and ultimately it signed the consent order—without telling the bank’s sole shareholder until it was a done deal.
Even after depositors were repaid in full, the receiver allegedly kept or sold millions in surplus assets, including artwork. When asked to sue the lawyers for malpractice, the receiver refused, calling the idea “not in the bank’s best interest.”
To the shareholder, it looked like a betrayal: the professionals meant to protect the bank’s value had instead given away its defenses and its money.
The shareholder has now taken the fight to court in Miami, suing the three law firms for malpractice. The claim is simple: no reasonable lawyer would have advised admitting to false or exaggerated facts, especially when those same firms had previously defended the opposite.
If the case succeeds, it could ripple far beyond Puerto Rico. It would send a signal to law firms everywhere: if you certify a client’s compliance one year, you can’t quietly switch sides the next without consequences.
Why It Matters
For the public, Bancrédito’s saga is less about one bank’s downfall and more about trust.
At its core, this isn’t just a banking story. It’s a human story about responsibility, loyalty, and the cost when those break down.
