Banco Santander Faces Legal Heat for 8 Million Peso Fraud

In a surprising turn of events, the Mexico City Attorney General's Office (FGJ-CDMX) has taken the unprecedented step of initiating criminal proceedings against Banco Santander, seeking to prosecute the bank as a legal entity for an alleged fraud of 8 million pesos. The alleged fraud is said to have caused significant harm to an account holder, prompting legal action.

Scheduled for July 25, the Superior Court of Justice of the CDMX will hold an initial hearing to charge the bank and two of its external lawyers with the crime of procedural fraud. Judge Fernando Miguel Sarabia Villuendas will preside over the proceedings, as per judicial reports.

The Prosecutor's Office for Civil Court Proceedings of the FGJ-CDMX aims to file an indictment against Banco Santander, represented by attorney Carlos Mauricio Salazar Douglas, as well as external attorneys Luis Rischia Velázquez and Domingo Adrián García Hernández. The case has been assigned the judicial file number 016/1160/2023.

The background of this case can be traced back to October 2020 when a client found herself unable to withdraw funds from her bank accounts. Upon investigating the situation, she discovered that not only had her financial assets been frozen but also two of her properties in Colonia Florida had been seized in connection with two civil lawsuits. These lawsuits were being heard in the Seventh and Twentieth Courts of the common jurisdiction.

Further investigation revealed that Banco Santander had initiated the lawsuits, claiming the collection of an 8 million peso loan meant for Small and Medium Enterprises (Pymes) at a fixed rate. The loan was supposedly granted to the clothing manufacturer Fashion Fabric S.A. de C.V.

However, the woman affected by the lawsuits, who had been a representative of the textile company in the past, stated that she no longer held that position and had never applied for the loan. The FGJ-CDMX confirmed through a graphoscopy report that her signature had been forged on the loan documents.

"I categorically state that I never signed that credit contract and that the signatures on it are false," she asserted in her complaint. "It is clear from this document that they maliciously falsified my signatures on the credit contract and placed me as the legal representative of Fashion Fabric S.A. de C.V. and as a joint and several obligors, but, I reiterate, I never signed that contract nor did I represent myself as the legal representative of said company."

In an attempt to gather more evidence, the Attorney General's Office summoned Fernando Borja Mujica, who had previously served as the Legal Director of Banco Santander Mexico and was currently serving as the Secretary and Deputy General Legal Director. However, he failed to appear at the hearing scheduled for December 5.

The move to press criminal charges against Banco Santander as a legal entity is highly unusual. Before this, the only other bank that faced such charges was HSBC, which was indicted for procedural fraud in January 2019. The Capital District Attorney's Office accused HSBC of forging a signature to avoid payment of more than one million dollars in connection with a real estate litigation.

As the legal proceedings against Banco Santander unfold, it remains to be seen how this case will impact the banking industry and whether it will set a precedent for holding financial institutions accountable for alleged fraudulent activities.