Victory for Ecuador as US Court Rejects Fugitive Bankers' Case

The state of Ecuador won an important case Monday brought against it by the Isaias brothers, a pair of fugitive bankers who were convicted of embezzlement for their role as the heads of bank Filanbanco during the Ecuadorean banking crisis in the late 1990s.

Ecuador’s attorney general revealed in a communique that the court of the Southern District of New York has denied a suit by William and Roberto Isaias, which sought to sue Ecuador for US$1 billion, after the state seized approximately 200 business connected to the brothers when the pair fled the country.

The U.S. court determined that the suit did not fall under its jurisdiction, as the state of Ecuador enjoys sovereign immunity. According to the communique, the court also found that the brothers had failed to prove that the seizures were illegitimate.

The brothers have the option to appeal within 30 days.

Ecuador is still seeking the extradition of William and Roberto Isaias. However, the pair have received preferential treatment, due to their connections to U.S. Senator Robert Menendez, himself the subject of a corruption investigation.

The brothers were found guilty in absentia and sentenced to eight years in prison by the Ecuadorean National Court, which determined that the brothers had falsified Filanbanco’s financial statements. Filanbanco received millions from the Ecuadorean state in bail-outs during the country’s bank crisis.

This is the second case the Isaias brothers have lost in U.S. courts, after a 2014 ruling determined that Ecuador could attempt to seize properties belonging to the brother in Florida in order to recover a portion of the US$200 million the government of Ecuador says it is still owed.