Luis Alfonso de Borbon and His Father-in-Law Embroiled in Financial Scandal

Luis Alfonso de Borbón Martínez Bordiú and his father-in-law Victor Vargas Irausquin have in the past several weeks been caught up in an increasingly damaging scandal relating to the Vargas family's financial dealings. Specifically, the Venezuelan Banco Occidental de Descuento, of which Victor Vargas is the president, has seen its Panamanian branch, the AllBank Corp, have all its operations in Panama shut down by the government of the country. 

 

Victor Vargas

AllBank Corp was closed on 10 September by the Superintendency of Banks of Panama (SBP) to protect and safeguard the interests of customers. According to the Panam Post: "The Panamanian financial authorities explained that the shareholder group did not meet the corrective action requirements demanded by SBP to 'diversify the high degree of exposure of its liquid assets and custody services of its investments in securities in related parties.'"

Further, the Panam Post reports: 

 

Banker Victor Vargas, who has a holiday home in Cadiz, Spain, is a polo player with almost 50 horses. He currently lives in the Dominican Republic, a tax haven that two years ago served as the location for an unsuccessful dialogue between Chavismo and the opposition. 

According to Razon, the Venezuelan banker has a mansion in Palm Beach, United States called “Lechuza Caracas” just like his polo team. When Vargas bought it, he broke the price record in the area where the house is located. 

In an interview for The Wall Street Journal, the banker pointed out: “People write stories about me saying I have a Ferrari, a plane, and a yacht, but it’s not true. I have three planes, two yachts, and six houses. I’ve been rich all my life.” 

Although Vargas’ statement is true, the fact is that his wealth multiplied when Hugo Chavez took power in Venezuela. In an interview, he defined himself as “a socialist in the real sense of the term.” 

According to the Spanish daily ABC, his friendship with the Chavez regime began when he opposed the general strike of workers and businessmen in 2002. Consequently, Chavismo awarded him most of the oil contracts (he controls 90 percent of the contractors in this industry), and he is now one of the wealthiest men in Venezuela.

This development is sure to have significant consequences on the Vargas family fortune, of which Luis Alfonso de Borbón benefits through his marriage to María Margarita Vargas Santaella, one of the two children of Victor Vargas from his first wife.

Sources: 

Chavez’s Favorite Banker, Victor Vargas’ banks closed down

Great grandson of Spanish dictator Franco linked to suspended bank