A Legal Crisis – Expatriates in Panama

If you recall a previous post about Peter Gordon Vs. HSBC, then you may be interested in the new discussion that is filling some of the Yahoo Groups. In a Yahoo post called “Peter Gordon Case Exposed to the world

I am not familiar with International Problem Solvers, but their website contains URLs to both a English PDF and Spanish PDF report entitled “A Legal Crisis – Expatriates in Panama”. The report discusses two cases that are currently before the Panama Supreme Court.

I think that anyone that is living in Panama, moving to Panama, considering moving to Panama, or has been aware of either of these two cases will be interested in reading the reports. There is a lot of visibility to these types of problems because of the Internet. The power of the Internet makes it easier to track the progress and outcome of the problems as well.

I have been interested in the HSBC case because the bank I have used since I moved to Panama is Banistmo and it was acquired by HSBC. The Peter Gordon case has given me reason to reflect on the possibility of using a different banking institution.

22 thoughts on “A Legal Crisis – Expatriates in Panama

  1. Don Ray,
    Thanks for posting this document. Makes for good reading. I haven’t visited the Yahoo Panama group for some time as my tolerance for whining & bickering has been exceeded by an order of magnitude. It will be very interesting to see the outcome of these two legal issues. Do you know the original source for this document?
    The only wealth that I have in Panama is property in the name of a corporation. Most of my paper assets are in two foreign banks (not USA). Whether I move much to Panama will depend in may ways how these issues are resolved. At some point Panama’s legal system will have to become more “legal” and less corrupt.

  2. I am with Banistmo also, and tomorrow I am changing banks. Have been planning to since HSBC bought them out, but now need to get off my duff.

  3. Hi Don,
    After your first post I did a little reading and decided back then to change from Banistmo, which I did. I am interested in following this matter and in its outcome.

  4. Hi Don,
    I also have used Banistmo for the last 2 years with no problemas. But I opened an account with Banco General while I was in Boquete last week just in case I need to change banks while I am in the states. I have had HSBC issued credit cards in the US but have discontinued them because I never did like their attitude towards the customer. They always gave me the impression that I should be grateful that they accepted me as a customer.

  5. Hi Ron. Thanks for taking the time to comment. I think that HSBC has a fair amount of customers it is going to be losing because of its bringing up this law suit in Panama.

  6. No one should be too surprised at either of these legal situations that are currently on the “gringo telegraph”. It’s just business as usual in Panama.

    I’ve lost count of how many gringos have lost their estates to Panamanian spouses, regardless of their wills. This case is only exceptional because of the high dollar value. Other that that, business as usual.

    As to the bank/legal problem, I wish everyone the best of luck trying to find a better bank than Banistmo/HSBC, by far the largest and most secure in Panama. Just changing banks is not going to solve your problems, altho it may give you some brief personal satisfaction.

    As to the expropriation of Peter Gordon’s assets, he was unfortunate enough not to be aware of Panama’s strict (and unfortunate) laws concerning public slander/libel/defamation of character. If he was aware of them, he acted foolishly. David went up against Goliath, and guess who won.

    Power and money run the legal system and the politics in Panama, and if you don’t know the rules for swimming with sharks, you had best get out of the water.

  7. Hi Bud. Thanks for commenting. I also have heard of many gringos losing money, but this case is unique because of the foundation situation.

    If HSBC appears to be the most stable bank in Panama, then I just won’t keep money in Panama banks. Whole I liked Banistmo, I can do without HSBC.

  8. There is no reason to keep much money in Panamanian banks except for day to day expenses (I use Global). I just wire the money from my offshore accounts when I need it. If it is a large purchase (e.g., real estate) then I wire the money directly to my lawyer who puts it in a “revocable letter to purchase” through her bank. The property is in a corporation (avoids the probate issue with my spouse). My Panamanian real estate is at risk (I really don’t think the risk is very high) and my name doesn’t show up anywhere.
    The somewhat unique issue with the Peter Gordon is that he has no current legal association with the foundation that HSBC went after. If this is business as usual, then the value of a foundation is significantly diminished.

  9. Recent article published in TIME Magazine

    Postcard: Panama

    Inside the fight for $50 million
    A bitter dispute over a wealthy American’s will has become a metaphor for this nations big divide.

    These are heady days for tiny Panama. It is undertaking a massive expansion of the Panama Canal, luring billions of dollars in maritime and high-tech investment that could make it the Hong Kong of the Americas. But here’s the other side: in the past few months, scores of toddlers have died of malnutrition in villages around the country. More than half of Panamanian children under 5 are at risk of suffering the same fate. That’s why, say friends of Wilson (Chuck) Lucom, who died last year at 88, the eccentric U.S. millionaire left as much as $50 million in his will for poor children’s charities in Panama. It’s the largest private gift ever made here. The will doesn’t single out which relief organizations will be recipients. But, as the director of a charity that may benefit says, it could have a “tremendous impact on our ability to save these children.”

    That is, if the kids ever see the money. Lucom’s widow Hilda, 83, the frail matriarch of Panama’s prominent Arias family (a clan that has produced two of Panama’s Presidents), with the support of her children is battling to get the will declared invalid. They say the will’s U.S. executor, Florida tax attorney Richard Lehman, concocted the charity donation so he could split the money with other Lucom cronies. Hilda’s Panamanian lawyer, Hector Infante, known for political connections and tough tactics, has pressed criminal charges against Lehman–even accusing him of having euthanized Lucom. (That charge was dismissed.) Lehman has sued Hilda and Infante for defamation, but he no longer travels to Panama, fearing he would be arrested. Still, he says, “I wouldn’t be able to look at myself in the mirror if I gave up this case.” It is now in Panama’s Supreme Court, and a ruling could take months, if not years.

    Lehman insists that the Ariases, members of Panama’s rabiblancos, or white élite, are just being greedy. They deny it, though they won’t say how much of the money they would give to charity if they won. But Lehman says this tropical probate drama tests whether Panama’s notoriously corrupt judicial system can be trusted to uphold the surge of legal contracts coming its way as the canal expands and Americans continue to move to Panama for cheaper living. “It’s important that the poor children get this money and equally important that our legal system stop tarnishing itself,” says a respected Lucom pal who requested anonymity because he’s also an Arias-family friend. Infante calls Lehman’s charges that he’s trying to buy a favorable ruling “slanderous” and accuses Lehman of conflicts of interest, like not initially disclosing a $500,000 debt he owes a Lucom firm.

    A rough-hewn former U.S. diplomat who grew up poor, Lucom inherited his fortune from his first wife, a Palm Beach, Fla., heiress. After he married Hilda in 1982, he bought a 7,000-acre (2,800 hectare) ranch once owned by the Ariases. The sale of that property, now valued at up to $50 million, would fund his charitable trust.

    Legal experts say the family is relying on technicalities to get the will annulled; so far two lower courts have ruled against the Ariases. But the fact that the Supreme Court has agreed to hear the case worries Lehman, especially since a former justice is being investigated for bribery.

    Even if the Ariases win, they risk becoming another symbol of Latin America’s gaping chasm between a hyperwealthy élite and the abject poor. Panama and its reformist President, Martín Torrijos, may have a good business plan for the future, but the nation’s near 40% poverty rate is a legacy of decades of banana-republic rule and dismal social spending. Hilda declined to speak to TIME on the record because the case is still pending, but her granddaughter Madelaine Urrutia, who sits on the board of a children’s charity, insists, “We are a family with a social conscience.” Thousands of Panamanian kids hope so.

  10. I just read an upated report on this Lucom case — here is an copy of the “overview”.

    The following is a Report of a list of legal abuses committed against the Estate of Wilson C. Lucom (R.I.P.), its beneficiaries and in particular, Richard S. Lehman, Esq. as the Executor of that Estate. The abuses against Lehman were committed in order to remove him as the sole Executor of a Panamanian Estate and to nullify the Last will and Testament of Wilson C. Lucom.

    The Report discloses a plan to illegally nullify and defeat the Last Will and Testament of Wilson C. Lucom (“Lucom”), which left the bulk of his $50.0 Million fortune to feed the malnourished and starving poor children of Panama. The defeat of this gift would then result in the $50.0 fortune passing to one of Panama’s most elite and powerful families, the children of Hilda Arias and their attorneys, Hector Infante and Edna Ramos (“the Arias Group”).

    Since Lucom’s Last Will and Testament could not be defeated in the Panamanian courts of law, the only way to steal this precious gift to Panama’s poor children was to get rid of Lehman. Lehman was appointed by the Panamanian Court as the sole Executor of Lucom’s Will. Therefore, he was the only person with the legal authority who had sworn an oath in Panama to protect the poor children of Panama.

    The Report clearly shows not only a gross abuse of Panama’s civil law system which has resulted in the complete inability to administer Lucom’s Estate for 20 months. It will show a systematic use of the criminal legal system to resolve civil cases by the threats, terror and personal and financial ruin of the opponent.

    It will show a legal system where one lawyer with impunity can file more than 13 fraudulent criminal allegations against Lehman in one year accusing him of crimes he never committed; the issuance of two illegal arrest warrants against Lehman in Panama and the issuance of two illegal indictments against Lehman. All of this as a result of the corruption of at least one and possibly two Panamanian Prosecutors.

    The most recent attacks on Lehman and his lawyers resulted from the corruption of several Panamanian police agencies. In January of 2008 Lehman and his main Panamanian counsel, Victor Crosbie, were illegally listed as Red Notice criminals of the highest order by Panamanian Interpol. Then Lehman’s counsel was falsely arrested by Interpol in Columbia and Panama

    here is link to English version of 33 page report:

  11. I have been mulling over banking options in anticipation of moving to Panama under the pensionada program. To reduce risks, I’ve decided we will keep our US bank/credit union accounts but have my dual citizen Panamanian wife open up a bank account there and transfer funds to it on a monthly basis for living expenses and so on…at least that’s what I’m thinking at the moment.

    Don…have there been any expatriot evaluations/rankings done on Panama banks similar to your massage therapist evalution? 🙂

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