Former Banco República of Uruguay (BROU) CEO Fernando Calloia's 20-month jail sentence was upheld Tuesday by Uruguay's Supreme Court, thus extinguishing the chain of appeals available to the defendant.
Calloia was found guilty of “abuse of functions” when granting a US $ 12 million collateral to the firm Cosmo Líneas Aéreas, for the acquisition of the aircraft belonging of the former flag airline PLUNA.
The sentence also includes a fine of UY $ 1,337,000 (US $ 30,560) and the disqualification from holding public offices for two years.
But Calloia will not have to serve any actual prison time because he has been granted probation. Calloia was president of the BROU during the government of José Mujica.
At the time of its liquidation, in 2012, PLUNA accumulated a liability of US $ 300 million, and in an attempt to recover something, the company's seven aircraft were put up for auction.
On October 1, during the auction, Hernán Calvo Gómez, representing Cosmo, wanted to buy the planes. Calvo Gómez was the godfather of the grandchildren of Juan Carlos López Mena, owner of Buquebús, who wanted to take over the planes and acted through this other company.
Tuesday's Supreme Court ruling was endorsed unanimously by all of its five members. The Court of Appeals had indicated that Calloia acted deliberately and consciously to make it viable in a clearly abusive and arbitrary manner the presentation of the company Cosmo, which was later proven to be linked to the owner of Buquebus, Juan Carlos López Ore.
Calloia ordered the then manager of the BROU business division, Raúl García, to grant the endorsement after receiving the call from then Economy Minister Fernando Lorenzo, due to which the bank's technical services skipped each and every one of the most elementary rules of prudence that banking activity must have.
García had testified he had informed Calloia that the conditions for the collateral were not met. ”Calloia tells me that it was a matter of national interest ... that he had the consent of the bank directors necessary for” it. He also said López Mena was the one who told him to issue the documents in the name “of Cosmo Líneas Aéreas” a firm which notoriously served as a front, according to the prosecution.