Inversiones, Seguras y Productivas (INSEPRO) and Financiera de Inversiones, Seguras y Productivas (FINSEPRO) were partner companies operating as savings and loans firms under the management of Roberto Mathies Hill, a prominent ARENA supporter (CAR 24 July 1997, 1-2; ibid. 4 Sept. 1997, 6). INSEPRO and FINSEPRO became the subject of a fraud investigation in 1997 when it was discovered that funds were being illegally diverted from the two companies to off-shore bank accounts or to other firms owned by Mathies Hill and his associates (ibid.; La Nacion 3 July 1998).

The following limited chronology provides information on authorities' investigation of FINSEPRO and INSEPRO, and on street demonstrations that took place in 1997 and 1998 to protest the government's handling of the affair.

On 2 July 1997, police arrested and jailed Roberto Mathies Hill, along with four business associates, charging them with "public economy fraud" in connection with the diversion of more than US$22 million by FINSEPRO (La Nacion 6 July 1997; CAR 24 July 1997, 1-2).

On 15 July 1997, the Salvadoran government created a special parliamentary commission to investigate criminal activities in the financial sector (La Nacion 16 July 1997; CAR 31 July 1997, 6). Three days later, on 18 July 1997, the Legislative Assembly relaxed banking secrecy laws to facilitate the commission's work (ibid.).

In late July 1997, the first in a series of street protests took place in San Salvador, attracting an unknown number of depositors who banged "pots and pans in front outside the offices of the bank oversight agency and the homes of members of the Mathies and Hill clans" (NYT 2 Aug. 1997).

By 4 August 1997, it was estimated that at least US$160 million had gone missing from both INSEPRO and FINSEPRO, which "brought thousands to the brink of bankruptcy, many of them retired or widowed" (La Nacion 4 Aug. 1997). Although the government paid depositors up to US$6,000 (ibid.), a second demonstration was held on 15 August 1997 (ibid. 16 Aug. 1997). The "hundreds of holders of savings accounts" who were defrauded called upon the government to reimburse them fully for their losses (ibid.).

On 3 September 1997 defrauded account holders rallied in front of the Agricola Comercial and BANCASA banks, which they claimed were involved in the fraud perpetrated by INSEPRO and FINSEPRO (ibid. 4 Sept. 1997).

In early September 1997, deputies of the Legislative Assembly were given an opportunity to question Roberto Orellana, president of the Central Reserve Bank (CAR 4 Sept. 1997, 6; La Nacion 3 July 1998). The investigation into fraudulent activities at INSEPRO and FINSEPRO had exposed what Central America Report describes as "an oligopolic hold on the banking system, as well as questionable internal practices within the Central Reserve Bank" (ibid.).

On 7 January 1998, a group of INSEPRO and FINSEPRO depositors demonstrated outside of San Salvador's Judicial Centre, claiming that Nicolás Menjívar, a judge presiding over the fraud investigation had been bribed to release, on 23 December 1997, five individuals who had been under suspicion of involvement in the fraud (La Nacion 9 January 1998). Four of the individuals released were acquitted of charges in the case, as were another dozen unnamed individuals also suspected of involvement. However, the judge ruled that Roberto Mathies Hill and two associates should remain in prison while awaiting trial (ibid.).

Another demonstration took place on 2 July 1998, as approximately 300 fraud victims marked the anniversary of the arrest of senior INSEPRO and FINSEPRO personnel with calls for the government to repay depositors in full for the savings they had lost in the affair (La Nacion 3 July 1998). As in previous reports describing demonstrations by INSEPRO and FINSEPRO depositors (ibid. 9 Jan. 1998; ibid. 4 Sept. 1997; ibid. 16 Aug. 1997; NYT 2 Aug. 1997), there was no indication that protestors were affiliated with a particular movement or party, or that political parties were involved in the demonstrations. In its account of the protest which took place in late July 1997, the New York Times stated that, in "contrast to the peasants and students who took part in protests during the war years, these demonstrators are primarily well-to-do" (2 Aug. 1997).

On 26 June 1999, it was reported in El Diario de Hoy that the investigation into the diversion of funds from INSEPRO and FINSEPRO had been completed, and that an appeal court had confirmed that Roberto Mathies Hill, together with four business associates, would have to stand trial on charges of fraud. No indication of a court date being set having been set could be found among the sources consulted by the Research Directorate.

This Response was prepared after researching publicly accessible information currently available to the Research Directorate within time constraints. This Response is not, and does not purport to be, conclusive as to the merit of any particular claim to refugee status or asylum. Please find below the list of additional sources consulted in researching this Information Request.

Central America Report (CAR) [Guatemala]. 4 September 1997. Vol. 24, No. 34. "Bank President Under Scrutiny."

_____. 31 July 1997. Vol. 24, No. 29. "Fraud Provokes Financial Reforms."

_____. 24 July 1997. Vol. 24, No. 28. "Double Dealing in Savers Security."

El Diario de Hoy (San Salvador(. 26 June 1999. "Confirman llamado a juicio en caso FINSEPRO." http://www.elsavador.com/ [Accessed 21 Sept. 1999]

La Nación (San José(. 3 July 1998. C. Hasbun and G. Chaves. "Victims Demand Payment." http://www.nacion.co.cr/ [Accessed 18 Sept. 1999]

_____. 9 January 1998. G. Chaves. "Victims of Fraud Claim that Judge was Bribed." http://www.nacion.co.cr/ [Accessed 18 Sept. 1999]

_____. 4 September 1997. "Fraud Victims Demand Payment of Savings." http://www.nacion.co.cr/ [Accessed 18 Sept. 1999]

_____. 16 August 1997. "Victims of $160-Million Fraud Demand Payment."http://www.nacion.co.cr/ [Accessed 18 Sept. 1999]

_____. 4 August 1997. E. Beltran and G. Chaves. "Multi-Million Frauds Bare Lack of Financial Control." http://www.nacion.co.cr/ [Accessed 18 Sept. 1999]

_____. 16 July 1997. "Commission will Investigate Fraud." http://www.nacion.co.cr/ [Accessed 18 Sept. 1999]

_____. 6 July 1997. "President Claims Impunity Deleted." http://www.nacion.co.cr/ [Accessed 18 Sept. 1999]

New York Times (NYT). 2 August 1997. Larry Rohter. "Salvadoran Fraud Case Mires Ruling Party." (Central America NewsPak [Austin]. Vol. 12, No. 13, 21 July-3 Aug. 1997)

Banco Central de Reserva Website.

Boletin PIECA [Austin, Tex.]. 1997-Sept. 1999.

Central America NewsPak [Austin, Tex.]. 1997-Sept. 1999.

Central America Report [Guatemala City]. 1997-Sept. 1999.

El Diario de Hoy (San Salvador(. 1997-Sept. 1999.

La Nacion [San José]. 1997-Sept. 1999.

Revista ECA (San Salvador(. 1997-Sept. 1999.

La Tribuna (Managua(. 1997-Sept. 1999.

Electronic sources: IRB Databases, LEXIS/NEXIS, Internet.