The former president of a failed Miami bank was sentenced to a year in prison for diverting bank funds to a firm that assisted the Nicaraguan Contras in the late '80s.
Louis F. Petrillo, who pleaded guilty last September to misapplication of funds and bank fraud, issued letters of credit for more than $2 million without his bank's knowledge to a Washington, D.C.-based firm called Geomilitech Consultants Corp. in 1986 and 1987.
Geomilitech reportedly arranged numerous arms purchases for the Contras.
The firm was headed by Barbara Studley, an acquaintance of Mr. Petrillo's from her days as a conservative radio talk show host in Miami in the 1970s, and was in the business of advising foreign clients on purchasing military equipment, the U.S. Attorney's office in Miami said.
Mr. Petrillo committed the crimes while working first at Florida National Bank and then at Bayshore Bank of Florida, where he was president. State regulators shut down Bayshore shortly after Mr. Petrillo stepped down in 1987.
In addition to the one-year prison sentence, Mr. Petrillo will receive five years of probation and pay $2 million in restitution.
While Mr. Petrillo's case is over, some of the former shareholders of Bayshore believe that not all of the details have come to light.
"I have no problem losing money, that's the nature of doing business in this country," said Gerald J. Tobin, a Miami lawyer who said he lost $100,000 when the bank failed. "But I object to someone stealing my money, and that's what happened here."
Mr. Petrillo asserted in court that his actions relating to Geomilitech were done in conjunction with the Central Intelligence Agency. Mr. Tobin said that if these claims are true, the U.S. government should compensate the 235 holders of Bayshore stock.
Mr. Tobin intends to take Mr. Petrillo's court statements to state and federal justice officials and request an independent counsel investigation of the case, he said.
"All that stuff was discounted in court," said Willie Fernandez, a spokesman for the U.S. Attorney's office in Miami. "But he (Mr. Tobin) is free to pursue any avenue he wants to."
In addition to the illegal letters of credit to Geomilitech, Mr. Petrillo diverted $53,000 for his personal use while at the two banks.