Pubdate: Fri, 13 Nov 1998
Source: San Jose Mercury News (CA)
Contact:  http://www.sjmercury.com/
Copyright: 1998 Mercury Center
Author: Molly Moore and John Ward Anderson Washington Post

FUGITIVE MEXICAN BANKER HELD AFTER INTERNATIONAL PURSUIT

Mexican banker held in Australia

International hunt: Cops nab fugitive tied to fraud, drug charges.

MEXICO CITY -- For four years, a fugitive Mexican banker who was once one
of the country's most prominent businessmen led law enforcement officials
on a round-the-globe chase from a ritzy Key West, Fla., enclave to an
opulent mansion in Madrid, Spain, and -- finally -- to a luxury estate in
Melbourne, Australia.

The hunt came to an end Tuesday when international law enforcement
officials nabbed Carlos Cabal Peniche, 45, who has been accused of building
his empire with $700 million in fraudulent loans that he allegedly used to
finance a Mexican presidential campaign and an attempted takeover of one of
the biggest canned-fruit companies in the United States, among other things.

In the end, it was his actual birth date on a fake Dominican Republic
passport under a fictitious name that helped Interpol discover that a
would-be Italian wine and cheese merchant in Australia was actually the
same man wanted on multiple fraud charges in Mexico.

Cabal's attorney, Julio Esponda, told a Mexican radio station Wednesday
that his client is innocent of all charges and said he was already working
to permit him to be released on bail when he is extradited to Mexico within
the next several weeks.

Tuesday's arrest ended an extraordinary worldwide hunt. During the past
four years, Cabal moved his four children and his wife -- along with maids,
nannies and bodyguards -- to a series of posh hideouts in half a dozen
locales favored by the world's rich and famous, according to police
officials and news accounts.

Since fleeing Mexico in September 1994 as his financial empire began
collapsing amid political and drug-tainted scandals, Cabal and his
entourage moved from Key West to the Cote d'Azur in France to a Spanish
mansion for which he paid $100,000 for a year's advance rent.

During the early 1990s, when former President Carlos Salinas de Gortari of
Mexico was forging a new Mexican capitalism with economic reforms and
privatization of state-owned monopolies, Cabal emerged as one of the era's
most phenomenal success stories.

He built a small fruit-exporting company into a $1 billion empire. He
became chairman of one of the country's biggest banking groups and was
allowed to buy two of Mexico's previously state-run banks. He also bought
Del Monte Fresh Produce, a branch of the American food empire, for $525
million. At one point, he attempted unsuccessfully to re-merge that
business with San Francisco-based Del Monte Foods in a deal that would have
been valued at $1 billion.

Cabal forged close ties with Mexico's ruling Institutional Revolutionary
Party, the PRI. Opposition parties allege that since becoming a fugitive,
Cabal donated $30 million of his bank's money to the 1994 campaign of
President Ernesto Zedillo Ponce de Leon. He is accused of giving an
additional $5 million to the winning state governor's campaign in the
southern state of Tabasco.

In 1994, Cabal's meteoric rise through the business and political worlds of
Mexico came crashing down when banking regulators seized his two banks and
accused him of misappropriating $700 million.

Since then, Mexican law enforcement officials and newspapers have linked
Cabal to scandals involving former President Salinas' brother, Raul, who
has been the target of investigations by Mexico, Switzerland, France and
the United States. Officials of all four countries are investigating
whether the ex-president's brother may have obtained tens of millions of
dollars in return for allowing Mexican drug cartels to use the country as a
transit zone between South America and the United States.

Investigators have sought Cabal for questioning in connection with the
Salinas cases since another witness testified that Cabal laundered $200
million in cash through his bank from alleged drug traffickers for payment
to Raul Salinas.

Cabal's alleged misuse of bank funds has enraged Mexicans who have watched
their banking system nearly collapse at the hands of corrupt managers and
politicians, forcing the government to propose a $55 billion bailout plan
to save remaining banks. Cabal's extravagant life as a fugitive was made
possible in part by U.S. lawyers who wired him hundreds of thousands of
dollars from an account in the private banking division of J.P. Morgan and
Co., according to published reports in the United States and Mexico.

In just three months in Madrid, Cabal, his family and staff spent $750,000
on a rental mansion they furnished with exquisite taste, stocking it with
Limoges china and Hermes ashtrays, as well as expensive cars and private
schools for the children, reports said.

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