Yet another forex fraud scandal loses US expats some $40 million in total

Even although warnings about financial fraud are regularly posted on web pages aimed at expatriates, massive financial scams in expat locations continue seemingly unchecked.

A Bloomberg report of massive losses by USA expat retirees living in San Miguel is just the latest horror story for those planning retirement in warmer, less expensive overseas hubs. The foreign exchange company involved is Mexico’s Monex, one of the largest international foreign exchange firms offering forex, payment and forex-related financial services to individuals as well as companies.

The scandal broke in late December, going public just this week with a Newsweek report that US pensioners in Mexico had been robbed of their life savings by their own, trusted banker. Monex, with its stalwart reputation and international presence, was trusted by the San Miguel US retirement community, as was the company’s representative, banker Marcel Zavala Taylor.

Last December, US expat Kathy Machir called Zavala and requested a cash payment for bills due to builders of her retirement home. Typically, Zavala either wired the amount required or sent her assistant on his motorbike with an envelope stuffed with pesos. In this informal manner, Monex was hotwired into the city’s 10,000-strong expat community.

When the assistant didn’t show up, Zaval didn’t answer her phone or return calls, Kathy checked and found her substantial deposit at the bank had disappeared. Panic in the community revealed she wasn’t the only one, and a meeting was set up with Monex officials, who disclosed some $40 million was missing from 158 accounts mostly belonging to US citizens. Apparently, bank statements sent by Zavala to clients had been falsified, but those affected are stating Monex attempted to settle for far less than their losses and no further information has been received.

The scandal has crushed the expat community in San Miguel, as non-Mexicans have few rights or legal protection, even for an obvious fraud on this scale committed by an employee of the bank. According to Monex, an investigation into Zavala in under way and legal action is continuing, but no details are forthcoming.

Bruce Brown, an Australian expat who’d lost $250,000, was refunded in full by the bank after he filed a complaint with the Mexican authorities. After he’d received the payment, a representative from Monex called him, saying the bank had overpaid and requesting a return of $50,000. In true Aussie fashion, Brown refused the request, telling him to ‘shove it’.