Dear Commissioner Rodríguez Villa,

I write again to further address Receiver Wigberto Lugo’s inaccurate assertion that he bears no responsibility for recovering the assets of Euro Pacific International Bank (“the Bank”) that were transferred to Qenta under the aborted Purchase and Assumption Agreement dated September 30, 2022. That claim is contradicted by the governing documents, the Liquidation Plan approved by OCIF, and by rulings already issued by the courts.

The Purchase and Assumption Agreement clearly identifies Euro Pacific International Bank, Inc. as the “Seller.” Peter Schiff (“Schiff”) signed the Agreement twice: once as Chairman of the Bank, on behalf of the Seller, and a second time in his personal capacity, because he undertook specific obligations under the Agreement. While Schiff was a party to the Agreement personally, he was never the Seller. That role always belonged to the Bank. Qenta’s $500,000 down payment was made to the Bank, not to Schiff. Once the Bank entered receivership, the Receiver assumed full authority and responsibility for all Bank assets, including those subject to the Agreement. It is therefore inaccurate to suggest that the assets were “sold by Peter Schiff” personally or that responsibility for their recovery rests with him.

The Agreement also made clear that legal ownership of the transferred assets was contingent upon regulatory approval, full assumption of customer liabilities, and a lawful Closing. Because Qenta failed to onboard customers, never obtained necessary approvals, and ultimately terminated the Agreement, the transaction never closed. Under Article 6, termination required unwinding the deal, which necessarily means the assets revert to the Bank’s estate. The Receiver has both the authority and the duty to pursue their recovery.

The Liquidation Plan approved by OCIF on September 6, 2022, under Commissioner Zequeira Díaz, vests the Receiver with control over all Bank assets. It does not exempt him from responsibility for assets withheld by Qenta. To the contrary, it imposes on him the fiduciary duty to marshal and recover those assets for the benefit of depositors.

The courts have confirmed this responsibility. On August 1, 2025, the New York Supreme Court (Justice Jamieson) issued a temporary restraining order freezing approximately $70 million in Bank assets held by Qenta. That ruling was based on a detailed evidentiary record demonstrating both a strong probability that the Bank would prevail in arbitration and an immediate risk that Qenta would dissipate the assets. When the case was removed to federal court, Judge Castel of the Southern District of New York upheld the TRO, rejecting Qenta’s arguments to dissolve it. The TRO was later vacated only on the ground that Schiff lacked standing—because only the Receiver could bring such an action on behalf of the Bank.

Because the Receiver has maintained that Schiff was responsible for recovering the assets, Schiff attempted to do so. The courts stopped him, ruling that recovery is the Receiver’s exclusive responsibility. Yet the Receiver continues to decline to act, insisting it is not his duty. This creates a legal vacuum: the courts will not allow Schiff to act because the Receiver represents the Bank, but the Receiver refuses to act either. Qenta is exploiting this contradiction to wrongfully retain the assets, to the detriment of depositors the Receiver was appointed to protect.

This issue is compounded by the Receiver’s communications with customers. In his most recent letter, dated August 26, 2025 (but not emailed until September 5, 2025), he stated that he is still “carefully evaluating the appropriate course of action” with his legal team and “reviewing the remedies that may be taken.” But there is nothing left to “evaluate” or “review.” The courts have already made clear that it is his responsibility to recover the assets, and the facts leave only one lawful course of action. Delay increases both the risk to customer assets and the difficulty of securing equitable relief.

In the same letter, the Receiver accused Schiff of providing “false information” to customers when Schiff explained that the duty to recover the assets rests with the Receiver. In reality, Schiff quickly reviewed the options and acted promptly when Qenta terminated the deal and the Receiver did not. He obtained a TRO freezing the assets, which was vacated solely because the court ruled the Receiver alone has standing. The Receiver’s ongoing claim that he is still “evaluating” is simply a justification for inaction.

The Receiver’s treatment of subsidiaries also highlights the issue. In his letter, he admitted that Euro Pacific Securities, Euro Pacific Funds, and Euro Pacific Advisors “were wholly owned subsidiaries of Euro Pacific International Bank.” If wholly owned, their assets were part of the Bank’s estate. Yet he now claims these subsidiaries—and the mutual funds they held at Interactive Brokers on behalf of customers—“never belonged to the Bank” and are outside the liquidation. This position is indefensible. For example, the $19 million in cash held at Interactive Brokers came directly from customer deposits at Euro Pacific Bank, which the Bank placed in an account through its subsidiary Euro Pacific Securities. Under the terminated PAA, Qenta was never given the cash directly but was to acquire Euro Pacific Securities, which held the account. Because the PAA never closed, Qenta never acquired Euro Pacific Securities or the IB account. To now claim that these funds were never part of the Bank’s estate is unsustainable.

The Receiver has also represented to customers that the Bank’s silver account at Silver Bullion “remains frozen” by the custodian. This is inaccurate. Silver Bullion Pte Ltd in Singapore has confirmed directly to Schiff that they are prepared to release all silver to customers immediately, requiring only written authorization from the Receiver. He previously sent Qenta written instructions regarding customer gold, so there is no barrier to sending similar instructions regarding customer silver. The account is not frozen by the custodian—it remains frozen only because the Receiver has not authorized its release.

This contradiction further underscores the problem. The Receiver claims that gold held by Qenta is “the personal property of customers” and therefore not his responsibility to recover. Yet with silver, which he also characterizes as customer property, he refuses to authorize its release. This inconsistency has the effect of ensuring that customers recover nothing.

Silver owners have now waited more than three years. A single email from the Receiver would allow Silver Bullion to release their property immediately. Schiff has a complete customer list with contact details and amounts owed, and Silver Bullion is willing to coordinate distribution directly to customers—but only if the Receiver authorizes it. Customers holding both silver and gold should at least be allowed to recover their silver now, particularly given that its value has more than doubled during the receivership. And since the Receiver has taken the position that precious metals were never part of the Bank’s estate, there is no basis for continuing to block their release.

Every day of inaction jeopardizes recovery further. Delay increases the likelihood that Qenta will dissipate or conceal assets, making them permanently unreachable. Delay also undermines the ability to obtain equitable relief in the future: Qenta may argue that no “emergency” exists if the Receiver waits too long. Inaction both enables Qenta’s retention of assets and erodes the Bank’s ability to protect depositors.

Schiff has also made clear his willingness to assume the responsibility of recovering the assets at his own expense, provided the Receiver delegates authority. The Receiver has declined. This creates another contradiction: the courts have ruled the Receiver alone has this duty, but he refuses to act himself or delegate authority to Schiff. As a result, no one can act against Qenta, leaving depositors unprotected while the Receiver continues to draw compensation at the Bank’s expense. If the Receiver will not delegate to Schiff or act himself, he should at least assign the Bank’s claims against Qenta to a Litigation Recovery Trust, which Schiff is willing to fund and administer.

OCIF has an important role to play in ensuring the Receiver performs his duties. The Bank was placed into receivership to protect customers. Yet the Receiver appointed for that purpose is not protecting them and is preventing others from doing so. That failure undermines the very rationale for the receivership. If the Receiver will not fulfill his responsibilities, OCIF must intervene. Otherwise, the receivership serves no purpose other than to place customer assets at greater risk.

The liquidation plan approved by OCIF required the Bank to be wound down within 90 days, with all customer accounts settled and any remainder distributed to Schiff as sole shareholder. That short timeframe reflected the Bank’s unusual position: it had no loans or debts and held sufficient cash and precious metals to cover all obligations in full on the day it was placed into receivership. Liquidating Euro Pacific should have been easier than almost any other case. Yet more than three years later, the Bank is no closer to resolution. Not one cent has been returned to customers. The only party, other than Qenta, to have received anything during this period is the Receiver himself. This outcome is indefensible and entirely contrary to the purpose of the receivership.

The failure to resolve these issues also damages Puerto Rico’s financial reputation. The credibility of Puerto Rico’s offshore banking sector depends on trust in regulatory oversight. If OCIF allows a Receiver to neglect fiduciary duties and take no action in the face of judicial rulings and customer harm, depositors and investors will lose confidence in Puerto Rico’s banking system.

The Receiver’s refusal to act is inconsistent with the governing documents and contradicted by court rulings. His misstatements to customers, refusal to delegate authority, and continuing delay compound the harm by leaving customers defenseless while Qenta retains their property. These assets remain part of the Bank’s estate, and it is the Receiver’s responsibility to recover them. I respectfully urge OCIF to ensure that the Receiver fulfills this responsibility promptly, in accordance with the law and in the best interests of depositors.

Respectfully,

Javier F. Micheo