Federal Reserve bans ex-Banco Popular official over embezzlement
Nicolás Pérez-Alvarado pleaded guilty to misappropriating nearly $20,000 while serving as deputy operations manager in Puerto Rico.
The Federal Reserve has issued a permanent prohibition order against Nicolás Pérez-Alvarado, a former deputy operations manager at Banco Popular of Puerto Rico, after he pleaded guilty to embezzling nearly $20,000 from the bank while employed there.
According to the March 27 order, Pérez-Alvarado admitted in Puerto Rico court to 10 counts of aggravated illegal appropriation and embezzlement, stemming from a series of transactions between 2021 and 2022 in which he misappropriated $19,800. He was sentenced to five years of probation in September 2024 and has since repaid the full amount to the bank.
The Fed, citing “personal dishonesty” and a “willful and continuing disregard for the safety and soundness of the Bank,” determined that Pérez-Alvarado’s actions amounted to unsafe or unsound banking practices, violations of law, and breaches of fiduciary duty. The central bank’s order, issued with his consent, permanently bars him from working in the U.S. banking industry without prior written approval.
Specifically, the prohibition prevents Pérez-Alvarado from serving in any capacity — including as employee, director or consultant — at insured depository institutions, their holding companies or affiliated subsidiaries. He is also barred from exercising voting rights or soliciting proxies in such institutions.
The action stems from the authority granted to federal regulators under Section 8(e) of the Federal Deposit Insurance Act, which empowers the Federal Reserve and other agencies to remove or prohibit individuals from the banking industry when their conduct compromises the integrity of the financial system.
By signing the order, Pérez-Alvarado waived his right to a hearing or to contest the allegations, effectively settling the matter without further litigation. He also agreed not to seek judicial review of the order or challenge its validity or enforceability.
The Board of Governors noted that it would not pursue additional enforcement actions on the basis of currently known facts related to the case, although it reserves the right to monitor compliance and take action for any future violations. Any breach of the prohibition order could subject Pérez-Alvarado to further civil or criminal penalties.
Pérez-Alvarado’s case adds to a growing list of enforcement actions taken by federal banking regulators in recent years, as part of a broader effort to ensure accountability and transparency in financial institutions. Although the amount misappropriated was relatively modest compared to high-profile fraud cases, the Federal Reserve’s action underscores its zero-tolerance stance on breaches of fiduciary trust and misuse of customer or institutional funds.
Banco Popular, the island’s largest bank, was not accused of wrongdoing in the case and was fully reimbursed. The institution continues to operate under the regulatory oversight of both the Federal Reserve and Puerto Rico’s financial authorities.
The prohibition order is effective immediately and will remain in place unless modified or lifted by the Federal Reserve Board in writing.
