By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian bank yesterday pledged it will not be deterred from pursuing $20m “unlawfully withheld” by a payments provider despite a Florida court rejecting its bid to freeze these assets.

Deltec Bank & Trust, in a statement responding to Tribune Business inquiries, asserted it “will move forward as planned” with its $35m damages claim against Ibanera and Michael Carbonara, the latter’s principal, even though the south Florida federal court last week found it had failed to produce sufficient evidence to justify imposing an injunction and temporary restraining order over the disputed assets.

Ellen D’Angelo, a US magistrate judge, in a July 9, 2025, verdict ruled that Deltec “has not demonstrated a substantial likelihood of success on the merits” of its claim against Ibanera, nor shown that it faces “a substantial threat of irreparable injury” if the $20m said to belong to the bank and its clients is not frozen. As a result, she found it had not met “the burden of persuasion” required for an injunction.

The judge also accepted Ibanera and Carbonara’s evidence that they “have neither stolen nor used the funds for their own purposes”. She appeared to be reassured by the Ibanera chief’s witness testimony that the $20m has been placed “into crypto currency for safekeeping” until the dispute is resolved.

And, in opposing Deltec’s bid for an asset freeze, Ibanera also argued that it had no standing to seek injunctive relief because it had earlier this year closed the sale of its private client banking and fiduciary business to fellow Bahamian institution, Britannia Bank & Trust. As a result, the payments provider challenged whether Deltec has any interest in the $20m - either for its own interest, or that of its clients. 

Deltec, in its statement to Tribune Business, pledged to continue battling Ibanera and its principal in the south Florida court despite the asset freeze reversal. Pointing out that the judge did not determine the merits of its case, the Bahamian bank and trust provider asserted that the payments provider “must account” for why it continues to hold funds it has no right to.

“Deltec placed its trust in Ibanera to act as a correspondent bank and transmit funds according to clear instructions. Instead, Ibanera has withheld over $20m entrusted to it - an amount it refuses to return. These facts are not in dispute,” Deltec told this newspaper.

“Last week’s court ruling found simply that it is too early in the process to determine whether Ibanera is currently withholding Deltec’s funds in violation of the contract. This decision does not address the merits of the case, which will move forward as planned.

“The core issue remains: Ibanera must answer for why it is withholding funds, and why it secretly converted Deltec’s funds into crypto currency, all the while continuing to issue account statements showing the funds as fiat currency. Deltec remains committed to recovering its assets and holding Ibanera accountable.”

Judge D’Angelo, in her asset freeze verdict, said Ibanera and its affiliates had agreed to provide cross-border transfers and multi-currency payment accounts for Deltec and its clients under the terms of a July 18, 2024, processing services agreement (PSA). It created segregated client accounts at banks and other financial institutions to hold the funds, which it promised to hold in trust.

The accounts were established at the Development Bank of Singapore (DBS), but “Ibanera began having issues with the ability to execute payments on behalf of” Deltec as early as October 2024. The Bahamian bank learnt on October 22, 2024, that the provider’s SWIFT payments via DBS were on hold - at a time when it had $31.7m in Ibanera’s accounts.

“On November 19, 2024, plaintiff [Deltec] requested that Ibanera transfer $15m to another one of its accounts. A month later, Ibanera transferred $12m to plaintiff. Notwithstanding its transfer of the partial amount, Ibanera’s issues with money transfers continued in December 2024,” Judge D’Angelo recorded.

“Beginning in January 2025, plaintiff made repeated requests to Ibanera to transfer the remaining funds - the equivalent of approximately $20m - to plaintiff’s account in another financial institution. Although Ibanera acknowledged the receipt of plaintiff’s transfer request, it did not transfer the funds to plaintiff.”

After Deltec Bank & Trust sent a February 3, 2025, letter demanding the $20m be transferred to it, Ibanera replied that it had failed to comply with its obligations under the PSA and the payments provider has sustained “significant losses” as a result. It countered that it was “entitled to keep the funds to offset its losses” caused by Deltec’s allegedly “unauthorised activities”.

However, the Bahamian institution argued that these “activities” were never “identified” to it, and that the claims were merely a “pretext” and smokescreen to justify why Ibanera continued to “improperly hold” its $20.674m through “unsupported excuses”.

Shonel Clarke, Deltec Bank & Trust’s senior operations department manager and a ten-year employee, testified before the south Florida court that Ibanera in late 2024 “refused to execute client-directed transfers, and provided no adequate explanation or justification despite plaintiff’s repeated inquiries”.

“She further testified that plaintiff was unable to obtain information regarding the status of approximately $20m in various currencies,” Judge D’Angelo wrote.”Defendants also questioned Ms Clarke regarding the number of requests for information plaintiff received from Ibanera, and she testified that 40 to 45 requests, in comparison to approximately 1,500 transactions, was common and minimal.

“On re-direct, Ms Clarke explained that following the sale to Britannia Bank & Trust, some of plaintiff’s clients agreed to transfer their accounts to Britannia and those clients were fully funded with cash holdings.”

Mr Carbonara, testifying on Ibanera’s behalf, said the payments provider “identified irregularities involving plaintiff’s transactions” once it underwent a series of internal and external audits following the closure of its DBS accounts and loss of its Singapore licence. Ibanera terminated the PSA with Deltec on May 2, 2025.

“Mr Carbonara testified that Ibanera retained all the funds associated with plaintiff,” Judge D’Angelo wrote. “He clarified that Ibanera has not used any of plaintiff’s funds to offset any potential liability plaintiff may owe.

“Regarding the impact of the instant litigation, Mr Carbonara testified that Ibanera has lost clients, banking relationships and other business opportunities. Mr Carbonara further explained that Ibanera has suffered significant reputational and financial harm.

“During his cross-examination, Mr Carbonara testified that after Ibanera terminated the PSA, it transferred plaintiff’s funds into a US dollar stablecoin. He stated that the coins are held in a wallet owned by Ibanera LLC. Mr. Carbonara explained that Ibanera LLC transferred the funds into stablecoin to ‘safely safeguard the funds’, while Ibanera LLC investigated plaintiff’s alleged breach of the PSA.”

Summing up the two sides’ arguments, Judge D’Angelo said Deltec feared “it will suffer immediate and irreparable injury if a temporary restraining order is not issued because Ibanera may dissipate the specific funds it is holding” and has failed to both release the $20m or disclose where the funds are located.

However, Ibanera countered that Deltec “is not entitled to injunctive relief because plaintiff sold its banking interest to Britannia such that it is presently unclear how plaintiff claims an interest in either ‘client funds or . . . its own banking-related funds that are at issue in this litigation’.”

Finding for Ibanera, and rejecting Deltec’s asset freeze bid, the judge ruled that the latter has yet to show it has a strong chance of winning its claim on the merits. “Plaintiff has not provided sufficient evidence on the instant record to demonstrate conclusively that defendants’ withholding of funds was not authorised by the PSA,” Judge D’Angelo wrote.

“The evidence presented at the evidentiary hearing does not allow the court to determine at this stage whether there was a clear breach of the PSA, whether there were multiple breaches of the PSA, and at what point either party breached the PSA.

“Therefore, the court cannot determine at this juncture whether defendants are currently withholding plaintiff’s funds in violation of the PSA. Thus, plaintiff cannot establish a substantial likelihood of success on the merits.”

And, as to Deltec’s fears that Ibanera would “dissipate” its $20m unless an injunction was imposed, Judge D’Angelo ruled: “The evidence showed that defendants have neither stolen nor used the funds for their own purposes. In fact, at the evidentiary hearing, defendant Carbonara testified that Ibanera is holding the funds at issue and has not misappropriated them.

“No evidence has been presented that defendants have dissipated plaintiff’s funds. In fact, plaintiff has not conclusively established that the funds were improperly moved. Once Ibanera’s account with DBS was closed, the funds had to go somewhere and Ibanera was obligated to do something. As defendant Carbonara explained at the hearing, the money was placed in crypto currency for safekeeping....

“At the evidentiary hearing, Plaintiff failed to provide any evidence demonstrating that defendants have dissipated its funds. In fact, defendant Carbonara expressly testified that Ibanera has retained the funds and has not used any of the funds to offset damages. At most, future dissipation of funds is speculative. Prospective harm, on its own, does not meet the test of imminence.”

Judge D’Angelo, finding that Deltec “has not established a substantial threat of irreparable injury”, also ruled that imposing an asset freeze would harm Ibanera more than the Bahamian bank and trust company given the latter’s ability to still claim damages if the PSA agreement was violated.

“Because plaintiff has not demonstrated all of the requirements for injunctive relief, the court has no authority to order an asset freeze, accounting, repatriation of the assets and expedited discovery as plaintiff requests,” the judge concluded.