Venezuela’s business elite face scrutiny in $1.2 billion money laundering case
04 Nov 2019

As Venezuela’s oil-based economy continues to crumble, a politically connected class of businessmen with financial ties to Miami has grown fabulously wealthy from energy deals with the socialist government. Among the Venezuelan upper crust who have made fortunes during the Bolivarian revolution: Alejandro Betancourt.

Without any experience in the energy industry, Betancourt co-founded a power company called Derwick Associates a decade ago that has reaped billions of dollars in government contracts for a string of new plants in Venezuela — drawing barbs about being overpaid for the projects and having cozy relationships with top politicians.

With his windfall, Betancourt not only expanded his business into the United States but also bought a penthouse apartment in Manhattan’s Olympic Tower, along with a castle estate and other luxury properties in Spain, according to court documents.

In Miami, Betancourt has surfaced in a massive money laundering case that charges his cousin and several of the so-called Boliburgueses — young , well-educated entrepreneurs close to the Venezuelan regime with conspiring to bribe government officials to approve a loan scheme to embezzle $1.2 billion from the country’s national oil company during the presidency of Nicolas Maduro.

Although Betancourt is not identified by name in the federal case filed in Miami, several sources familiar with the widening investigation say that he is “Conspirator 2” among the dozen unnamed Venezuelan conspirators and officials listed in a criminal complaint that details the alleged international racket.

Betancourt, 39, and some of the other unidentified conspirators and officials could be added as defendants to an indictment, according to sources familiar with the federal case. So far, nine defendants have been charged in the Miami case, with two pleading guilty and one awaiting trial. The remaining six defendants, including Betancourt’s cousin, Francisco Convit Guruceaga, are considered fugitives by the U.S. Attorney’s Office in Miami.

Betancourt’s attorney, prominent Miami lawyer Jon Sale, issued a statement Friday denying his involvement. “My client denies any wrongdoing,” Sale said.

In Miami, Houston and New York, several corruption cases have been pursued by the Justice Department alleging bribery, embezzlement and money laundering activities in Venezuela and the United States that have taken a devastating toll on Venezuela’s economy. The country has suffered the loss of billions of dollars embezzled from its state-owned oil company, Petroleos de Venezuela S.A, or PDVSA, mainly because of green-palming between government officials and the country’s elite business class, federal authorities say.

Russell Dallen, a lawyer and investment manager, spoke about foreign corruption at the Latin America Summit on Friday in Miami, spotlighting the prosecution of the PDVSA money-laundering case and others. Dallen, head of Caracas Capital in Miami, said Venezuela’s rampant corruption has caused dramatic declines in oil production and income over the past two decades, fueling hyperinflation, widespread poverty and the exodus of more than four million people.

“Instead of reinvesting the money and rebuilding the country, it was all stolen through these currency-exchange and loan schemes,” said Dallen, pointing out that Venezuela was once among the biggest oil producers in the world.

“The Venezuelan people are starving,” he added. “The [minimum wage] is $5 a month, up from $2. That’s all they make — it’s less than Haiti, less than Cuba. That’s why people are voting with their feet and leaving the country.”

In the Miami case, federal court records say that “Conspirator 2” was among the ring of Boliburgueses and government officials who received hundreds of million of dollars in late 2014 from PDVSA as payment for a loan that they made to the state-owned oil company. A criminal affidavit alleges the ring used a shell company to loan $42 million worth of bolivars and then got repaid in euros at the government’s favorable exchange rate. That currency exchange transaction instantly multiplied the loan repayment to the equivalent of $600 million.

Betancourt’s cousin, Convit, who also sits on the board of directors of Derwick’s Oil and Gas Corp., is the lead defendant mentioned with Conspirator 2 in the introduction to the complaint affidavit.

Betancourt’s chief financial officer at Derwick, Orlando Alvarado, is listed as “Conspirator 4” in the Miami case and also as an associate of his cousin, Convit. According to the affidavit, Conspirator 4 discussed a plan in 2016 with one of the ring’s leaders to create “fake” foreign currency exchange contracts to make the embezzlement of the national oil company’s funds look legitimate so the proceeds could be transferred to Convit and several others, including Conspirator 2 and Venezuelan officials accused of accepting bribes.

“Conspirator 4 [Alvarado] suggested a meeting with everyone who has ‘an interest’ to sort things out and fix ‘the papers’ before things get bad when it is too late,” the affidavit says.

The close relationship between Convit, Betancourt and Alvarado raises questions about what Betancourt knew of the alleged loan scheme at Venezuela’s state-owned oil company and the flow of laundered money. The detailed affidavit, however, does not provide evidence of Betancourt’s knowledge of the illicit PDVSA loan scheme. Nor does it provide proof, such as a bank record or wire transfer, showing he was aware of the source of the laundered money he allegedly received.

According to the affidavit filed in July of last year, PDVSA repaid the ring’s loan to a shell company called Rantor Capital, transferring the $600 million to Portmann Capital Management in Malta. The oil company’s loan repayment was eventually turned over to another shell company, Eaton Global Services Limited, set up in Hong Kong, which was controlled by the Venezuelan leaders of the money-laundering conspiracy, federal prosecutors say.

The $600 million windfall was then divided up among the group of wealthy Venezuelan businessmen, the three stepsons of Maduro and PDVSA officials, according to an email obtained by agents with Homeland Security Investigations and sources familiar with the criminal case. The president and his stepsons — Yosser Gavídia Flores, Walter Gavídia Flores and Yoswal Gavídia Flores — are under investigation in the Miami case, sources said.

By Jay Weaver and Antonio Maria Delgado, Miami Herald, 3 November 2019

Read more at Miami Herald

Photo: Kremlin.ru [CC BY 4.0], via Wikimedia Commons

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