U.S. indicts ex-Venezuelan officials
International money laundering allegedly involved bribes to gain energy contracts
Federal charges were unsealed Monday against five former Venezuelan government officials for their alleged role in an international money laundering effort involving bribes to obtain energy contracts from Venezuela’s stateowned and state-controlled energy company, Petroleos de Venezuela SA.
It is part of a larger ongoing investigation by the U.S. government into bribery at PDVSA that has, to date, brought charges against 15 individuals, including 10 who have pleaded guilty.
The five indicted Monday — former officials of PDVSA and the Venezuelan government — were known as the “management team” and wielded considerable influence within the Venezuelan energy company, according to the indictment.
The team members conspired with one another and others to solicit PDVSA vendors for bribes and kickbacks, the U.S. government charged. Then they laundered the proceeds through a series of complex international financial transactions, using U.S. bank accounts, real estate deals and other U.S. investments, according to the Justice Department, which announced the indictment.
The indictments are the latest charges coming out of Houston against companies and their employees over allegations of paying bribes, arranging kickbacks and generally greasing the skids to win business in parts of the world where corruption is common. Over the past decade, Houston federal court has become one of the busiest in the nation for cases
involving foreign bribery cases in large part because of the concentration of energy companies that do business around the world.
Houston accounted for seven, or about one-fourth of the 26 cases brought by the Justice Department in 2016 under the Foreign Corrupt Practices Act.
International cooperation has spurred more investigations and led to even more indictments. Over the past few years, law enforcement agencies around the world have teamed up to pursue charges of international bribery. In the latest case, federal agents in Houston credited their law enforcement counterparts in Switzerland and Spain.
That type of international cooperation has contributed to a series of high-profile corruption cases that have ensnared some of the region’s most prominent energy companies and operators. Late last year, for example, Houston-based subsidiaries of oil equipment giants Keppel Offshore & Marine and SBM Offshore pleaded guilty to bribery charges involving foreign officials on three continents and agreed to pay the U.S. Department of Justice a combined $660 million.
In Venezuela, the government has launched its own corruption investigation involving PDVSA and its U.S. subsidiary, Citgo, which is headquartered in Houston. It’s unclear, however, if those investigations and subsequent arrests are aimed primarily at tightening Venezuelan President Nicolas Maduro’s hold on power.
Venezuela, racked by an economic and political crisis that has left citizens without basic supplies, has attempted to oust much of its energy establishment in recent months. The country’s chief prosecutor late last month ordered the arrest of Rafael Ramirez, PDVSA’s former head, on suspicion of money laundering and embezzlement.
In November, the acting president and five other Citgo executives were detained in Venezuela on allegations involving the possible embezzlement. Asdrubal Chavez, a cousin of the late Venezuelan president Hugo Chavez, was later installed as Citgo’s chief executive officer.
Four of the defendants named in the indictment unsealed Monday were arrested in Spain in October by Spanish authorities. Those defendants were Luis Carlos De Leon Perez, Nervis Gerardo Villalobos Cardenas, Cesar David Rincon Godoy and Rafael Ernesto Reiter Munoz. The 20-count indictment was returned in Houston in August.
Cesar Rincon was extradited from Spain on Friday and made his initial appearance Monday before U.S. Magistrate Judge Stephen Smith in Houston. De Leon, Villalobos and Reiter remain in Spanish custody pending extradition.
A fifth defendant — Alejandro Isturiz Chiesa — remains at large. All five are Venezuela citizens. De Leon is also a U.S. citizen.
The U.S. government alleges that two PDVSA vendors — Roberto Enrique Rincon Fernandez of The Woodlands, and Abraham Jose Shiera Bastidas of Coral Gables, Fla. — sent more than $27 million in bribe payments to an account in Switzerland for which De Leon was an owner. The money was later transferred to other Swiss accounts.
Roberto Rincon and Shiera previously pleaded guilty to violating the federal Foreign Corrupt Practices Act in connection with a scheme to bribe PDVSA officials. Rincon and Shiera are awaiting sentencing.
Last year, Charles Quintard Beech III of Katy, an owner of several Texas energy companies, and Juan Jose Hernandez Comerma, a part owner of a Florida energy firm, each pleaded guilty to foreign bribery charges for their roles in obtaining contracts from PDVSA.
Sentencing is scheduled for both in August, according to court records.