US lawsuit: Venezuela cheated out of billions by rigged oil bids

CARACAS, Venezuela (AP) — A trust linked to Venezuelan state oil company PDVSA has filed a lawsuit against Glencore, Lukoil and other energy trading firms for their alleged role funneling bribes to corrupt company o cials in exchange for rigged oil purchase and sale contracts.

The civil complaint was unsealed Thursday by a federal judge in Miami and alleges the ongoing scheme cheated the socialist-run company of billions in lost revenue since 2004.

The lawsuit comes as the U.S. expands its own criminal investigation into corruption at PDVSA. At least $11 billion is believed to have gone missing from the company in the past decade, according to a 2016 report by the opposition-led National Assembly, and among those prosecutors believe took bribes is the country’s former oil czar Rafael Ramirez, who was not named in the new lawsuit.

The scheme to fix prices, rig bids and eliminate competition, as well as steal highly-confidential information by cloning the company’s servers, was allegedly started by two former PDVSA traders, Francisco Morillo and Leonardo Baquero. Swissbased Glencore and Russia’s Lukoil are named as among more than 40 defendants including rogue traders at multinational traders, shell companies, mid-level PDVSA o cials and a Florida bank.

In 2004, the two Venezuelan men established in Panama a consulting firm, Helsinge Inc., which also had o ces in Miami, Geneva and the British channel island of Jersey. The company was the conduit by which some of PDVSA’s biggest clients and supplier allegedly obtained insider information on PDVSA’s tenders for the sale of its oil exports as well as the purchase of the light crude with which Venezuela refines its heavy crude.

Among other illicit activities, a “clone server” was allegedly installed at Helsinge’s Miami o ces by a PDVSA IT administrator nicknamed “the Nerd” to give the middleman and their clients real-time access to information on competing bids and future tenders.

In exchange for the sneak peak and other unfair advantages, Helsinge — which was not authorized to transact directly with PDVSA — allegedly charged monthly retainers from the international oil companies of $15,000 to $150,000 plus added compensation of up to $0.22 per barrel of oil product bought or sold. Some of that money was paid out from Panamanian shell companies in the form of bribes to four PDVSA managers, one of whom, Ysmael Serrano, currently heads the company’s commercial and supply department, according to the lawsuit.

An email sent through the website of Helsinge, which does not list a phone number or address for the company, went unanswered.

Glencore and Lukoil did not immediately comment. There is no evidence the companies encouraged the corrupt dealings, except for communications between Helsinge and traders for the oil companies discussing wire transfers and ways to change the terms of future tenders before they are released to the general market.