US says it sanc­tions Venezue­lans in cur­rency scheme

The Financial Daily - - MARKET SUMMARY -

WASH­ING­TON/CARA­CAS: The United States im­posed sanc­tions on Tues­day that tar­get a Venezue­lan cur­rency ex­change net­work scheme that si­phoned bil­lions of dol­lars to cor­rupt in­sid­ers of the Venezue­lan gov­ern­ment, the U.S. Trea­sury Depart­ment said.

Seven in­di­vid­u­als in­volved in­clude a for­mer Venezue­lan trea­surer, Clau­dia Diaz, and tele­vi­sion mogul Raul An­to­nio Gor­rin, who bribed the Venezue­lan Trea­sury in or­der to con­duct il­le­gal for­eign ex­change op­er­a­tions, ac­cord­ing to the U.S. Trea­sury.

"Venezue­lan regime in­sid­ers have plun­dered bil­lions of dol­lars from Venezuela while the Venezue­lan peo­ple suf­fer. Trea­sury is tar­get­ing this cur­rency ex­change net­work which was an­other il­licit scheme that the Venezue­lan regime had long used to steal from its peo­ple," Sec­re­tary of the Trea­sury Steven Mnuchin said in a state­ment.

The U.S. Trea­sury said the for­mer Venezue­lan of­fi­cials and other in­di­vid­u­als used fa­vor­able for­eign ex­change trans­ac­tions through bro­ker­age firms con­trolled by Gor­rin and among very few that were ap­proved by the South Amer­i­can coun­try's trea­sury. The in­di­vid­u­als con­cealed their prof­its in U.S. and Euro­pean bank ac­counts and in­vest­ments, it said.

Venezuela's In­for­ma­tion Min­istry did not im­me­di­ately re­ply to a re­quest for com­ment.

The sanc­tions are Wash­ing­ton's lat­est move against the gov­ern­ment of Pres­i­dent Ni­co­las Maduro, which is widely crit­i­cized for eco­nomic col­lapse and un­der­min­ing democ­racy.

The United States im­posed sanc­tions on Maduro's wife in Septem­ber as Pres­i­dent Don­ald Trump urged mem­bers of the United Na­tions to sup­port a "restora­tion of democ­racy" in the on­ce­boom­ing coun­try, a mem­ber of OPEC.

The sanc­tions im­posed on Tues­day ap­ply to peo­ple in­volved in the cor­rupt sys­tem within Venezuela's trea­sury since 2008, the U.S. Trea­sury said.

The coun­try's trea­surer be­fore Diaz, Ale­jan­dro An­drade, was sen­tenced by a U.S. Dis­trict Court in Florida in Novem­ber to 10 years in prison for ac­cept­ing more than $1 bil­lion in bribes as part of the scheme.

An­drade, who ran the trea­sury for four years un­der late so­cial­ist leader Hugo Chavez, re­ceived prop­er­ties, plat­inum and gold Rolex watches and Mer­cedes Benz ve­hi­cles thanks to the scheme, ac­cord­ing to doc­u­ments from the South­ern Dis­trict of Florida court.

He was helped by Gor­rin, owner of tele­vi­sion sta­tion Globo­vi­sion, who has been charged with pay­ing bribes to An­drade and oth­ers as well as help­ing to laun­der the pay­ments, ac­cord­ing to the doc­u­ments un­sealed in Novem­ber.

The cases are part of a broad ef­fort by U.S. fed­eral prose­cu­tors to crack down on the use of the U.S. fi­nan­cial sys­tem to laun­der pro­ceeds from cor­rup­tion in the cri­sis-stricken coun­try that is suf­fer­ing from hy­per­in­fla­tion.

The U.S. Trea­sury state­ment cited 23 groups as be­ing part of the scheme, in­clud­ing Globo­vi­sion Tele in Cara­cas and Mi­ami, Ma­gus Hold­ings in Mi­ami, Tin­daya Prop­er­ties in New York, Planet 2 Reach­ing Inc and Posh 8 Dy­namic Inc, both of Delaware.

Maduro has said lit­tle about crim­i­nal pro­ceed­ings against for­mer Venezue­lan of­fi­cials, but says the United States is seek­ing to un­der­mine his gov­ern­ment through fi­nan­cial sanc­tions.

He is due to be in­au­gu­rated for his se­cond term on Thurs­day.

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