Money manager charged in $1.2 billion Venezuelan laundering case pleads not guilty
Miamiherald.com/athletic-awards
Before his arrest while on a family vacation in Italy, Gustavo Hernandez Frieri seemed to have it all.
The investment manager had offices in Miami, Manhattan, and Latin America, a wife who also worked in the financial industry, three young children attending private school, and a $2 million home in the exclusive Bay Point neighborhood of Miami.
On Friday, however, the Colombian-born Hernandez looked like anything but a picture of success as he stood in a Miami federal courtroom for his arraignment and bond hearing.
Hernandez is accused of playing a supporting role in a $1.2 billion money-laundering ring involving Venezuelan businessmen, government officials, and a banker with ties to the embattled socialist government of Nicolás Maduro. The 45-year-old investment manager pleaded not guilty as he struggled to be freed on bond before trial. His wife, Olympia, who plans to leave him, refused to help secure his bond.
“The businesses have crumbled in the face of the indictment,” his defense attorney, Michael Pasano, told Magistrate Judge Jacqueline Becerra. “It’s likely they’re going to get divorced.”
Hernandez, who was arrested last July during a family vacation in southern Italy and extradited to Miami this month, eventually managed to obtain bail — even though his wife, who was in the courtroom, refused to be a co-signer on a bond because of the couple’s impending divorce.
Judge Becerra granted Hernandez a pretrial bail package with the following conditions: a $25 million personal surety bond to be co-signed by his brother, Cesar Hernandez Frieri, and his brother-in-law, Juan Carlos Gomez, who are both in the investment business. They helped Hernandez start two investment firms, Global Securities Holdings and Global Strategic Investments, almost 20 years ago. Hernandez must also put up a $1.5 million bond requiring the defendant to make a 10 percent down payment.
Hernandez, held at the Federal Detention Center, will also be placed on home confinement with an electronic ankle monitor, and he must surrender his and his three children’s passports.
Pasano downplayed the risk of his client fleeing the country, saying Hernandez, a naturalized U.S. citizen, wanted to return to Miami from Italy to be with his family and fight the charge of money-laundering conspiracy.
Pasano also minimized his client’s role in the $1.2 billion money-laundering case, which alleges the embezzlement of vast sums of Venezuelan government funds and the bribery of officials by businessmen close to Maduro.
Hernandez is accused of helping launder at least $12 million that prosecutors say was paid in bribes to a former senior official who worked in Venezuela’s national oil company, PDVSA, and wanted to move the money to Miami and other parts of the United States. Hernandez’s role was to put that money into a fake mutual fund so that it looked legitimate and then launder it into U.S. banks for a fee, prosecutors say.
Abraham Edgardo Ortega, the former executive director of financial planning at PDVSA, pleaded guilty in October to accepting millions of dollars in bribes that were secretly wired to U.S. and other financial institutions with the assistance of Hernandez and others charged in the massive money-laundering case.
In exchange, Ortega allowed the ring’s nine members to embezzle hundreds of millions of dollars from the national oil company through loan- and currency-exchange schemes that moved the money to European, Caribbean, and U.S. banks as well as luxury South Florida real estate and other investments. Most of the ring’s members are still at large.
Ortega, who worked at PDVSA for more than a decade, admitted he used his official role to give “priority” status to Venezuelan companies that did business with the government so they could tap into its vast oil income to make overnight fortunes.
Some of the so-called Venezuelan kleptocrats charged in the indictment have connections with Maduro, who is a suspect in the ongoing investigation, according to federal lawenforcement sources familiar with the case. Maduro’s three stepsons are also under investigation, along with a wealthy Caracas TV mogul, Raúl Gorrín.
In a separate South Florida federal case, Gorrín was charged with conspiring with former Venezuelan national treasurer Alejandro Andrade to embezzle more than $1 billion from the government. Andrade pleaded guilty to a money-laundering conspiracy charge and was sentenced in November to 10 years in prison.
Jay Weaver: 305-376-3446, @jayhweaver