American investigators are increasingly focusing on Venezuelan officials suspected of corruption, including officials at the government-owned oil company, Petróleos de Venezuela.
A top finance manager for Venezuela’s government-run oil company is suspected of taking millions of dollars in bribes to invest company pension money in an American hedge fund, according to court papers in one case.
High-ranking Venezuelan government officials, including some at the oil giant, used shell companies, fake contracts and import scams to camouflage the illicit movement of more than $4 billion through a European bank accused of being a money-laundering haven, according to a Treasury Department investigation.
These cases and others like them show how American investigators are increasingly focusing on Venezuelan officials suspected of corruption, including officials at the government-owned oil company, Petróleos de Venezuela, known as Pdvsa. The cases have come together as American officials are stepping up investigations into narcotics trafficking that frequently involve government corruption as well.
The inquiries have opened a window into what is believed to be widespread corruption at the oil company and elsewhere in Venezuela, which received a bonanza of petrodollars during the boom years when oil prices soared to more than $100 a barrel.
The concern in Washington over corruption in Venezuela, one of the largest foreign suppliers of oil to the United States, comes from the top. When President Obama ordered sanctions in March against Venezuelan officials responsible for human rights violations, he directed the Treasury Department to also target officials involved in corruption.
Administration officials say the White House insisted on adding the focus on graft, going beyond what was sought in a law passed by Congress that called for sanctions only on human rights violators.
Federal officials have not announced any indictments, but the possibility that American prosecutors might file charges against high-level Venezuelan oil officials is causing alarm among American oil companies that do business with the government-run corporation.
With Venezuela desperate to increase revenue as oil prices have plummeted to less than half their levels last year, Pdvsa has slowly been moving away from the leftist government’s hostile public posture toward American oil companies. It has begun to offer them more attractive terms and has signaled a greater willingness to work closely with companies in the United States, which has historically been the largest buyer of the country’s crude oil.
But oil executives fear that those overtures could end if the United States is seen to be targeting Pdvsa officials over corruption.
“In this town people talk a lot about that happening,” said Francisco J. Monaldi, a fellow in Latin American energy policy at the Baker Institute for Public Policy at Rice University in Houston, a center of the American oil industry. He said oil executives were encouraged by the signs that Pdvsa was seeking to work more closely with American companies, but he added, “They’re worried that will totally collapse, by the rumors they hear that a lot of the investigations that are happening around Venezuela have Pdvsa in the middle of it.”
The pot was stirred vigorously in March when the Treasury Department accused a European bank, the Banca Privada d’Andorra, of being a conduit for money-laundering schemes operated by organized crime groups in Russia and China, as well as by high-ranking Venezuelan officials, including some at Pdvsa.
Treasury officials said their inquiry into the Andorra Bank case was continuing with the help of criminal investigators at the Justice Department.
The Treasury Department said that more than $4 billion from Venezuela, at least half of it from Pdvsa, had passed through the bank in a variety of fraudulent schemes and that at least $50 million of that had gone through the American financial system.
The Treasury Department alleged that the schemes involved high-ranking government officials in Venezuela and that the money launderers used shell companies, fake contracts, mischaracterized loans and overstated imports and exports to camouflage their actions.
The authorities in Andorra ordered a takeover of the bank. But the bank’s principal owners said they would fight the takeover and have denied the accusations made by the Treasury Department, saying they had alerted regulators of potentially inappropriate transactions.
Another recent investigation, involving a Venezuelan hedge fund operator based in Connecticut, uncovered corruption allegations involving Pdvsa’s pension funds.
According to papers filed by a court-appointed receiver who is seeking to recover money for defrauded investors, the hedge fund operator, Francisco Illarramendi, paid at least $30 million in bribes to Pdvsa officials to steer at least $100 million in pension money into his hedge fund and to give him access to profitable bond and currency transactions from 2006 to 2010.
Federal prosecutors also alleged that Mr. Illarramendi had bribed Pdvsa officials in exchange for investments in his funds.
Federal prosecutors charged that Mr. Illarramendi operated the hedge fund as a Ponzi scheme, in which money from new investors was used to pay off older investors and cover up losses at the fund. Mr. Illarramendi pleaded guilty in Connecticut to fraud charges in 2011 and was sentenced last January to 13 years in prison.
The receiver filed a civil lawsuit in federal court in Connecticut against a former high-level Pdvsa finance manager, Juan S. Montes, saying that he had received the bribe money and passed on part of it to other oil company officials, although it does not name them. Mr. Montes, who went by the nickname Black in an effort to avoid detection by investigators, later quit Pdvsa and moved to Florida, according to the documents.
Papers filed in the lawsuit indicate that the case against Mr. Montes was settled, but the terms of the settlement were not made public.
Elliot Greenfield, a lawyer for Mr. Montes, refused to comment on the case.
Venezuela sits atop the world’s largest estimated oil reserves, and oil has made up more than 95 percent of export revenue in recent years.
Pdvsa is widely seen to be corrupt, and foreign companies and consultants that regularly do business with it in Venezuela say requests for kickbacks are common.
From 2004 until last year the company was run by Rafael Ramírez, a former confidant of Hugo Chávez, the longtime leftist president, who died in 2013.
Mr. Ramírez, who put family members in important positions in the company, became one of Venezuela’s most powerful people. He also served for years as energy minister, and for a time he also held the post of vice president in charge of the economy under President Nicolás Maduro, who was elected to succeed Mr. Chávez.
But he was eventually pushed out of Mr. Maduro’s inner circle and stripped of his cabinet posts and his job as the head of Pdvsa. He is now Venezuela’s ambassador to the United Nations, a post that gives him diplomatic immunity in the United States.
A top Pdvsa executive who was said to be close to Mr. Ramírez was arrested this year in Venezuela and charged with acts of corruption involving oil company contracts, officials there said in April. The executive, José Luis Parada, was the head of operations in the western part of the country and was previously a top official in the oil company’s procurement arm.
Mr. Ramírez agreed to an interview last week but canceled at the last minute when his aides said he was sick.
The Wall Street Journal published an article on Thursday that referred to some of the federal corruption investigations involving Pdvsa and focused on Mr. Ramírez’s leadership of the company.
Mr. Ramírez responded with a series of posts on Twitter, saying, “Today the infamy and the misery of the enemies of the people use big media to attack my name and Commander Chávez.”
Not all cases focusing on Venezuela and corruption involve Pdvsa. In late 2013 a former executive at a Venezuelan bank admitted in United States District Court that she had taken bribes to steer bank funds to an American brokerage firm. In a plea agreement, the banker, María de los Ángeles González, said that she had taken part in other kickback schemes, that other Venezuela banking officials were involved and that she promised to cooperate with investigators.
Most corruption cases come to the attention of American officials if the American banking system is used to move illicit funds, if bribes are paid by American companies or if other American laws are broken.
New York Times | By WILLIAM NEUMAN