Associated Press

Posted on May 21, 2013 at 6:36 PM

c.2013 New York Times News Service

CARACAS, Venezuela — There may be no honor among thieves, but there certainly is no shortage of chutzpah.

First came the hefty kickbacks that employees at a Miami brokerage office pledged to pay María de los Angeles González, a Venezuelan banking official, for steering millions of dollars of business their way — which she did, federal prosecutors contend.

Then González’s American conspirators secretly shortchanged her on the agreed-upon bribes, lying to her about how many millions they made and delivering just a fraction of the illicit profits she was promised, according to court documents filed in New York this month.

If that were not enough, one of the Americans even insisted that González reimburse him for a portion of his income tax, arguing that Uncle Sam was unfairly taxing him on money he had passed on to her as bribes.

And she paid him.

But the real loser in what prosecutors described as a $66 million scheme appears to be the Venezuelan government, which controls the bank where González worked. It was duped into forking over huge overcharges on financial transactions to line the conspirators’ pockets, according to the court papers.

González and two of the brokerage employees were arrested in Miami this month, and federal authorities in the United States are taking steps to seize property linked to the defendants’ dealings, including Swiss bank accounts and four Florida condominiums that officials say were bought with illicit proceeds.

Financial fraud is common enough in both countries, but the scandal has generated headlines at a particularly sensitive time in Venezuela, throwing open a window onto what critics call endemic government corruption.

The nation’s new president, Nicolás Maduro, was elected last month in a special election to replace the country’s longtime president, Hugo Chávez, who died in March.

But his narrow margin of victory, just 1.5 percentage points, has left him weakened, and if the scandal were to spread it could undermine him further as the nation struggles with a deepening economic crisis characterized by high inflation and shortages of basic foods and other goods, like toilet paper.

At the center of the case is González, 55, alternately identified as vice president of finance and as executive manager of finance and funds administration of the Economic and Social Development Bank of Venezuela, known as Bandes, an arm of the government. She has a long career in private and government-run banks, and her possible ties to current and former government officials suggest that the case has the potential to shake the political establishment.

Shortly after winning the election, Maduro appointed the head of the development bank, Edmée Betancourt, to be the new president of Venezuela’s Central Bank. A previous president of the development bank, Alejandro Andrade, who led the institution at the time the suspected fraud is said to have begun, was a close ally of Chávez and is still considered to be a major power broker. He also held the post of national treasurer at the time he ran the development bank.


The court papers indicate that at least one other official at the bank besides González received kickbacks as part of the scheme. But that official, whose title appears as “Treasury Management” in an email cited in the court papers, is not named in the documents and is not charged.

“It’s a news item, just a news item,” said Temir Porras, who was named last week to lead the development bank. He said the public prosecutor’s office would investigate to see “if there is some type of punishable offense.”

But others here were quick to see in the banking scandal signs of a deeper problem.

“What the case of Bandes shows is the impunity that reigns in Venezuela,” said Carlos Tablante, a former legislator and governor. “This has to be investigated deeply, not for the amount of money it represents in bribes, but to look for networks of corruption.”

Venezuela had the lowest ranking of any country in the Western Hemisphere last year in an index compiled by Transparency International, a group that campaigns against corruption, meaning that it was perceived as the most corrupt.


The bribery scheme began in 2008, according to a criminal complaint by the office of Preet Bharara, who is the U.S. attorney in Manhattan, and a civil complaint by the Securities and Exchange Commission, both filed in federal court.

The papers contend that employees of the Miami office of the brokerage firm, Direct Access Partners, which has its headquarters in New York, struck a deal with González. She agreed to steer the development bank’s lucrative bond trading business to the firm in exchange for kickbacks.

The brokerage employees agreed to pay González at least half of the grossly inflated fees they planned to charge the bank for routine transactions, according to the federal filings.

But in fact, the complaints said, the employees routinely lied to González about the size of those fees, sharply cutting her kickbacks and increasing their share of the illicit take, the papers said.


In one trade, in August 2009, the brokerage firm charged an $875,000 markup but the employees told González that it made just $125,000, according to the SEC. She was paid $62,500, the SEC said, although her deal called for to get at least half of the firm’s full markup.

Nonetheless, González, whom the brokerage employees nicknamed “the ant” (they called the other bank employee who received bribes “passion fruit”), received as much as $9 million from 2009 through June 2010, the SEC charged.

In the scheme’s most audacious maneuver, authorities said, the brokerage firm twice bought a large quantity of bonds from the bank and sold them back to the bank at an inflated price on the same day. The two round-trip transactions generated $10.5 million in revenue for the brokerage firm while providing only a loss to the bank.


The authorities say that the transactions generated millions of dollars for the brokerage firm, paid partly in the form of bonuses and other compensation to two of its employees, Tomas Clarke, 43, and Jose Alejandro Hurtado, 38, and that the men passed on a portion of that money to González, using a web of companies and bank accounts in the United States, Panama and Switzerland. Court papers show that other executives at the firm also received large amounts from the trades in question, and that the SEC investigation is continuing. The firm did not respond to multiple requests for comment.

At one point in 2010, Hurtado complained to González, that the subterfuge had increased his income tax payments and insisted that she return to him $709,989.

González was surprisingly sympathetic. “Now I understand your bad mood when you spoke to the accountant,” she wrote to Hurtado in an email quoted in the court papers. “That Uncle Sam is baaaaaad. You work and he charges. He makes you crazy.” González then transferred to Hurtado the money he requested, the court papers say.

Hurtado and Clarke were charged with violating the Foreign Corrupt Practices Act; the two men and González were charged with money laundering and with using foreign or interstate travel to commit a crime.