NEW YORK (Reuters) - U.S. prosecutors and securities regulators announced charges on Tuesday against several people in connection with an alleged kickback scheme involving a Venezuelan finance official.
Federal authorities alleged two of the defendants, who have ties to a New York broker-dealer, bribed the official to secure the bond trading business of Venezuela’s state economic development bank.
“As alleged, the defendants conspired to use Venezuela’s economic development bank as their personal piggy bank,” George Venizelos, the FBI assistant director-in-charge, said in a statement.
The U.S. Securities and Exchange Commission brought a separate civil complaint against four people. Two of them were also named in the criminal case, filed in U.S. District Court in Manhattan.
Among those charged in the criminal complaint was María de los Ángeles González de Hernandez, 58, a vice president at Caracas-based Banco de Desarrollo Económico y Social de Venezuela, known as Bandes.
The case could potentially become an embarrassment for President Nicolas Maduro, who narrowly won election in April.
Recently-named Central Bank President Edmee Bentacourt was president of Bandes for part of the period in which the alleged bribes were paid.
A central bank official said Betancourt was not available to comment on the issue. Bandes did not respond to requests for comment.
Venezuela’s opposition, which has questioned the legitimacy of its rule and alleged the vote was stolen, may pounce on the case as an example of corruption.
However, complex financial fraud cases in the past have received little attention even among government critics.
The two other defendants, Tomas Alberto Clarke Bethancourt, 43, and Jose Alejandro Hurtado, 38, were both employees of a broker-dealer identified in the SEC’s lawsuit as Direct Access Partners. They were both charged with criminal violations of the Foreign Corrupt Practices Act.
Prosecutors said that from April 2009 to June 2010, Gonzalez received kickbacks in exchange for directing business to the broker-dealer.
In total, Gonzalez received at least $5 million in bribes, the complaint said. The kickbacks were often paid through intermediary corporations and offshore accounts in Switzerland, among other places, the complaint said.
Gonzalez, Clarke and Hurtado were arrested Friday in Miami and remain in custody.
Jane Moskowitz, a lawyer for Gonzalez, declined comment. Henry Bell, a lawyer for Clarke, and Frank Rubino, a lawyer for Hurtado, declined comment. Clarke and Hurtado were also both named as defendants in the SEC case.
The SEC said as a result of the kickback scheme, Direct Access Partners generated more than $66 million in revenue from January 2009 to June 2010 through fees on trade executions in Venezuelan sovereign bonds for the bank.
“These traders triggered a fraud that was staggering in audacity and scope,” Andrew Calamari, director of the SEC’s New York regional office, said in a statement.
In a related civil action filed Monday seeking forfeiture of assets in a number of bank accounts, the U.S. government cited another unnamed Venezuelan bank that also allegedly received kickbacks.
A federal judge issued seizure warrants on Monday against several bank accounts and a restraining order against properties in Miami that U.S. prosecutors said were bought by Hurtado with proceeds from the scheme.
The case is Securities and Exchange Commission v. Bethancourt, U.S. District Court, Southern District of New York, No. 13-3074.
Reporting by Nate Raymond; additional reporting by Jonathan Stempel, Aruna Viswanatha, Brian Ellsworth and Mario Naranjo. Editing by Andre Grenon, Carol Bishopric, Tim Dobbyn and Bob Burgdorfer