A former vice president from Venezuela’s state economic development bank pleaded guilty Monday and agreed to cooperate with prosecutors investigating a massive bribery and fraud scheme by a U.S. broker.
Maria de los Angeles Gonzalez de Hernandez, 55, admitted in federal court in New York to taking $5 million in kickbacks from Direct Access Partners LLC in exchange for bond-trading business from her employer, Banco de Desarrollo Económico y Social de Venezuela (Bandes).
Gonzalez, a former vice president of finance at Caracas-based Bandes, pleaded guilty to conspiracy to violate the Travel Act and commit money laundering, as well as two substantive counts of the offenses.
Three brokers from Direct Access pleaded guilty in August. Jose Alejandro Hurtado, Ernesto Lujan, and Tomas Alberto Clarke Bethancourt each pleaded guilty to six counts of conspiring to violate the Foreign Corrupt Practices Act, the Travel Act, and money laundering, and substantive counts of the offenses.
González and the three other defendants were arrested in May in Miami. New York-based Direct Access, an SEC-registered broker dealer, stopped doing business after the arrests.
Another banker at Bandes received some of the bribe money, Gonzalez said Monday.
The DOJ said in August a banker at Banfoandes, a state-owned bank that Venezuela closed in 2009, had also taken kickbacks from Direct Access.
Lujan, Clarke, and Hurtado are scheduled to be sentenced early next year.
The FCPA and Travel Act-related counts carry maximum prison sentences of five years, and the money laundering conspiracy and substantive counts are punishable by up to 20 years in prison.
Clarke and Hurtado and two others were named in a separate SEC civil complaint that charged them with fraud and manipulation.
Direct Access generated more than $66 million in revenue on trades in Venezuelan sovereign or state-sponsored bonds for Bandes, the SEC said. Some of the trades were phony round-trip trades with no business purpose except to generate brokerage fees, according to the complaint.
The SEC is seeking to confiscate all ‘ill-gotten gains’ from the defendants.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.