The DOJ unsealed an indictment Monday against five former employees of Venezuela’s state energy company, charging all of them with money laundering and two with also conspiring to violate the Foreign Corrupt Practices Act.
The five defendants took at least $27 million in bribes when they worked for Petroleos de Venezuela S.A. (PDVSA).
The two charged with an FCPA conspiracy allegedly arranged for some of the money to go to two other Venezuelan government officials.
The 20-count indictment (pdf) was returned in Houston in August 2017. It was unsealed Monday.
The DOJ has now charged 15 defendants in the case. Ten have pleaded guilty.
Four of the defendants charged in the indictment unsealed Monday were arrested by local authorities in Spain in October 2017.
Those defendants are:
Luis Carlos De Leon Perez, 41
Nervis Gerardo Villalobos Cardenas, 50
Cesar David Rincon Godoy, 50, and
Rafael Ernesto Reiter Munoz, 39.
The DOJ said De Leon, Villalobos, and Reiter are in Spanish custody pending extradition.
Cesar Rincon was extradited from Spain on February 9. He made his first appearance in federal court in Houston on Monday.
A fifth defendant, Alejandro Isturiz Chiesa, 33, is at large.
All five defendants are citizens of Venezuela. De Leon is also a U.S. citizen.
Each of the defendants is charged with one or more counts of money laundering and money-laundering conspiracy.
De Leon and Villalobos are also each charged with one count of conspiracy to violate the FCPA.
Money laundering is punishable by up to 20 years in prison. FCPA-related offenses are punishable by up to five years in prison.
The DOJ said all five defendants worked for state-owned PDVSA or a subsidiary. There were therefore “foreign officials” under the FCPA.
Their group was known as the “management team.”
They took bribes from PDVSA vendors. In exchange, the management team helped the vendors win work and get paid during a liquidity crisis at the state energy company.
Some of the vendors lived in the United States, the DOJ said, or owned and controlled businesses incorporated and based in the United States.
The defendants allegedly laundered some of the bribe money through real estate transactions and other investments in the U.S.
The indictment alleges two PDVSA vendors sent over $27 million in bribe payments to an account in Switzerland.
De Leon and Villalobos controlled the account.
Some of the money went to another “foreign official” who wasn’t named in the indictment. That’s the basis for the FCPA conspiracy charges against De Leon and Villalobos.
(The FCPA can only be used to prosecute bribe payers and not bribe takers.)
One of the PDVSA vendors, Jose Shiera, 55, of Coral Gables, Florida, pleaded guilty in March 2016 to one count of conspiracy to violate the Foreign Corrupt Practices Act and commit wire fraud and one count of violating the FCPA.
The other vendor, Roberto Rincon, 58, of The Woodlands, Texas, pleaded guilty in June 2016 to one count of conspiracy to violate the FCPA, one count of violating the FCPA, and one count of making false statements on his 2010 federal income tax return. His brother is Cesar Rincon, who was charged in the indictment unsealed Monday.
Roberto Rincon and Shiera are waiting to be sentenced.
Richard L. Cassin is the publisher and editor of the FCPA Blog.