Join our brand new verified AMN Telegram channel and get important news uncensored!

Feds target Venezuelan brothers in new $4.5 billion money-laundering investigation

Department of Justice. (Scott "Skippy"/Flickr)

The Justice Department is building a new money-laundering case against two politically connected Venezuelan bankers with financial and real estate investments in South Florida who are suspected of stealing more than $4.5 billion from Venezuela’s socialist government, the Miami Herald has learned.

The investigation is the third massive U.S. money-laundering case targeting members of Venezuela’s young business elites who allegedly paid millions in bribes to government officials for access to billions in oil income, according to sources familiar with the probe. The allegedly illicit funds were then secreted away to Swiss bank accounts before being moved again into the United States.

In the latest case — the biggest of the three so far — federal prosecutors are zeroing in on Venezuelan bankers Luis and Ignacio Oberto. The brothers are suspected of making fortunes by using shell companies to provide sham loans to Venezuela’s state-owned oil company, which in turn sent billions in inflated payments to their Swiss bank accounts with the help of a rogue banker, according to sources.

Since last year, federal prosecutors have reached out to their Swiss counterparts for assistance because the embezzled Venezuelan funds were transferred to numerous Swiss banks holding dozens of accounts allegedly linked to the Oberto brothers, the sources told the Herald. The brothers’ principal Swiss banker was Charles Henry De Beaumont, with CBH Compagnie Bancaire Helvetique SA in Geneva, where the Obertos kept most of their accounts.

The Oberto brothers, who have not been charged in the U.S. investigation, are represented by two of the most prominent criminal defense attorneys in South Florida. In a joint statement, Ed Shohat, representing Luis Oberto Jr., and David O. Markus, representing Ignacio Oberto, said their clients have done nothing wrong.

“Luis and Ignacio Oberto are both highly respected businessmen who have never been accused in any country of any crime,” their lawyers said. “And for good reason — they are honorable, ethical, and transparent. They have committed no crime. Any suggestion to the contrary will be met with a full-court-press defense.”

Earlier this month, a spokesman for CBH Compagnie Bancaire Helvetique, said De Beaumont resigned from the private wealth management bank in 2012, without providing an explanation.

Asked about De Beaumont’s key role in allegedly assisting the Oberto brothers, the bank said in a statement: “Although CBH cannot comment on the existence or nonexistence of any clients, CBH has never engaged in or facilitated money laundering or unlawful banking transactions, and neither CBH nor its employees have ever been accused of any wrongdoing.”

De Beaumont, 43, could not be reached for comment for this story. The U.S. Attorney’s Office and Homeland Security Investigations in Miami declined to comment.

Of the two Oberto brothers, Luis, who is older, has the higher profile. Luis Oberto Jr. is considered a Venezuelan wheeler-dealer, traveling regularly between South America, the United States and Europe. At 43, he has established a formidable reputation in banking and securities trading, including lucrative loan and bond deals with the Venezuelan government. His wife, Maria Graciela Gill de Oberto, is the daughter of one of Venezuela’s major bankers. Oberto Jr. owns luxury high-rise apartments on Manhattan’s East Side and at a wellness resort in Miami Beach.

Oberto Jr. also has a passion for art collecting, like his father, Luis Oberto Sr., a banker himself who donated a collection of 1960s-era Venezuelan artworks, posters and photographs to the Museum of Modern Art Library in New York. “I think a collector would like to have inexhaustible resources to be able to have everything he wants,” Oberto Jr. once said.

But all is not perfect in the rarefied world of Oberto Jr. and his younger brother, Ignacio, 36, who also owns a condo at the Carillon Miami Wellness Resort in Miami Beach.

Both brothers have been under investigation over the past two years by federal authorities. Homeland Security investigators are gathering troves of emails, bank records and cooperating witness statements showing the Obertos allegedly embezzled billions from Venezuela’s government by paying bribes to officials and then moving the funds to Europe and eventually to the United States, according to sources familiar with the investigation.

Justice Department prosecutors have asked Swiss authorities to obtain bank records reflecting transfers of illicit funds from the Venezuelan national oil company’s accounts with Banco Espirito Santo to the Oberto brothers’ accounts at CBH Compagnie Bancaire Helvetique and several other Swiss banks.

The crux of the federal probe is that the Oberto brothers operated two main shell companies, Violet Advisors SA and Welka Holdings Limited, that allegedly made sham loans to Venezuela’s state-owned oil company, PDVSA, in 2012. In exchange for bribes, PDVSA officials approved the brothers’ loan contracts and then processed the loan payments through the government’s favorable bolivar-dollar exchange system to boost their profits exponentially, according to sources familiar with the probe.

PDVSA officials wired the loan payments through Banco Espirito Santo to the brothers’ various Swiss accounts between 2012 and 2014, sources familiar with the U.S. investigation said. (Espirito Santo, Portugal’s biggest bank, collapsed in 2014 amid allegations of fraud and money laundering. Espirito Santo operated a branch in downtown Miami that is now known as Brickell Bank.)

The Oberto brothers’ main banker was CBH’s De Beaumont, though they also had accounts in other shell companies at other Swiss banks that received tainted Venezuelan funds, according to sources.

De Beaumont also assisted the Oberto brothers in moving the illicit PDVSA funds from Switzerland to banks in the United States, including Miami, as well as to offshore accounts in the Caribbean, according to sources familiar with the investigation. Among the brothers’ biggest transfers was $367 million from their CBH account to an offshore company called Bagnet Capital Ltd., sources said.

The alleged purpose of the wire transfers was not only to enrich the Oberto brothers but also to pay kickbacks to Venezuela government officials who initially approved the brothers’ loans and currency-exchange schemes, according to sources.

Other unnamed conspirators in Venezuela, Europe and the United States were also paid as part of the brothers’ alleged bribery, embezzlement and money-laundering schemes, sources said.

In total, billions of PDVSA dollars were transferred from Venezuela to Switzerland and then with De Beaumont’s assistance to the United States, including millions into the Oberto brothers’ personal bank accounts and real estate investments in Miami and New York, sources said.

In a statement, CBH Compagnie Bancaire Helvetique said “strict Swiss laws prohibit” the private banker from confirming whether the Oberto brothers are clients. But the bank said it “has always responded promptly and thoroughly to all international assistance requests relating to clients” and has “always maintained rigorous internal anti-money laundering safeguards,” according to the statement issued by spokesman Christoper Robinson.

Earlier this year, Swiss news media reported that the Justice Department sent a request for legal assistance in March 2018 to Switzerland “in connection with the PDVSA scandal.” The Swiss Federal Supreme Court revealed in May of this year that the U.S. investigation covered the misappropriation of more than $4.5 billion, “mainly through accounts opened in Switzerland.”

The Justice Department memo only identified De Beaumont by name and referenced “other conspirators,” though the Oberto brothers were not mentioned. The Herald has learned from sources familiar with the U.S. investigation that both Luis and Ignacio Oberto are among De Beaumont’s alleged conspirators.

“According to information and documents provided by several cooperating conspirators, De Beaumont, a Swiss banker with Compagnie Bancaire Helvetique (CBH), knowingly conspired with the other conspirators to defraud CBH and launder the proceeds of the fraud and embezzlement scheme through CBH and through other means, including banks and real estate in Miami, Florida,” according to the March 13, 2018, Justice Department memo to the Central Authority of Switzerland.

“More specifically, De Beaumont arranged for several shell companies to be created to receive the embezzled U.S. dollars from PDVSA accounts into CBH accounts arranged for by De Beaumont,” the Justice Department memo says. “De Beaumont used numerous shell companies so as to not attract negative attention by way of any single company receiving too much money. The total amount in U.S. dollars embezzled through the scheme is approximately $4.5 billion, with the majority of that amount routed through CBH.”

As a Swiss banker, De Beaumont enjoyed the reputation of attracting wealthy Venezuelans like the Oberto brothers, who deposited their millions at CBH Compagnie Bancaire Helvetique in Geneva. It was a highly lucrative business for De Beaumont, who charged a .75% fee for each wire transfer in and out of the bank.

The Swiss banker made about $22 million in fees from receiving and transferring the PDVSA funds for the Obertos and others, according to the Justice Department memo. In early 2014, the Swiss banker used $4.6 million of those fees to buy a condominium at the exclusive Continuum high-rise on the southern tip of Miami Beach and another $1.3 million to buy real estate in the Dominican Republic.

A former Venezuelan prosecutor told Bloomberg in a recent article that politically connected Venezuelan business people who made millions doing deals with the socialist regimes of the late President Hugo Chávez and his successor, Nicolás Maduro, were steady customers at CBH.

“This is the go-to bank for Venezuelans to hide money,” said Zair Mundaray, who handled financial crimes cases for the Venezuelan attorney general’s office until mid-2017 and now lives in Colombia. “They all banked at CBH.”

Swiss prosecutors are also conducting a parallel investigation, according to sources familiar with the mutual assistance between Switzerland and the United States.

The Oberto brothers are only the latest members of Venezuela’s young elites — known as “boliburgueses” — who have done business deals with one another and the Venezuelan government and who are now in the cross hairs of U.S. prosecutors in Miami and Washington, D.C.

Former Venezuelan national treasurer Alejandro Andrade, TV network mogul Raúl Gorrín and wealthy businessman Francisco Convit Guruceaga are among those who were close to Chávez and Maduro. Andrade, Gorrín and Convit are the most prominent of a dozen defendants who have been charged in two Venezuelan money-laundering cases in South Florida, totaling more than $1 billion each. The cases involved bond, loan and currency-exchange schemes approved by Venezuelan officials, including Andrade and PDVSA officials. More than half of the defendants are still at large.

So far, the biggest Venezuelan defendant in U.S. custody is Andrade, who served as national treasurer from 2007 to early 2011. Soon after his resignation, Andrade moved to an equestrian farm he bought in the wealthy community of Wellington in Palm Beach Country.

Andrade lived off $80 million in funds stolen from Venezuela’s national treasury that he kept in his Swiss bank account at CBH, according to a statement filed with his plea agreement. He used some of that money to buy private planes and take care of his show horses. In late 2017, Andrade pleaded guilty to money laundering while he cooperated with U.S. authorities. He was sentenced to 10 years in prison.

Since 2010, the international money-laundering schemes led by Andrade, Gorrín and the others have caused extreme economic hardship for everyday Venezuelans, say federal authorities, who have imposed sanctions on the state-owned oil company, PDVSA. Oil rich and once wealthy, Venezuela has deteriorated into an impoverished country suffering from hyperinflation as well as food and medicine shortages. More than four million people have fled the country in recent years, according to the United Nations.

Tobias Roche, a former federal agent who for 30 years worked with U.S. Immigration and Customs Enforcement and the U.S. Marshals Service, said the rampant Venezuelan corruption now under investigation has contributed significantly to Venezuela’s dramatic economic downfall.

“The impact of these actions are horrible because right now the country is devastated with high crime and poverty,” Roche said. “Some of those responsible are living here (in Miami and New York) like kings with money that not only they did not earn legitimately but that was obtained in a way that condemned millions to the utmost poverty.”

“The riches they enjoy were stolen, either from PDVSA or other government entities, through programs that in some cases were specifically designed to funnel money out,” said Roche, who co-founded the U.S. Department of Homeland Security’s Foreign Corruption Investigations Group.

Another person familiar with the U.S. probes of Venezuelan kleptocracy agreed.

“These are huge fortunes,” the person said. “To put it all in perspective, you have to ask yourself, how large is Bill Gates’ fortune or the fortune of Steve Jobs’ family?

“These are people who worked a lifetime to build their empires, and these people (in Venezuela) now rival them through graft, bankrupting a whole country and creating a human crisis in the process.”


© 2019 Miami Herald

Distributed by Tribune Content Agency, LLC.