A sales representative and a former president of a U.S.-based company are facing charges for their alleged roles in a scheme to corruptly secure business advantages from Venezuela’s state-owned and state-controlled energy company, PDVSA.
PDVSA has long been a vehicle for corruption and is at the center of numerous schemes designed to embezzle billions of dollars from PDVSA for the personal gain of corrupt Venezuelan officials and businessmen. For example, a 2014 currency exchange scheme was designed to embezzle and launder around $600 million from PDVSA, money obtained through bribery and fraud. By May 2015, the conspiracy had allegedly doubled in amount to $1.2 billion embezzled from PDVSA, according to the Department of Justice.
In the latest developments surrounding PDVSA, Rafael Enrique Pinto Franceschi and Franz Herman Muller Huber were charged in a five-count indictment returned in the Southern District of Texas on Feb. 21. The indictment was unsealed Feb. 26, when Pinto Franceschi and Muller Huber made their initial appearances before U.S. Magistrate Judge Jonathan Goodman of the Southern District of Florida.
Pinto Franceschi and Muller Huber are each charged with one count of conspiracy to violate the Foreign Corrupt Practices Act, one count of conspiracy to commit wire fraud, two counts of wire fraud, and one count of conspiracy to launder money.
The indictment alleges that beginning in or around 2009 and continuing through at least 2013, Pinto Franceschi, a sales representative for a PDVSA supplier, and Muller Huber, president of “Company A,” conspired with others to bribe three PDVSA officials in exchange for assistance in connection with PDVSA business. According to the indictment, PDVSA officials allegedly assisted Company A in obtaining additional PDVSA contracts, inside information, and payment on past due invoices in exchange for bribe payments.
The Department of Justice does not identify Company A. Muller Huber’s LinkedIn profile shows that he is president of Venequip Machinery Sales Corp. (a shady looking supplier of industrial equipment, whose business page directs you to a construction magazine Website).
The indictment alleges that when Company A received a payment from PDVSA, “Pinto would alert one of the PDVSA officials who would, in turn, create a fictitious invoice from a Panamanian shell company charging Company A three percent of whatever payment Company A had received from PDVSA and directing Company A to send payment to a Swiss bank account. According to the charges, the false invoice would be sent to Muller, who would ensure that the invoices were paid.
The wire fraud charges against Pinto and Muller are based on allegations that, in addition to directing Company A money to the three PDVSA officials to benefit Company A, Pinto and Muller received kickbacks in connection with the scheme. In total, Pinto is alleged to have received over $985,000 in kickback payments, and Muller over $258,000.
Two of the three officials that Pinto and Muller are accused of bribing—Jose Camacho and Ivan Guedez, both of Houston—have already pleaded guilty in connection with the case and are pending sentencing.”
With the unsealing of the indictment on Feb. 26, the Justice Department has announced charges against 21 individuals, 15 of whom have pled guilty, as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA.