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Extractive Industries/Mining/Oil & Gas
MULTIPLE, Venezuela
Nationality of Foreign Officials: Venezuela
Summary of Allegations:
Venezuelan state oil company PDVSA is alleged to have engaged in corruption on a massive scale. Their officials accepted bribes and facilitated bid-rigging schemes in exchange for contract awards with many companies and individuals, including:
Roberto Enrique Rincon Fernandez
Tradequip Services & Marine, Inc.
In the recent years prior to his arrest in 2015, Roberto Enrique Rincon Fernandez ("Roberto Rincon"), through his companies, including Tradequip Services & Marine, Inc., allegedly had supplied PDVSA with oil equipment worth some USD 500 million a year. As a result, Rincon and his companies allegedly became one of the state oil firm's most important contractors. Rincon and Abraham Jose Shiera Bastidas ("Abraham Shiera"), Rincon's business associate, allegedly won rigged bids for PDVSA projects through a process known as "la tapa," or the lid, which calls for well-connected firms to use shell companies to place bogus bids, thus giving the appearance of fairness, while eliminating real competition. The individuals allegedly paid bribes to PDVSA officials to get Rincon-affiliated companies and only non-competitors on the shortlist of companies entitled to bid for PDVSA contracts. Juan Jose Hernandez Comerma, as a general manager and later partial owner of one of Shiera's companies between 2008 and 2012, allegedly conspired with Shiera and Rincon to bribe PDVSA officials, including Alfonzo Eliezer Gravina Munoz, to aid in the bribery scheme.
Roberto Enrique Rincon Fernandez
Wells Ultimate Services
Rincon’s bribery scheme allegedly includes setting a shell company Wells Ultimate Services (“Well”) to secure a procurement contract with PDVSA subsidiary Bariven in 2012.
According to a Court in the Netherlands, Wells was established for about a month with no actual client before bidding for Bariven's contract and received approval within hours of application.
In addition, Rincon is closely affiliated with Wells’ president and the ultimate beneficial owner.
Of the 730 bank accounts allegedly linked to PDVSA discovered by the US authorities in the broader investigation of PDVSA, 108 bank accounts are allegedly controlled by Rincon, his family, or his companies.
Charles Quintard Beech III
Florida businessman Fernando Ardila Rueda (Ardila) allegedly conspired with Shiera and Rincon from 2008 to 2014 to provide entertainment and pay bribes and other things of value to PDVSA purchasing analysts, based on a percentage of the value of contracts the officials helped to award to Shiera's companies.
From 2011 to 2012, Charles Quintard Beech III allegedly paid bribes to multiple PDVSA officials, including Gravina, in exchange for their assistance in placing Beech's companies on PDVSA bidding panels and assisting Beech’s company or companies in receiving payment for previously awarded PDVSA contracts.
In addition to monetary bribes, the individuals allegedly bribed PDVSA officials by providing things of value, including recreational travel, meals, and entertainment. In this alleged scheme employed to secure contracts with PDVSA allegedly generated USD 750 million between 2010 and 2013.
Helsinge, Inc.
Glencore
Lukoil
On 1 November 2018, Abraham Edgardo Ortega, the former executive director of PDVSA admitted acceptance of two bribes. He took USD 5 million in bribes to prioritize loan status to a French company and a Russian bank, both as minority shareholders of PDVSA’s joint venture, and USD 12 million to participate in a loan and foreign-exchange contract.
Jose Manuel Gonzales Testino ("Gonzales") and Tulio Anibal Farias-Perez ("Farias")
Gonzalez and Farias in control of multiple companies allegedly bribed a PDVSA official with a USD 629,000 illicit payment to secure favorable business decisions, including official actions to forward them PDVSA contracts with payment in U.S. dollars instead of Venezuelan bolivars and provide preferential treatment to their companies over other competitors.
Approximate Alleged Payments to Foreign Officials: 17 million monetary bribes, recreational luxury travel, meals and entertainment, beach house in Parrot Cay in the Bahamas; a luxury hotel in Aruba; two $107,500 armored cars, a $10,300 handbag, English classes for two children of a “foreign official” (one in the amount of $16,672 and the other in the amount of $8,755).
Business Advantage Allegedly Obtained: secure contracts with PDVSA
Agencies: Netherlands: Civil Lawsuit
Results:
Year Resolved: 2019
Compliance Monitor:
Ongoing: No
Details:
In November 2019, a Court of Appeal in Hague annulled an ICC award ordering Bariven to pay Wells Ultimate Services ("Wells") US $11.7 million for breaching a 2012 procurement contract.
In the ICC proceeding, Bariven claimed that the procurement contract was secured by Wells through corruption hence void under Dutch law. The tribunal held against Bariben considering its allegation did not prove direct bribery by Wells and failed the burden of proof.
The Dutch court set aside the ICC award on the ground that direct proof was too stringent a standard to apply in the context of bribery, since direct evidence was usually concealed by wrongdoers and difficult to produce. Instead, the court found that Bariven had proven its case by showing a strong indication of corruption by Wells.
Agencies: Switzerland: Office of the Attorney General
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
Helsinge Inc.
8 March 2018 - The Geneva Attorney General’s Office confirmed that two Helsinge executives have been arrested on suspicion of corruption of foreign officials and money-laundering in connection with the PDVSA scandal.
(Helsinge is organized in Panama and operates offices in Miami, Geneva and the English Channel Island of Jersey).
Agencies: United States: Civil Lawsuit
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
On 30 November 2016, PDVSA subsidiary Bariven SA filed a motion asking the Houston federal court to grant it victim status and set a restitution hearing before the sentencing of Roberto Rincon and Abraham Shiera scheduled for June 2017. Bariven seeks restitution from Rincon and Shiera to compensate for USD 600 million loss caused by the individuals' bribery scheme.
In 2017, the court denied Bariven's claim of victim status.
Agencies: United States: Civil Lawsuit
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
16 February 2018 - Harvest Natural Resources, Inc, based in Houston, brought suit in a federal court against former Venezuelan oil minister Rafael Ramirez. Harvest alleges that it lost almost half a billion dollars for refusing to pay bribes associated with the PDVSA scandal.
Agencies: United States: Civil Lawsuit
Results: Prosecution of Individuals, Prosecution of Public Officials
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
In March 2008, a Miami court unsealed a lawsuit filed by a PDVSA-linked trust in Venezuela against 40 individuals and entities for funneling bribes to corrupt PDVSA officials in exchange for oil purchase contracts. The defendants include traders, shell companies, PDVSA officials, a Nicaragua-owned bank with an office in Florida, and leading international energy trading firms such as Glencore and Lukoil.
Agencies: United States: Civil Lawsuit
Results: No Action
Year Resolved: 2021
Compliance Monitor:
Ongoing: No
Details:
08 March 2018: PDVSA, via "PDVSA US Litigation Trust" has brought a U.S. civil suit against Helsinge Inc., accusing the company of obtaining inside information and rigging bid proceedings by bribing PDVSA officials, including current VP Ysmel Serrano, in a complex scheme worth billions. According to the suit, Helsinge also provided inside information to oil trading companies such as Lukoil, Colonial Oil, Glencore, Vitol, and Trafigura ("Oil Company Co-conspirators").
11 March 2019: The District Court dismissed the suit at the Motion to Dismiss stage, finding a defect in the assignment of claims and concluding that the assignment, even if valid, would violate New York's champerty law.
18 March 2021: The 11th Circuit Court of Appeals affirmed the dismissal, despite potential merits of the case, on the grounds that appellant did not raise procedural issues on appeal.
8 November 2021: The Supreme Court declined certiorari.
Agencies: United States: Department of Justice
Results: Prosecution of Individuals
Year Resolved: 2016
Compliance Monitor:
Ongoing: No
Details:
Roberto Enrique Rincon Fernandez
On 16 December 2015, Rincon was arrested in Houston, Texas by the U.S. Department of Justice ("DOJ") and charged with one count of conspiracy to violate the U.S. Foreign Corrupt Practices Act ("FCPA") and commit wire fraud, one count of conspiracy to commit money laundering, seven counts of money laundering and four counts of violating the FCPA. On 18 December 2015, Rincon's detention without bail has been ordered based on evidence that he has substantial wealth outside of the US that makes him a flight risk. Rincon denies all allegations and entered a plea of not guilty.
On 16 June 2016, Rincon pleaded guilty to one count of conspiracy to violate the FCPA, one count of violating the FCPA, and one count to making false statements on his 2010 federal income tax return. Personal money judgment against Rincon was imposed on Rincon. As of 13 February 2018, Rincon is awaiting sentencing.
Agencies: United States: Department of Justice
Results: Prosecution of Public Officials
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
PDVSA and Venezuelan government officials
In December 2015, Ramos, Maldonado, and Gravina, three former PdVSA officials, each pleaded guilty under seal to conspiracy to commit money laundering. As part of their guilty pleas, Ramos, Maldonado and Gravina each admitted that while employed by PDVSA or its wholly owned subsidiaries or affiliates, they accepted bribes from Shiera and Rincon in exchange for taking certain actions to assist companies owned by Shiera and Rincon in winning energy contracts with PDVSA. Ramos, Maldonado and Gravina also admitted that they conspired with Shiera and Rincon to launder the proceeds of the bribery scheme. Gravina also pleaded guilty to making false statements on his 2010 federal income tax return by failing to report the bribe payments he received from Shiera, Rincon and others. As part of their plea agreements, Millan, Ramos, Maldonado and Gravina all agreed to forfeit proceeds of their criminal activity.
On 26 October 2017, Nervis Villalobos, former Venezuelan deputy energy minister, was arrested in Spain on a U.S. warrant for his involvement in the PDVSA scandal. Officials stated that in addition, Luis Carlos de Leon, a former official at a state-run electric company in Caracas, was taken into custody along with a third, unnamed person who was an executive at PDVSA’s procurement unit, Bariven.
2017 - Sometime in 2017, Former oil minister Eulogio Del Pino and former PDVSA President Nelson Martinez were arrested for their involvement in the PDVSA corruption scandal.
12 February 2018 - The DOJ announced that criminal charges were unsealed against the following five former Venezuelan government officials for their alleged participation in the PDVSA bribery scheme, as members of the PDVSA management team:
A. Luis Carlos De Leon Perez (charged with one count of conspiracy to commit money laundering; four counts of money laundering; and one count of conspiracy to violate the FCPA) - in Spanish custody awaiting extradition.
B. Nervis Gerardo Villalobos Cardenas (charged with one count of conspiracy to commit money laundering; one count of money laundering; and one count of conspiracy to violate the FCPA) - in Spanish custody awaiting extradition.
C. Cesar David Rincon Godoy (charged with two counts of conspiracy to commit money laundering and four counts of money laundering) - in custody
D. Alejandro Isturiz Chiesa (charged with one count of conspiracy to commit money laundering and five counts of money laundering) - at large
E. Rafael Ernesto Reiter Munoz (charged with one count of conspiracy to commit money laundering and four counts of money laundering) - - in Spanish custody awaiting extradition.
Additionally, the US suspects that Venezuela's former oil czar and U.N. ambassador, Rafael Ramirez, was a bribe recipient. Ramirez has not yet been charged.
20 March 2018 - Venezuela authorities arrested PDVSA oil executive Jesus Luongo for alleged corruption / graft. Arrest warrants for four other executives are outstanding.
19 April 2018 - Cesar David Rincon Godoy pleaded guilty in a U.S. court to one count of conspiracy to commit money laundering to cover up the bribes.
16 July 2018 - Luis Carlos De Leon-Perez was extradited to the U.S. and pleaded guilty in a federal court in Houston to one count of conspiracy to violate FCPA by bribing PDVSA officials.
11 December 2018 - Alfonso Eliezer Gravina pleaded guilty to one count of conspiracy to obstruct the government's investigation by concealing the fact that "Co-conspirator 1" had bribed officials of PDVSA and notifying that he was a subject of government investigation, which ultimately led to Co-conspirator 1's destruction of evidence and attempt to flee from the U.S.
9 May 2019 - Javier Alvarado Ochoa (“Ochoa”), the former Venezuelan minister of electrical development was arrested in Spain on a U.S. warrant relating to his role in the bribery scheme.
13 September 2019 - a U.S. court unsealed indictments by the U.S. DOJ back in April 2019 against three individuals for bribing PDVSA to secure businesses, enclosing charges against Ochoa (described as “Official A” in the 2017 indictment), former president of PDVSA subsidiary Bariven with his role in the bribery scheme, and against Daisy Teresa Rafoi-Bleuler and Paulo Jorge Da Costa Casqueiro-Murta, two asset managers, with helping launder the bribes.
22 March 2021 - former Citgo Petroleum Corporation procurement officer Jose Luis De Jongh Atencio pleaded guilty to a U.S. court for corruptly providing business advantages and laundering bribes. The charges stem from Atencio’s acceptance of over US$7 million bribes between 2013 and 2019 from individuals and companies, including Gonzalez and Farias-Perez, in return for securing Citgo-related procurement contracts and business advantages.
10 November 2021 -- U.S. District Court for the Southern District of Texas granted the motion to dismiss of Daisy Teresa Rafoi-Bleuler, on the grounds that the term "agent" under the FCPA was unconstitutionally vague with respect to the defendant.
Daniel D’Andrea Golindano and Luis Javier Sanchez Rangel
On 8 March 2022 the DOJ charged two former senior Venezuelan prosecutors, D'Andrea and Sanchez, with money laundering for the receipt of bribes in exchange for agreeing not to pursue criminal charges against individuals allegedly involved in corruption relating to contracts obtained with subsidiaries of PDVSA.
Agencies: United States: Department of Justice
Results: Plea Agreement, Prosecution of Individuals
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
Abraham Jose Shiera Bastidas' companies
On 16 December 2015, Shiera was arrested and jailed in Miami on one count of conspiracy to violate the U.S. Foreign Corrupt Practices Act ("FCPA") and commit wire fraud, one count of conspiracy to commit money laundering, seven counts of money laundering and four counts of violating the FCPA. On 22 March 2016, Shiera pleaded guilty to one count of conspiracy to violate the FCPA and commit wire fraud and one count of violating the FCPA. As part of Shiera's plea agreement, he agreed to forfeit proceeds of their criminal activity. Shieras sentencing is scheduled for 8 July 2016.
In January 2016, Moises Abraham Millan Escobar, former employee of Shiera, pleaded guilty under seal to one count of conspiracy to violate the FCPA for his role in the scheme.
On 10 January 2017, Juan Jose Hernandez Comerma pleaded guilty in Houston federal court to one count of conspiracy to violate the FCPA and one count of violating the FCPA. Hernandez's sentencing is scheduled for 14 July 2017.
On 8 January 2020, the United States District Court for the Southern District of Texas sentenced Juan Jose Hernandez Comerma to 48-month imprisonment with a fine of US $127,000 and forfeiture of US $3 million.
On 12 October 2017, Fernando Ardila Rueda (Ardila) pleaded guilty in Houston federal court to one count of conspiracy to violate the Foreign Corrupt Practices Act and one count of violating the FCPA. Ardila's sentencing is scheduled for 8 February 2017. The Department of Justice statement noted that Ardila conspired with Shiera and Rincon to pay bribes and other things of value to PDVSA purchasing analysts. The bribes were paid to ensure that Shiera’s and Rincon’s companies were placed on PDVSA bidding panels and in order to obtain or retain business with PDVSA. From 2008 through 2014, while he was sales director, manager and partial owner of several of Shiera’s companies, Ardila provided entertainment and offered bribes to PDVSA officials based on a percentage of the value of contracts the officials helped to award to Shiera’s companies.
On 13 October 2022, it was reported that Abraham Shiera received a major break in sentencing after cooperating with U.S. prosecutors in the investigation regarding corruption at PDVSA. Shiera was sentenced to twelve months and a day in prison.
Juan Carlos Castillo Rincon
On 13 September 2018, Juan Carlos Castillo Rincon, a former manager of a U.S.-based company admitted to bribing PDVSA officer Jose Orlando Camacho for work in Venezuela. Rincon and Camacho pled guilty respectively to conspiracy to violate the FCPA and conspiracy of money laundering in a federal court in Houston.
Jose Manuel Gonzalez Testino
On 31 July 2018, the U.S. DOJ arrested Gonzalez for bribing a PDVSA official to secure favorable business decisions.
Tulio Anibal Farias-Perez
On 7 February 2020, the U.S. DOJ indicted Farias for one count of conspiracy to violate the FCPA.
Agencies: United States: Department of Justice
Results: Plea Agreement, Prosecution of Individuals
Year Resolved: 2017
Compliance Monitor:
Ongoing: No
Details:
Charles Quintard Beech III
On 10 January 2017, Charles Quintard Beech III pleaded guilty to one count of conspiracy to violate the FCPA. Beech is scheduled to be sentenced on 14 July 2017.
Agencies: United States: Department of Justice
Results: Prosecution of Individuals
Year Resolved:
Compliance Monitor:
Ongoing: No
Details:
Namal Wakil
on 3 August 2021, it was reported that Namal Wakil was arrested on charges related to his alleged role in a scheme to bribe Venezuelan officials and launder funds to obtain contracts from state-owned and state-controlled companies Petróleos de Venezuela S.A. and Corporación de Abastecimiento y Servicios Agrícola, between 2010 and 2017.
Jhonnathan Marín Sanguino
On 6 May 2022, it was reported that Jhonnathan Marín surrendered himself to the authorities in Miami, on 25 April 2022, and was released after posting bail. Jonathan Marin is being investigated for allegedly paying more than $1.2 million dollars in bribes, between 2015 and 2018, on behalf of an unidentified accomplice, who in return was awarded joint projects of PDVSA with Chevron, French company Total and companies from Russia and China.
Carlos Urbano Fermin
On 23 May 2022, Carlos Urbano Fermin, a Venezuelan businessman, was sentenced to five years' probation after pleading guilty of paying around $1 million in bribes to a Venezuelan prosecutor, as “insurance” against any investigations into his construction company’s extensive dealings with state-run oil giant PDVSA.
Ralph Steinmann & Luis Fernando Vuteff
On 14 July 2022, it was reported that Ralph Steinmann, a Swiss national, and Luis Fernando Vuteff, from Argentina, were each indicted on one count of conspiracy to commit money laundering. U.S. prosecutors alleged that, between 2014 and 2018, Messrs. Steinmann and Vuteff worked with others to launder more than $200 million from a bribery scheme involving Venezuelan officials.
Agencies: Venezuela: State Prosecutor's Office
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
Eleven top oil executives at PDVSA were arrested on 24 October 2017 as part of bribery investigations, the Venezuelan state prosecutor Tarek Saab announced. Orlando Chacin, head of a PDVSA subsidiary for joint ventures with foreign partners, and other officials at the Petropiar joint venture with Chevron Group, and Petrozamora joint venture with Russia’s Gazprombank, were charged with overpricing and non-execution of planned projects.
In November 2017, further arrests were made at PDVSA's procurement subsidiary Bariven: Francisco Jimenez, president of Bariven, and two other Bariven executives were arrested, according to the state prosecutor. The acting president and five executives of the local office of Citgo Petroleum were also under arrest. Citgo Petroleum was acquired by the PDVS 30 years ago.
18 July 2018, the U.S. State Department requested Citgo Petroleum’s president and CEO to surrender his U.S. visa pending the graft probe on PDVSA.
14 Feb 2019, according to Venezuela’s chief state prosecutor, the Office launched a probe into the directors of PDVSA and its U.S. refiner Citgo.
22 April 2024, it was reported that former Venezuelan oil minister Tareck El Aissami was arrested for alleged corruption, and charged with treason and money laundering. In the same month, arrest warrants had been issued for staff from the bank Bancamiga.