South Florida

Feds freeze millions in assets linked to stolen Venezuelan oil funds laundered in South Florida

The Porsche Design Tower in Sunny Isles Beach was mentioned in a recent federal indictment when prosecutors alleged a Venezuelan official bought a $5.3 million condo there as part of a $1.2 billion money-laundering scheme. The developer was not implicated in wrongdoing.
The Porsche Design Tower in Sunny Isles Beach was mentioned in a recent federal indictment when prosecutors alleged a Venezuelan official bought a $5.3 million condo there as part of a $1.2 billion money-laundering scheme. The developer was not implicated in wrongdoing. El Nuevo Herald

Federal prosecutors have frozen hundreds of millions of dollars in South Florida luxury real estate and other assets linked to a network of Venezuelan business people and former government officials charged with laundering more than $1 billion that U.S. authorities say was stolen from the country’s vast oil income.

Among the targeted assets are at least 17 South Florida homes, condos and horse ranches ranging in total value from $22 million to $35 million, based on property assessments in public records and real estate market estimates.

They include a condo in the Porsche Design Tower in Sunny Isles Beach, a residence in the affluent Bay Point area of Miami, four homes in the exclusive Cocoplum neighborhood of Coral Gables, and two ranches in the wealthy equestrian community of Wellington in Palm Beach County.

Also facing federal forfeiture: More than $45 million that has already been seized by U.S. authorities in the past year, along with additional deposits at City National Bank of New Jersey and other financial institutions in the Bahamas, England and Switzerland.

This week, the U.S. Attorney’s Office filed a motion to freeze the assets of nine defendants recently charged with conspiring to commit money laundering by transferring funds from Venezuela’s state-owned oil company, PDVSA, to South Florida, the Caribbean, Europe and Central America for their personal enrichment. Some of the defendants are close to the nation’s president, Nicolás Maduro, who is also under investigation, the Miami Herald has learned.

Their assets — including the Porsche Design Tower condo owned by former PDVSA legal counsel Carmelo Urdaneta Aqui — are typically listed in other people’s names or corporate companies to disguise the defendants’ ownership interests, prosecutors say.

U.S. District Judge Kathleen Williams granted the prosecution’s motion, which prevents the defendants from selling their assets. The Feds can seize the properties only if they secure convictions through plea deals or at trial.

Only two of the nine defendants charged so far are in custody. Matthias Krull, a German national who resided in Panama and also worked as a private-wealth management banker in Switzerland, pleaded guilty on Wednesday in Miami federal court to conspiring to commit money laundering. Krull, 44, who was arrested last month at Miami International Airport and is being held at the Federal Detention Center, admitted in court that he was involved in at least $550 million worth of money-laundering activities.

Krull, represented by lawyer Oscar S. Rodriguez, is cooperating with Homeland Security Investigations and the U.S. Attorney’s Office, according to his plea agreement. By pleading guilty, Krull faces up to 10 years in prison instead of potentially twice that amount of time under an indictment charging the other eight defendants. Krull’s sentencing hearing is set for Oct. 29 before U.S. District Judge Cecilia Altonaga.

The only other defendant in custody is Miami-based investment broker Gustavo Adolfo Hernandez Frieri, 45, who was arrested last month in Italy and is facing extradition. Hernandez, a Colombian-born naturalized U.S. citizen, is accused of using his Miami financial firm, Global Securities Advisors, and another firm, Global Strategic Investments, to launder money with false mutual-fund investments. A Homeland Security investigator says in a criminal affidavit that the two brokerage companies, which are listed as having offices at 701 Brickell Ave., are “affiliated” and were used by Hernandez for meetings with members of the money-laundering network.

Representatives of Global Strategic Investments insist Hernandez has had no involvement in the firm, which is headed by Hernandez’s brother, Cesar.

The remaining seven defendants, including two former PDVSA senior officials accused of pocketing bribes as part of the alleged massive money-laundering scheme, are in Venezuela or other foreign countries.

The Miami criminal case is the largest money-laundering racket — totaling at least $1.2 billion — ever alleged against former Venezuelan officials and business people, some of whom are close to Venezuelan President Maduro. Maduro himself is also under investigation, along with his three stepsons and a TV network mogul, Raúl Gorrín, who also owns a Cocoplum home that he recently put on the market for $8 million. But Maduro, the stepsons and Gorrín have not been charged in the ongoing investigation.

Even if Maduro, who became president after Hugo Chávez’s death in 2013, is ultimately charged, it’s unlikely he would be brought to the U.S. for prosecution. But the probe could add to the political challenges already facing the embattled president. Maduro has been the focus of months of protests over his country’s failing economy.

The president’s stepsons, Gorrín and others are suspected of receiving hundreds of millions of dollars in funds from Venezuela’s national oil company that were transferred to bank accounts set up in other people’s names in Europe.

On Wednesday, it was disclosed that about $200 million in the country’s oil funds was transferred overseas to the president’s stepsons in the name of Mario Enrique Bonilla Vallera, a Venezuelan businessman who U.S. authorities say was a “straw” owner of their bank accounts. Bonilla, who was added as a defendant to the new indictment, is also listed as the registered officer for a handful of Florida businesses whose mailing addresses are linked to all four Cocoplum residences being seized by federal prosecutors, state records show.

Maduro, his stepsons and Gorrín, however, were not identified in the court hearing or in case records.

The alleged money-laundering conspiracy began in December 2014 with a currency-exchange scheme to embezzle $600 million from PDVSA obtained through bribes and fraud, the criminal affidavit says. The defendants used an associate, who would later become a confidential source for the feds, to launder a portion of the PDVSA funds. By May of 2015, the conspiracy had doubled to $1.2 billion embezzled from Venezuela’s national oil company.

In early 2016, the associate approached Homeland Security investigators in Miami about cooperating and becoming a confidential source, according to the affidavit. The source agreed to wear a recording device to launder $78 million in PDVSA funds that he had received from a loan contract with the national oil company.

The federal probe, called Operation Money Flight, was launched with the initial focus on the defendants’ efforts to launder a portion of the $78 million. That investigation uncovered the broader money laundering, according to the affidavit.

The eight defendants named in the complaint are accused of embezzling funds from Venezuela’s oil income and exploiting its foreign-currency exchange system to amass illegal fortunes in the United States and other countries. To leverage their profits, the defendants took advantage of their access to the Venezuelan government’s foreign-currency exchange system, which offers a far more favorable rate than the everyday market. The system was used to convert dollars and euros to bolivars and then back to dollars and euros as the defendants stole from the country’s oil riches for overseas investments in Florida, Europe and other parts of the world.

A factual statement filed with Krull’s plea agreement Wednesday jibes with the initial criminal affidavit that was unsealed upon his arrest last month. The court records put Krull in the middle of the money-laundering racket as the go-to banker for the Venezuelans and others. Some met with Krull at the banker’s Panama office as well as at Gorrín’s office in Caracas and condo on Fisher Island in Miami.

While Maduro is not mentioned by name in any court records, there are references to him as “Venezuelan Official 2” and to his stepsons, according to multiple sources familiar with the probe. His stepsons — Yosser Gavidia Flores, Walter Gavidia Flores and Yoswal Gavidia Flores — though also unnamed are described by the sources as receiving an estimated $200 million in funds stolen from the nation’s national oil company, Petroleos de Venezuela, S.A., or PDVSA, that were wired to a European bank in late 2014 and early 2015.

The deposits for his three stepsons — the grown children of Maduro’s wife, Cilia Flores, from previous relationships — were among 10 wire transfers totaling about $600 million, according to the affidavit by Homeland Security Investigations. Flores is not mentioned by name in any court records either.

The affidavit says the wire transfers were made from PDVSA, with about $265 million going to accounts linked to the complaint’s lead defendant, Francisco Convit Guruceaga, a Venezuelan billionaire businessman. He and other members of the wealthy class are often referred to as the “boliburgués,” an elite politically connected group in Venezuela. An unnamed conspirator also received some of the money, according to the affidavit filed by Assistant U.S. Attorney Francisco Maderal.

Roughly $200 million went to the grown stepsons of Venezuelan Official 2. Sources say that Venezuelan Official 2 is Maduro.

Court documents say another $80 million went to “Conspirator 7.” Sources familiar with the affidavit told the Herald that Conspirator 7 is Gorrín, owner of the Globovision television network in Venezuela. Gorrín, who has close ties to Maduro and the late president Chávez, has been sharply criticized for turning a pro-opposition news network into one more friendly to the president.

In late 2017, Gorrín tried to broker an exit strategy with the Trump administration for Venezuela’s beleaguered government, according to various Washington sources, by peddling the idea that Maduro and other key government leaders might be willing to negotiate a transition in Venezuela in exchange for amnesty. He also retained Ballard Partners — the firm of President Donald Trump’s former Florida lobbyist — ostensibly to help his Venezuelan TV network company expand into U.S. markets.

Gorrín’s lawyer in Miami, Howard Srebnick, denied any wrongdoing by his client.