South Florida

Miami money manager charged in $1.2 billion Venezuelan laundering case pleads not guilty

An international banker who catered to mega-rich Venezuelans was sentenced to 10 years in prison by a Miami federal judge Monday for his supporting role in a massive $1.2 billion money-laundering scheme involving stolen funds from Venezuela’s government. Others charged and suspected in the scheme have ties to Venezuelan President Nicolás Maduro, shown here before delivering his annual message to the nation in Caracas on Jan. 21, 2015.
An international banker who catered to mega-rich Venezuelans was sentenced to 10 years in prison by a Miami federal judge Monday for his supporting role in a massive $1.2 billion money-laundering scheme involving stolen funds from Venezuela’s government. Others charged and suspected in the scheme have ties to Venezuelan President Nicolás Maduro, shown here before delivering his annual message to the nation in Caracas on Jan. 21, 2015. AFP/Getty Images

Before his arrest while on a family vacation in Italy, Gustavo Hernandez Frieri seemed to have it all.

The investment manager had various offices in Miami, Manhattan and Latin America, a wife who also worked in the financial industry, three young children attending private school, and a $2 million home in the exclusive Bay Point neighborhood of Miami.

On Friday, however, the Colombian-born Hernandez looked like anything but a picture of success as he stood in a Miami federal courtroom for his arraignment and bond hearing.

Hernandez is accused of playing a supporting role in a $1.2 billion money-laundering ring involving eight Venezuelan businessmen, government officials and a banker with ties to the embattled socialist government of Nicolás Maduro. The 45-year-old investment manager pleaded not guilty as he struggled to be freed on bond before trial. His wife, Olympia, who plans to leave him, refused to help secure his bond.

“The businesses have crumbled in the face of the indictment,” his defense attorney, Michael Pasano, told Magistrate Judge Jacqueline Becerra. “It’s likely they’re going to get divorced.”

Hernandez, who was arrested last July during the family vacation in southern Italy and extradited to Miami earlier this month, eventually managed to obtain bail — even though his wife, who was in the courtroom, refused to be a co-signer on a bond because of the couple’s impending divorce.

Judge Becerra granted Hernandez a pretrial bail package with the following conditions: a $25 million personal surety bond to be co-signed by his brother, Cesar Hernandez Frieri, and his brother-in-law, Juan Carlos Gomez, who are both in the investment business. They helped Hernandez start two investment firms, Global Securities Holdings and Global Strategic Investments, almost 20 years ago. Hernandez must also put up a $1.5 million bond requiring the defendant to make a 10 percent down payment.

Hernandez, held at the Federal Detention Center, will also be placed on home confinement with an electronic ankle monitor, and he must surrender his and his three children’s passports.

The judge agreed to his package only after increasing Hernandez’s portion of the bond threefold. She had rejected the proposal of a $500,000 bond with a 10 percent down payment that was recommended by Pasano and prosecutor Michael Nadler.

“I think the bond is low given the nature of the offense,” Becerra said of the joint proposal. She also questioned why Hernandez’s wife would not put up any assets to secure her husband’s bond.

“I asked,” Nadler said. “She said no. She refuses.”

Pasano downplayed the risk of his client fleeing the country, saying Hernandez, a naturalized U.S. citizen, wanted to return to Miami from Italy to be with his family and fight the money-laundering conspiracy charge.

Pasano also minimized his client’s role in the $1.2 billion money-laundering case, which alleges the embezzlement of vast sums of Venezuelan government funds and the bribery of officials by businessmen close to Maduro.

Hernandez is accused of helping launder at least $12 million that prosecutors say was paid in bribes to a former senior official in Venezuela’s national oil company, PDVSA, who wanted to move the money to Miami and other parts of the United States. Hernandez’s role was to put that money into a fake mutual fund so that it looked legitimate and then launder it into U.S. banks for a fee, prosecutors say.

Abraham Edgardo Ortega, the former executive director of financial planning at PDVSA, pleaded guilty in October to accepting millions of dollars in bribes that were secretly wired to U.S. and other financial institutions with the assistance of Hernandez and others charged in the massive money-laundering case.

In exchange, Ortega allowed the ring’s members to embezzle hundreds of millions of dollars from the national oil company through loan- and currency-exchange schemes that ended up in European, Caribbean and U.S. banks as well as luxury South Florida real estate and other investments. Most of the ring’s members are still at large.

Ortega, who worked at PDVSA for more than a decade, admitted he used his official role to give “priority” status to Venezuelan companies that did business with the government so they could tap into its vast oil income to make overnight fortunes.

Some of the so-called Venezuelan kleptocrats charged in the indictment have connections with Maduro, who is a suspect in the ongoing investigation, according to federal law enforcement sources familiar with the case. Maduro’s three stepsons are also under investigation, along with a wealthy Caracas TV mogul, Raúl Gorrín.

In a separate South Florida federal case, Gorrín was charged with conspiring with former Venezuelan national treasurer Alejandro Andrade to embezzle more than $1 billion from the government. Andrade pleaded guilty to a money-laundering conspiracy charge and was sentenced in November to 10 years in prison.

Andrade has helped the U.S. Attorney’s Office and Homeland Security Investigations make the case against Gorrín, who also had ties to the late Venezuelan President Hugo Chávez.

For years, the opposition had struggled to challenge Maduro. But now, Juan Guaidó, the National Assembly leader, appears to have woken up the population in just a couple of months.

Jay Weaver writes about bad guys who specialize in con jobs, rip-offs and squirreling away millions. Since joining the Miami Herald in 1999, he’s covered the federal courts nonstop, from Elian’s custody battle to A-Rod’s steroid use. He was on the Herald team that won the Pulitzer Prize for breaking news in 2001. He and three Herald colleagues were nominated as a Pulitzer Prize finalist for explanatory reporting in 2019.


  Comments