High-Ranking Bank Official At Venezuelan State Development Bank Pleads Guilty In Manhattan Federal Court To Participating In Bribery Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, and Mythili Raman, the Acting Assistant Attorney General for the Criminal Division of the United States Department of Justice (“DOJ”), announced today that MARIA DE LOS ANGELES GONZALEZ DE HERNANDEZ (“GONZALEZ”) pled guilty in Manhattan federal court to charges relating to a scheme in which GONZALEZ, formerly a foreign official at Banco de Desarrollo Económico y Social de Venezuela (“BANDES”), a state economic development bank in Venezuela, accepted bribes from officers and agents of a New York-based broker-dealer (the “Broker-Dealer”) in exchange for GONZALEZ directing BANDES’s security-trading business to the Broker-Dealer. GONZALEZ pled guilty today before U.S. District Judge Paul A. Engelmayer to conspiring to violate the Travel Act and to commit money laundering, as well as substantive counts of these offenses.
According to the Information against GONZALEZ, the allegations in a previously filed criminal Complaint, statements made during the plea proceedings, and other documents filed in Manhattan federal court:
At all times relevant to the charges, BANDES was a state-run economic development bank in Venezuela. The Venezuelan government had a majority ownership interest in BANDES and provided it with substantial funding. GONZALEZ was an official at BANDES and oversaw the development bank’s overseas trading activity. At her direction, BANDES conducted substantial trading through the Broker-Dealer. Most of the trades executed by the Broker-Dealer on behalf of BANDES involved fixed income investments for which the Broker-Dealer charged the bank a mark-up on purchases and a mark-down on sales.
From early 2009 through 2012, GONZALEZ participated in a bribery scheme in which she directed trading business she controlled at BANDES to the Broker-Dealer, and in return, agents and employees of the Broker-Dealer shared the revenue the Broker-Dealer generated from this trading business with GONZALEZ. During this time period, the Broker-Dealer generated over $60 million in mark-ups and mark-downs from trades with BANDES. Agents and employees of the Broker-Dealer devised a split with GONZALEZ of the commissions paid by BANDES to the Broker-Dealer. Emails, account records, and other documents collected from the Broker-Dealer and other sources reveal that GONZALEZ received a substantial share of the revenue generated by the Broker-Dealer for BANDES-related trades. Specifically, GONZALEZ received millions in bribe payments from Broker-Dealer agents and employees.
In addition, GONZALEZ paid a portion of the bribe payments she received to another BANDES employee who was also involved in the scheme.
To further conceal the scheme, the kickbacks to GONZALEZ were often paid using intermediary corporations and offshore accounts that GONZALEZ and others held in Switzerland, among other places.
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GONZALEZ, 55, of Caracas, Venezuela, pled guilty to five offenses. A chart containing the charges and maximum penalties is attached. Sentencing for GONZALEZ is scheduled for August 15, 2014 before Judge Engelmayer.
Previously, three former officers or employees of the Broker-Dealer, Ernesto Lujan, Jose Alejandro Hurtado, and Tomas Alberto Clarke Bethancourt, each pled guilty in Manhattan federal court to conspiring to violate the Foreign Corrupt Practices Act (the “FCPA”), to violate the Travel Act, and to commit money laundering, as well as substantive counts of these offenses relating, among other things, to the scheme involving bribe payments to GONZALEZ. Sentencing for Lujan and Clarke is scheduled for February 11, 2014, before U.S. District Judge Paul G. Gardephe. Hurtado is scheduled for sentencing before U.S. District Judge Harold Baer, Jr., on October 30, 2014.
Mr. Bharara praised DOJ’s Criminal Division Fraud Section and Office of International Affairs, and the Federal Bureau of Investigation, for their work in the investigation. Mr. Bharara also thanked the U.S. Securities and Exchange Commission for its assistance in this case, and noted that the investigation is continuing.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force and the Fraud Section of the DOJ Criminal Division. Assistant United States Attorneys Harry A. Chernoff and Jason H. Cowley, and Fraud Section Assistant Chief James Koukios and Trial Attorney Maria Gonzalez Calvet, are in charge of the prosecution. Assistant United States Attorney Carolina Fornos is responsible for the forfeiture aspects of the case.
Additional information about the Justice Department’s FCPA enforcement efforts can be
found at www.justice.gov/criminal/fraud/fcpa.