Former Venezuelan Official Pleads Guilty to Money Laundering Charge in Connection with Bribery Scheme
The former general manager of the procurement subsidiary of Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA), pleaded guilty today for his role in an international money laundering scheme involving bribes paid by the owners of U.S.-based companies to Venezuelan government officials to corruptly secure energy contracts and payment priority on outstanding invoices.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas and Special Agent in Charge Mark Dawson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Houston Field Office made the announcement.
Cesar David Rincon Godoy (Cesar Rincon), 50, a citizen of Venezuela previously residing in Spain, pleaded guilty today in federal court in Houston to one count of conspiracy to commit money laundering. U.S. District Judge Kenneth M. Hoyt of the Southern District of Texas accepted Cesar Rincon’s plea and imposed a personal money judgment in the amount of $7,033,504.71 against the defendant, who agreed to the entry of an order of forfeiture. Sentencing is scheduled for July 9.
Cesar Rincon was arrested in Spain in October 2017 and subsequently extradited to the United States after a federal grand jury in the Southern District of Texas returned a 20-count indictment against him and Luis Carlos De Leon Perez (De Leon), 41; Nervis Gerardo Villalobos Cardenas (Villalobos), 50; Alejandro Isturiz Chiesa (Isturiz), 33; and Rafael Ernesto Reiter Munoz (Reiter), 39. According to admissions made in connection with Cesar Rincon’s plea, between January 2012 and June 2013, he conspired with De Leon, Villalobos, Isturiz, Reiter and others, all of whom were then-current officials of PDVSA and its subsidiaries or former officials of other Venezuelan government agencies or instrumentalities, to solicit PDVSA vendors for bribes and kickbacks in exchange for providing assistance to those vendors in connection with their PDVSA business. Specifically, Cesar Rincon admitted that he accepted bribes from Roberto Enrique Rincon Fernandez (Roberto Rincon), 57, of The Woodlands, Texas, and Abraham Jose Shiera Bastidas (Shiera), 54, of Coral Gables, Florida, in exchange for taking official acts in his capacity as general manager of PDVSA’s procurement subsidiary in order to assist Roberto Rincon’s and Shiera’s companies, including their U.S.-based companies, in receiving payment priority and receiving additional PDVSA contracts. Cesar Rincon further admitted that he then conspired with Roberto Rincon and Shiera to launder and conceal the proceeds of the bribery scheme through a series of financial transactions, including wire transfers to accounts in the United States and Switzerland held in the names of individuals or entities other than Cesar Rincon. Both Roberto Rincon and Shiera previously pleaded guilty in the Southern District of Texas to charges under the Foreign Corrupt Practices Act (FCPA) for their respective roles in the bribery scheme. They currently await sentencing.
As part of his plea agreement, Cesar Rincon also admitted to soliciting and receiving bribes from other owners of energy companies based in the United States in exchange for his assistance in helping those individuals and their companies win business with PDVSA and obtain payment from PDVSA on outstanding invoices ahead of other PDVSA vendors. In total, Cesar Rincon admitted to conspiring with others to launder at least $7,033,504.71 in proceeds from the various bribery schemes in which he participated.
The charges against De Leon, Villalobos, Isturiz and Reiter remain pending. Each of the four remaining defendants is charged with one count of conspiracy to commit money laundering and with one or more counts of money laundering. De Leon and Villalobos are also each charged with one count of conspiracy to violate the FCPA. De Leon was extradited from Spain on March 9, and was ordered detained pending trial following a detention hearing held on April 10, before U.S. Magistrate Judge Frances H. Stacy of the Southern District of Texas. Villalobos and Reiter remain in Spanish custody pending extradition and Isturiz remains at large.
The charges contained in the indictment are merely accusations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Cesar Rincon becomes the latest individual to plead guilty as part of a larger, ongoing investigation by the U.S. government into bribery at PDVSA. Including Cesar Rincon, Roberto Rincon, and Shiera, the Justice Department has announced the guilty pleas of a total of 11individuals in connection with the investigation.
ICE-HSI in Houston is conducting the ongoing investigation with assistance from ICE-HSI in Boston and Madrid, as well as from IRS Criminal Investigation. Trial Attorneys Jeremy R. Sanders, Sarah E. Edwards and John-Alex Romano of the Criminal Division’s Fraud Section and Deputy Chief John Pearson and Assistant U.S. Attorney Robert S. Johnson of the Southern District of Texas are prosecuting the case. Assistant U.S. Attorney Kristine Rollinson of the Southern District of Texas is handling the forfeiture aspects of the case.
The Criminal Division’s Office of International Affairs, the Swiss Federal Office of Justice and the Spanish Guardia Civil have provided substantial assistance.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.