Two Businessman Charged with Foreign Bribery in Connection with Venezuela Bribery Scheme
HOUSTON - A former sales representative and the president of a U.S.-based company surrendered to federal authorities yesterday for their alleged roles in a scheme to corruptly secure business advantages from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A. (PDVSA). These business advantages included contract awards and payment on past due invoices.
U.S. Attorney Ryan K. Patrick, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Mark Dawson of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) made the announcement.
Rafael Enrique Pinto Franceschi (Pinto), 40, of Miami, Florida, and Franz Herman Muller Huber (Muller), 68, of Weston, Florida, were arrested in Miami on arrest warrants based on a five-count indictment returned in the Southern District of Texas (SDTX) on Feb. 21, and unsealed today. Pinto and Muller made their initial appearances today before U.S. Magistrate Judge Jonathan Goodman of the Southern District of Florida. Pinto and Muller are each charged with one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA), one count of conspiracy to commit wire fraud, two counts of wire fraud and one count of conspiracy to launder money.
According to the indictment, Pinto was a sales representative for a Miami-based PDVSA supplier (“Company A” in the indictment), while Muller was Company A’s president. The indictment alleges that beginning in or around 2009 and continuing through at least 2013, Pinto and Muller conspired with others to bribe three PDVSA officials in exchange for providing assistance in connection with Company A’s PDVSA business. In exchange for bribe payments, the PDVSA officials allegedly assisted Company A in obtaining additional PDVSA contracts, inside information and payment on past due invoices. The indictment alleges that when Company A received a payment from PDVSA, Pinto would alert one of the PDVSA officials who would, in turn, create a fictitious invoice from a Panamanian shell company. The invoices charged Company A three percent of whatever payment Company A had received from PDVSA and directed Company A to send payment to a Swiss bank account. According to the charges, the false invoice would be sent to Muller, who would ensure that the invoices were paid.
The wire fraud charges against Pinto and Muller are based on allegations that, in addition to bribing the three PDVSA officials, Pinto and Muller received kickbacks in connection with the scheme. In total, Pinto is alleged to have received more than $985,000 in kickback payments and Muller over $258,000.
Two of the three officials that Pinto and Muller are accused of bribing – Jose Camacho and Ivan Guedez, both of Houston - have already pleaded guilty in connection with the case and are pending sentencing.
With the unsealing of the indictment today, the Justice Department has announced charges against 21 individuals, 15 of whom have pleaded guilty, as part of a larger, ongoing U.S. government investigation into bribery at PDVSA. HSI Houston is conducting the ongoing investigation with assistance from HSI Boston and Miami. SDTX Assistant U.S. Attorneys (AUSA) John P. Pearson and Robert S. Johnson and Trial Attorneys Sarah E. Edwards and Sonali D. Patel of the Criminal Division’s Fraud Section are prosecuting the case. AUSA Kristine Rollison of the SDTX is handling the forfeiture aspects of the case.
The Criminal Division’s Office of International Affairs, the Swiss Federal Office of Justice, Cayman Mutual Legal Assistance Authority and Cayman Office of the Director of Public Prosecution also provided assistance.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.