Bribes Went to Venezuelan|Bank Officer, Uncle Sam Says

MANHATTAN (CN) - Millions of dollars in bribes to a Venezuelan development bank officer greased the wheels for a U.S.-registered broker-dealer trading in bonds and foreign sovereign debt, federal prosecutors say in a nine-count indictment.

The U.S. attorney accuses Tomas Alberto Clarke Bethancourt, Jose Alejandro Hurtado, and Maria De Los Angeles Gonzalez De Hernandez of conspiracy, money laundering and violations of the Foreign Corrupt Practice Act and the Travel Act.

They are accused of paying and/or receiving bribes from an unidentified SEC-registered broker-dealer to the Banco de Desarrollo Económico y Social de Venezuela (BANDES), a state-owned bank. (Venezuelan Bank of Economic and Social Development.)

A parallel SEC complaint identifies the U.S. broker-dealer as Direct Access Partners (DAP).

The SEC said in a statement: "DAP Global generated more than $66 million in revenue for DAP from transaction fees - in the form of markups and markdowns - on riskless principal trade executions in Venezuelan sovereign or state-sponsored bonds for Banco de Desarrollo Económico y Social de Venezuela (BANDES). A portion of this revenue was illicitly paid to BANDES Vice President of Finance, María de los Ángeles González de Hernandez, who authorized the fraudulent trades."

The bribes and kickbacks were a scheme of the U.S. broker-dealer's Global Markets Group, according to the criminal indictment. DAP bought and sold foreign sovereign debt and made money on the markup - charging customers more than it paid for the debt - and the markdown - giving customers less money than it got from selling the debt.

Defendant Gonzales is accused of taking $3.6 million in bribes "through insiders and affiliates of the [U.S.] broker-dealer," according to the federal indictment.

One bribe, disguised as commissions, was for $509,250, according to the complaint.

Defendant Clarke Bethancourt was a senior vice president in the unidentified U.S. broker-dealer, which has offices in New York City and Miami.

Hurtado worked for the Miami broker-dealer. He is accused of wiring the $509,250, on orders from Clarke.

In other transactions, Clarke is accused of wiring $1.6 million to Swiss accounts owned jointly by Gonzalez and an unidentified Associate 1.

Hurtado and his wife are accused of taking "millions of dollars from the broker-dealer's markups and markdowns, in connection with the securities it bought and sold to BANDES. Hurtado, in turn, conveyed a portion of those funds back to Maria Gonzalez, the defendant. Also as part of this scheme, millions of dollars from BANDES-related markups and markdowns were sent from the broker-dealer to a foreign entity controlled by Clarke, with a portion of these funds being further transferred to an entity controlled by Gonzalez and Associate 1."

In a second complaint, the United States seeks forfeiture of assets allegedly derived from the scheme: Cartagena International Inc., ETC Investment SA; H.A.S. Investment Group SA; Castilla Holdings SA; and Hyseven SA.

SA (Sociedad Anónima - Anonymous Society) is the Latin American equivalent of a U.S. corporation. They are also known as SA de CV - Sociedad Anónima de Capital Variable.

In Latin America, people are known by the first of their two last names. The first last name is the patronymic, the second the matronymic. The matronymic name is used only in formal situations - such as lawsuits.

The SEC filed a parallel complaint against these defendants, in the same court: Tomas Alberto Clarke Bethancourt; Luri Rodolfo Bethancourt, Jose Alejandro Hurtado, and Haydee Leticia Pabon. The SEC's regional director in New York called the scheme "a fraud that was staggering in audacity and scope."

The SEC identified the players this way in its statement:

"Tomas Alberto Clarke Bethancourt, who lives in Miami and is an executive vice president at DAP. Known as 'Tomas Clarke,' he was responsible for executing the fraudulent trades and maintaining spreadsheets tracking the illicit markups and markdowns on those trades.

"Iuri Rodolfo Bethancourt, who lives in Panama and received more than $20 million in fraudulent proceeds from DAP via his Panamanian shell company, which then paid Gonzalez a portion of this amount.

"Jose Alejandro Hurtado, who lives in Miami and served as the intermediary between DAP and Gonzalez. Hurtado was paid more than $6 million in kickbacks disguised as salary payments from DAP, and he remitted some of that money to Gonzalez.

"Haydee Leticia Pabon, who is Hurtado's wife and received approximately $8 million in markups or markdowns on BANDES trades that were funneled to her from DAP in the form of sham finders' fees."

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