#SeanPenndejo and Chapos running countries

2016 came with good News (capitalised for relevance). One that caught the world’s attention was the recapture of El Chapo Guzman. Another that generated tons of commentary and reactions was #SeanPenndejo meeting with El Chapo. In a delicious turn of events, it is being claimed that Penn’s Tequila-drinking soireé with El Chapo actually cost the drug lord his freedom. How sweet. This reminds of Raul Reyes’ location having been revealed -which led to his death- after talking to Hugo Chavez via satellite link.

Sean “7-hours” Penn is no stranger to controversy. His forays into Latin American issues are inversely proportional to his acting prowess. He belongs to that rare breed of America-loathing Americans that owe every success they’ve had to America. Only because of his success in America, Penn has talked to Hugo Chavez for 7 hours; he has sipped wine with Raul Castro for 7 hours; he “interviewed” El Chapo for 7 hours, after travelling thru “dense, mountainous jungle in a two-truck convoy, crossing through river after river for seven long hours…” Oh, and he repeats with raging gusto, like the amazing actor he is, every anti imperialist script put out there by the enemies of democracy and rule of law, and, indeed, by ruthless assassins he’s infatuated with. Communism in Cuba? An utterly corrupt and absolutely dysfuntional regime in Venezuela? Thousands of assassinations and drug trafficking in Mexico? “That’ll be America’s doing” Penn thinks, while farting, or suddenly feeling fond of his dick.

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Emili Blasco, from ABC in Spain, claims that Penn’s get together with El Chapo started to be arranged in Venezuela, in October 2015, by intermediation of one of El Chapo’s sons. OFAC-designated Kingpin, Hugo Carvajal, allegedly provided protection. Carvajal, a high figure of Venezuela’s chavista regime, stands accused of coordinating “transportation of approximately 5,600 kilograms of cocaine from Venezuela to Mexico.” Who was the recipient of that shipment, if not El Chapo’s Cartel de Sinaloa?

Venezuela has become a playground for drug traffickers. Not only has the country been turned into a “global cocaine hub” and launchpad for most of the cocaine produced in the Andean region, but, alarmingly, drug lords effectively control the State. Diosdado Cabello, by all accounts Venezuela’s second-in-command, is widely believed to be the boss of Cartel de los Soles. Direct relatives of Venezuela’s First Lady (Cilia Flores) have also been charged for drug trafficking. This means that both branches of chavismo -military led by Cabello and civilian led by President Nicolas Maduro- are implicated.

When Carvajal was arrested by DEA agents in Aruba in July 2014, the highest Venezuelan officials sprang into action to avoid Carvajal’s extradition to the U.S. When Cilia Flores’s godson and nephew were arrested in Haiti, Petroleos de Venezuela’s American lawyers from Squire Patton Boggs were sent -until it became imposible to explain its involvement and, more importantly, justify use of Venezuelan public funds to pay for such involvement.

These facts will never appear in Penn’s motorcycle diaries though. His world view is as Hollywood-esque as they get. Big bad Uncle Sam wrecks havoc on poor and progressive Banana Republics south of the border, whose citizens have no say, no responsibility whatsoever, on issues that affect their nations. So Mexico has two presidents, according to Penn: the democratically elected one, and El Chapo. Cuba’s “revolution for the people”, otherwise known as the continent’s longest dictatorship, spanning five decades of misery without a single democratic election, an untold amount of human rights violations, and absolute lack of freedom, is not the product of Fidel Castro’s derangement, but a consequence of U.S. foreign policy. Only yesterday, Venezuela’s Supreme Court -on Cabello’s and Maduro’s orders- basically voided any and all legislation coming from a new Congress controlled by the opposition, but that’s not to do with kingpins running the show, no. It’s all to do with folks calling chavismo a dictatorship.

Penn-like “journalism” is a species endemic to Hollywood, State media, and corrupt ecosystems. While he keeps feeding his gargantuan ego with cavalier tales –Robert Young Pelton would be proud– millions of people live subjugated and victimised by his idols. Chapos run countries, misusing State resources without a shred of accountability to advance criminal interests. Penn’s detachment allows for romantic views of reality. His willingness to “suspend judgement” seems the regular travelling companion. In those infamous, 7-hour tours, to chavistas, castristas, and narcoterroristas Potemkin villages, which end up without fail with narratives lacking the most basic grasp of facts, Penn exhibits an almost psychopathic absence of empathy towards the real victims. For who, in a sane state of mind, would at this point dare apologise for Chavez, the Castros, or El Chapo Guzman?

Mal empezamos Henry…

Debo, en primer lugar, expresar mi grata sorpresa por tu reconocimiento público Henry. No todos los días se encuentra uno nombrado, explícitamente, por el flamante Presidente de la Asamblea Nacional de Venezuela.

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Me parece fantástico que, finalmente, te hayas dignado responder a mis señalamientos, que nunca fueron mas allá de exponer tus relaciones familiares. Mi lucha no es un “problema entre empresarios y comerciantes” (otro argumento Derwick), sino un intento de elevar el costo social de la corrupción, de exponer a los corruptos como lo que son: impresentables, el cáncer que mantiene a miles de millones de personas en el subdesarrollo. Cuando decidiste hacerte eco de acusaciones, carentes de toda veracidad, vertidas en mi contra por los socios de tu cuñado, abriste un flanco que te será difícil cerrar. Me permitiré explicarte el motivo.

La historia reciente me permite concluir que tu ataque no fue gratuito. Sucedió exactamente dos semanas después de que mi apartamento en Londres fuera asaltado por tres hampones. En principio pensé que el objetivo era robarme las computadoras, para descubrir mis fuentes, pero eventos posteriores sugieren otro móvil, más siniestro: aterrorizarme con amenazas de abusar sexualmente a mis hijas. Al asalto le siguió -exactamente una semana después- la publicación, en páginas anónimas, y otras relacionadas con Derwick Associates y el régimen chavista, de una serie de alegatos infundados, como por ejemplo, que mi madre, fallecida en octubre de 1983 en Donosti, comandaba en el 2006 en o desde Venezuela, con mi colaboración, una banda de narcomulas. Lo más grave: de allí nutriste tu ataque en mi contra.

No voy a entretenerte con un listado de todas las cosas que se han dicho, y se dicen, de mi persona. Pero si te voy a llamar a capítulo nuevamente, por cuanto tus palabras, las que tú escogiste usar en tu “impecable castellano”, ese que dominas con “cuidado y precisión”, fueron poco más que una reiteración textual de argumentos que existen solamente en el mundillo de Derwick Associates, y otros hampones de similar calaña. Todos ellos, me enorgullece agregar, sujetos a todo tipo de investigaciones internacionales por la comisión, real que no inventada, de delitos como apropiación indebida, blanqueo de capitales, asociación para delinquir, corrupción, narcotráfico, y un largo etcétera. Me imagino habrás escuchado sobre Roberto Rincón, Abraham Shiera, Nervis Villalobos, los narcosobrinos… así que no redundaré en el asunto.

Pero tu artículo Henry, “Laboratorio sucio“, ése es de tu sola autoría, no es cierto? Te despachaste a gusto: como decimos en criollo, me “diste hasta con el tobo.” Nadie te obligó, ni te forzó a publicar semejante esperpento, así como nadie te obligó ayer a afirmar, por ejemplo, que tu suegro, Franco D’Agostino, dizque “no ha trabajado para el Estado desde el gobierno de Jaime Lusichi, cuando ejecutó la represa de Tirimiquire (Sucre)”.

dayco-pdvsa

Sabes cuánto me tomó descubrir que esa aseveración sobre tu suegro también es mentira Henry? Lo que uno se tarda en escribir DAYCO PDVSA en Google. Ponte al día Henry. Deja de abrir flancos. Una de las empresas de tu suegro, Dayco Construcciones, es contratista de PDVSA. Del 2007 te hablo Henry. Del 2010. No de tiempos de Lusinchi. Si no me crees, visita la pagina web del Registro Nacional de Contratistas, o si prefieres el portal de la propia empresa.

De hecho, hasta información de un pleito legal encontré, entre tu cuñado, tu esposa, y otros hermanos D’Agostino contra el patriarca Franco. Así lo cita el Tribunal Supremo de Justicia:

…demanda de simulación de la venta de todas las acciones de la sociedad C.A. Dayco Construcciones que hizo el padre de los demandantes Franco D’Agostino en su carácter de representante y único accionista de Dayco Holding Corp. (sociedad que a su vez era la única accionista de C.A. Dayco Construcciones), a Luis Alberto D’agostino -hermano de los demandantes- y la posterior venta que este último hiciera a la sociedad panameña Petrodayco LTD, en la que, presumen los demandantes, su hermano es el único accionista.

Cómo se te puede tomar en serio Henry? De mayo del 2012 es la demanda. Asumo entonces que tu esposa era, hasta mayo del 2012, accionista de una empresa familiar que ha recibido contratos del régimen chavista. Qué me vas a decir, que tampoco sabías de eso?

De nada sirve que asumas posturas y esgrimas argumentos dizque aclaratorios, cuando los mismos se tornan en tu contra. Ahora eres el Presidente de la nueva Asamblea Nacional de un país Henry. Abandona el rol de secretario vitalicio de un partido venido a menos y asume con entereza tu nueva responsabilidad. Acuérdate del dicho “no basta que la mujer del César sea honesta; también tiene que parecerlo.”

Estoy a la orden Henry, para cualquier aclaratoria que necesites. Mi peo no es contigo, sino con los corruptos en tu derredor, y si alguna vez necesitas ayuda para exponerles, para adecentar la cosa pública, o para colaborar con investigaciones tendientes a recuperar todo el dinero que estos individuos le han robado a Venezuela, no dudes en llamarme.

Cuba confirma que EEUU sigue dictando pauta en América latina

La administración del Presidente Barack Obama sorprendió al mundo hace unos dias, con el anuncio del restablecimiento de relaciones con Cuba. El embargo, condenado reiterada y casi unánimemente por prácticamente la totalidad de los sectores progresistas del mundo, ha sido sin lugar a dudas un fracaso. Creado con la intención de aislar al régimen cubano logró precisamente lo contrario: aglutinar la opinión mundial a favor de Cuba, cuyo gobierno no tiene un ápice de democrático. A pesar de contar con un récord atroz de violaciones a los derechos humanos, y de gobernar de forma dictatorial por más de 50 años, Fidel Castro, y su heredero Raul, lograron venderle al mundo una imagen de víctimas, en lugar de victimarios. En cualquier caso, el anuncio de la Casa Blanca es, probablemente, la mejor noticia del año.

En el 2008 viajé dos veces a La Habana. El propósito de las visitas fue, básicamente, lo que le costó a Alan Gross cinco años de presidio, es decir, llevarle a los disidentes cubanos computadoras portátiles, memorias USB, móviles, medicinas e información “contrarrevolucionaria”, lease literatura sobre derechos humanos. Afortunadamente, no fui arrestado, mas una vez en la isla me tomó segundos percibir el fracaso del embargo. El régimen castrista ha sido muy hábil en la explotación de su papel de víctima: para el mundo exterior la política ha sido asumir el rol de David, frente a un todopoderoso Goliat que no es santo de devoción en el mundo, si se considera la cantidad de votos de apoyo a Cuba en el seno de las Naciones Unidas cada vez que se presenta el caso. A lo interior, los Castro han usado el embargo como una suerte de talismán: todos los problemas de Cuba son culpa del embargo, desde la tos, hasta los huracanes, pasando por el desempleo, los salarios paupérrimos, la imposibilidad de usar internet, el discriminatorio sistema dual de moneda, la falta de libertades… ¿Que no hay maquinas de diálisis, o sillas de ruedas? ¿Que no hay suficientes guaguas? ¿Que la oposición no tiene representación política en Cuba? Bola asere, ¿que te dejó la novia? El embargo…

Al tiempo que Cuba lleva décadas denunciando el “imperialismo yanqui” y su capitalismo salvaje, alentando y apoyando cuanta nación que adopte discursos similares, o tutelando, como en el caso de Venezuela, posturas dizque anti-imperialistas, ha quedado demostrado que todo aquel discurso no era sino cháchara, por cuanto Cuba abandonó su histriónico e histórico resentimiento en el preciso instante que la administración de Obama le hizo el primer guiño. Igualmente sorprendente el anuncio de alto el fuego indefinido de las FARC, en negociaciones de paz con el gobierno colombiano que se llevan a cabo en Cuba.

Para la historia quedaron décadas de discursos fatuos, cargados de argumentos anti sistema. ¿Será la reciente debacle de la revolución chavista, principal sostén económico del régimen castrista, lo que movió a los Castro a buscar entenderse con los EEUU desde principios de 2012, como informa un editorial del diario El País? Ya en esa fecha los Castro sabían, mejor que nadie, cuál era el cuadro médico de su benefactor, amén de manejar quizás la mejor información del caótico e ingobernable estado venezolano. Para ponerlo más claro, en espacio de dos días el chavismo parece haber sido traicionado por su mas importante aliado en el mundo (Cuba), y por sus socios de las guerrillas narcoterroristas de las FARC.

Pero el entente deja una serie de interrogantes, entre las cuales cabe destacar, ¿dónde queda el “hasta la victoria siempre”? ¿Dónde queda el nihilismo del “patria o muerte”? Después de más de cinco décadas de políticas que han llevado a la ruina a una nación que figuraba entre las más avanzadas de la región, ¿no representa el anuncio de la semana pasada la más clara admisión de lo errado de dichas políticas? ¿Qué decir de las alianzas con naciones igualmente fracasadas, como Venezuela, en intentos de dizque  contrarrestar el poder del gigante del norte y su imperialismo? ¿Cómo queda Nicolás Maduro en todo esto, y la cosmovisión y “multipolaridad” chavista? “Se perdieron esos reales”, dirían mis coterráneos.

Sea del agrado de Cuba, sus protectorados y simpatizantes, o no, el realpolitik termina siempre imponiéndose a la retórica. Gracias Fidel y Raul Castro por demostrar de forma tan diáfana que EEUU sigue dictando pauta en América latina, pues bastó una oferta de restablecimiento de relaciones, y los consiguientes réditos económicos que dicha medida aportará, para echar por tierra medio siglo de experimentos que no cuentan con un solo ejemplo exitoso en el planeta. Una vez que el capital internacional arribe a Cuba sin impedimentos o penas asociadas al embargo, ya se encargará el capitalismo de hacer el resto y devolverle la libertad a los cubanos.

Kazakhstan’s dictator Nursultan Nazarbayev & Italy engage in extraordinary rendition

Nursultan Nazarbayev and Silvio “bunga-bunga” Berlusconi.

Europe seems to be going downhill very fast indeed. Vladimir Putin’s having his critics killed in Central London is not a one of, isolated event. Now we see how Kazakhstan’s dictator, Nursultan Nazarbayev, gets Italy’s Minister of the InteriorMinister of JusticeMinister of Foreign Affairs, and police’s special forces chief and commandos violate every pertinent law and due process, by summarily kidnaping and deporting from Rome relatives of his critics. This event, in the capital city of a European country let’s not forget, should be a scandal of monumental proportions, shouldn’t it?

Let me provide some context. Despite indefensible whitewashing from Tony Blair et al, Nursultan Nazarbayev is a proper dictator, no two ways about it. Nazerbayev has imposed his rule in Kazakhstan since 1991 and controls the country as his personal fiefdom. Kazakhstan is yet to see its first free, fair and democratic election. Human, civil and political rights are simply nonexistent. But many Western nations, companies and former political leaders are doing phenomenal business deals with Nazerbayev, who is “absolutely justifiably loved by his nation”, according to Silvio “bunga-bunga” Berlusconi. Nazarbayev’s connivance has allowed, in true Russian style, the emergence of an oligarchy: a handful of relatives, appointees, confidants and collaborators have become obscenely wealthy over the years. So there’s Timur Kulibayev, Vladimir Kim, Alidzhan Ibragimov, Bolat Utemuratov, Rashid Sarsenov, Rakhat Aliyev… all of whom owe their ill gotten fortunes personally to the khan. And then, there’s Mukhtar Ablyazov, a once trusted minister of Nazerbayev accused of embezzling billions from Kazakhstan’s BTA bank. So far so Kazakh.

But Ablyazov, as other Kazakh “entrepreneurs”, fell from Nazarbayev’s grace for whatever reason, and fled to the UK, where he requested political asylum. In all frankness, I have no sympathy for “businessmen” that go from selling bits and bobs in market stalls to multibillionaires in a few years. Fortunes of the magnitude of some of these oligarchs can not possibly be made in the real world without complicity, or partnership, of utterly corrupt government officials that give them control of valuable State assets for peanuts, or worse, on credit. So whatever happens to Ablyazov, who, stupidly, fled the country that risked it for him, is neither here nor there.

However, what happened to his wife and 6 year-old daughter in Italy is an entirely different issue. The wife, Alma Shalabayeva, was living in Rome. Legally, on a Schengen permit obtained as citizen of Kazakhstan. Ditto the 6 year-old daughter, Alua Ablyazova. That did not stop 50 heavily armed operatives from DIGOS (Italy’s special forces) to storm the house where she was staying at after midnight last Wednesday 29. She was arrested without a warrant. Her crime? Well, this is where things get interesting.

Shalabayeva’s lawyer, Riccardo Olivo, claims that she committed no crime in Italy, she was not wanted in connection to any crime in Italy, nor was there an international warrant on her. Shalabayeva’s was arrested for being in Italy with a fake Central African Republic passport. That was allegedly her “crime”. But her lawyer claims that Central African Republic Embassy officials confirmed that the passport was legitimate. So the 50 operatives from Kazakhstan’s Italy’s special forces -note special forces; no immigration, customs or regular police- took Shalabayeva  away to Centro di Identificazione ed Espulsione -Identification and Deportation Centre– on the basis of a deportation orderFrom there she was to be immediately deported to Kazakhstan, where she has committed no crime either.

Such expedite and efficient process, this being Italy, is completely abnormal. There’s an estimated 440,000 illegal immigrants in Italy. How many of those are the target of sting DIGOS operations? Why were Ablyazov’s wife and daughter singled out? Further, how many of the “7,944 irregular immigrants detained in 2012” were arrested by DIGOS and had chartered private jets waiting at the ready in Ciampino airport? But this being Italy, those involved in sending Ablyazov’s wife to Nazarbayev missed the daughter, and the law prohibits deportation of the mother without the daughter. So back they were sent by their Kazakh handlers to the villa from where Shalabayeva was snatched, to arrest her 6 year-old daughter, who once reunited with her mother onboard the jet was sent to modern day Genghis Khan two days later, on Friday.

«MACCHINA INFERNALE» otherwise known as extraordinary rendition

Thus describes lawyer Olivo the operation:

«Sono personalmente intervenuto – prosegue l’avvocato – sui vertici della Procura di Roma per informarli. Il Pm Eugenio Albamonte e il procuratore aggiunto Nello Rossi attraverso anche l’intervento del Procuratore capo Pignatone, sono riusciti a bloccare questa macchina infernale. Ma poi deve essere successo qualcosa, la pressione era troppa e la macchina infernale ha ripreso la sua corsa. Alle 18,30 mamma e figlia decollavano da Ciampino dirette nel loro Paese. Dal punto di vista formale è probabile che tutto sia stato fatto in regola. Da un punto di vista sostanziale hanno dato una donna nelle mani del boia di suo marito. Ed è una cosa raccapricciante, di straordinaria gravità».

Olivo claims to have reached out to relevant authorities from Rome’s Attorney’s Office (Prosecutor Eugenio Albamonte, deputy prosecutor Nello Rossi and Chief Prosecutor Pignatone), who were able to block the «MACCHINA INFERNALE» otherwise known as extraordinary rendition, but pressure from above (?) prevailed, and so mother and daughter were sent to Kazakhstan, in clear violation to current Italian immigration law that establish that no one can be deported to a country where they can be subjected to persecution, violation to human rights, etc.

Rendition aircraft used owned by Austria’s Avcon Jet AG

Olivo makes important questions, such as: “who owned the plane? Who chartered and paid for it?” The plane (OE-HOO) used for this extraordinary rendition belongs to Avcon Jet, an Austrian company that has on its board former Austrian Minister of Finance Andreas Staribacher. The true owners of Avcon seem to have gone the extra mile in having the identities of its majority shareholders hidden behind proxies. Austrian press reports claim that “Borat agents” are behind this “cloak and dager” operation, which ended up with Ablyazov’s wife and daughter being placed under house arrest in Kazakhstan. Indeed, this is no laughing matter, as Kazakhstan’s KNB intelligence operatives not only are allowed to operate freely in Italy, and in Austria where their intelligence European central command seems to be based, but all Italian authorities involved are effectively acting as Nazerbayev’s black ops.

In light of all this, it is worth asking: who benefits where? ENI, the Italian energy conglomerate in which the Italian state has a 30% stake, has no small amount of business with Nazerbayev. In fact, ENI seems very comfortable dealing with Kazakh thugs, paying bribes to Nazarbayev’s son in law to get concessions. It wouldn’t be a stretch to suggest that shipping Ablyazov’s family as a payback of sorts is out of the question, would it? But what to say of due process in Italy? What of its debased and corrupt ministers and special forces? How can thuggish communist dictators and its intelligence services operate so brazenly? How can Italian officials violate current laws, persecute and endanger innocent people, and children, with such impunity?

PEPwatch Venezuela: Beware Of Government-Controlled Private Corporations 2

03.02.06 | We continue our series on how compliance officers can ascertain whether a private company seeking to become a bank client is indeed a government-controlled corporation that is a politically-exposed organisation requiring enhanced due diligence and heightened Source of Funds analysis. Our previous article detailed how agovernment-controlled company may have special access to financing, or even grants, how its officers and directors may be fronting for its real ownership , and how its ability to obtain public funds without accountability may make it a high-risk, or even unacceptable, client. Today we examine a more dangerous variety of government-controlled company: where its ownership is but a portion of the total shares of stock. While identifying nominee owners of 100% of a company as fronts for government beneficial owners, record holders of minority interests are often overlooked, or disregarded entirely in due diligence investigations.

Recognise that the laundrymen know your policies.

As a compliance officer, I was instructed by bank counsel to ignore owners of less than 20% of a company. I later ascertained that potential clients were routinely advised to set company ownership at exactly 19%. Their agents obviously knew where our enquiry threshold was , so we quickly abolished the arbitrary benchmark , and checked out anyone whose holdings were just under the formerly used figure. Why is it difficult to recognise companies where government ownership is less than a controlling interest ? Let’s examine the general corporate landscape where a quiet transfer of partial ownership has occurred:

– Officers and directors generally are unchanged; however, there may be direction from behind the scenes, reducing the officers to figurehead status.

– The company, previously known as private and closely-held, has no legal obligation to disclose its new situation. Indeed, corporate records are usually only available to shareholders.

– Certain benefits may inure to the company by virtue of the new owner that it does not want the commercial world to know about. ( e.g. contracts, new business, new raw materials and/or facilities made available.)

Why be concerned ?

Over and above the obvious, there are clear and important potential dangers when a financial institution handles a government-controlled company where the private and public sector share ownership. Some important things to be aware of:

– Covert governmental aims and goals, whether diplomatic or economic, may cause serious reputational damage to your bank when publicly disclosed in the media.

– The company may be immune from civil, or even criminal action, by virtue of its hidden governmental control. Can you be the banker for organised misconduct, or criminal elements ? Obviously, no.

– Intelligence or espionage activities may be conducted, either domestically or abroad, by agents using the company for these operations. The linkage of such ‘dirty tricks’ as the Watergate break-in, or the Nugan Hand scandal, can be fatal to the existence of a financial institution.

– Goverment-sponsored money laundering may be part of the company’s operations.

A frightening case study.

An illustrative company should help explain the nature of the beast, and why it could be compliance suicide to knowingly allow a government-controlled corporation to bank with you. Last week the world’s largest corn flour and tortilla manufacturer, Mexican agrarian giant, Grupo Maseca, also called GRUMA, announced that it was selling a 40% share of one of its Venezuelan subsidiaries, known as Molinos Nacionales, CA, to Ricardo Fernandez Barrueco, for $65.6m. But do the Mexicans really know who they are doing business with ? Readers who absorbed the first installment of this series will recall that Sr. Fernandez Barrueco emerged from penury and obscurity to become a major owner of Venezuelan companies closely aligned with the immediate family of Venezuelan President Hugo Chavez Frias. Fernandez has such power that his “friends” in government and the military succeeded in quashing a major law enforcement investigation into his suspected smuggling operations.

More suspect comrades.

We have already covered Fernandez’ “colourful” background, and his shady associates, but perhaps it is best to mention two additional individuals who are his frequent traveling partners on his Bell 206 Ranger helicopters. They are the radical Lebanese brothers Khaled Khalil Majzoub, born 26 August 1965, Cedula 6290182, and Majed Khalil Majzoub, born 23 April, 1970, Cedula 13526338.

Believed to have improperly transferred prohibited advanced technology from the US to Venezuelan government agencies using a Miami company called Hardwell Computer, Inc., their US visas were revoked in 2004. The Khalils appear to be the preferred contractors of the Venezuelan armed forces, and are allegedly linked to Venezuelans involved in laundering money siphoned off from public contracts and from other illicit activities. Like Fernandez, their companies appear to be involved in tax evasion and customs schemes. Fernandez and the Khalils are linked to the same customs agency, TMB Aduanas.

Financial pirates looting funds at public expense.

Fernandez is also considered to be a member of the New Bolivarian Elite, the Venezuelan inner circle, all of whom, by the way, clearly rate PEP status due to their ready access to billions of dollars of Venezuelan oil revenues diverted by Chavez from the public treasury, and used to promote his radical political agenda in Latin America. Rotch Energy Holdings, the Fernandez company that controls the other half of DAMASECA, GRUMA’s other subsidiary, is a registered PDVSA broker. Energy brokers purchasing petroleum products from Venezuela are regularly forced by PDVSA to send a large portion of their commissions to powerful Venezuelan PEPs, often in tax haven countries. Would you like to see a client of your bank named as a funding source of criminal organisations ? The bank would surely run afoul of US anti-terrorism financing laws, or worse, in today’s strict regulatory enforcement climate.

Is Fernandez the worldwide laundryman for Chavez?

The is an additional, more dangerous, red flag: Fernandez’ businesses, which are strictly agrarian, and are domestic in focus, cannot be reconciled with his dozens of personal overseas bank accounts, many of which are in the unreformed active tax havens of the Caribbean and Europe. A partial list impresses even this old veteran of the “ banking republics. “

Compliance officers note well how he has accounts at both the London offices as well as the tax haven branches of some of the world’s largest international banks, including Barclay’s . Such inter-branch transfers rarely incur enhanced due diligence, as the receiving compliance staff assume the client’s transaction has already been vetted. Such multiple accounts at many branches of the same bank allows virtually foolproof layering enroute to a final destination, as investigators rarely would be allowed access to internal transfer information between branches that have bank secrecy laws in effect.

Do you really want to be moving suspect funds for a company with a hidden, governmental agenda, run by the right-hand man of the family of the president of Venezuela , and whom may be a master laundryman ? That’s just one risk one takes when banking government-controlled companies. As the foregoing aptly demonstrates. Getting involved with clients who may be a government-controlled company is not just a PEP problem, it may indeed result in a financial infection from which your bank may not recover, They should only be allowed under strictly controlled and monitored circumstances, and if a link to hidden government ownership is shown regarding a present client, steps should be taken to terminate the relationship.

PEPwatch Venezuela: Beware Of Government-Controlled Private Corporations 3

Originally published 03.02.06 | We have previously discussed the threats posed by private corporations owned by individuals who front for governments or national leaders, and by the dangers of governmental minority ownership of closely-held companies. In this, our final segment, we cover the private corporation that operates as a de facto government agency, and whose primary activities aid in the implementation of government policy, but in whom both legal and equitable ownership is privately held.

Skim milk masquerades as cream.

Where it suits national policy, private corporations are convenient and anonymous instruments that can perform commercial acts deemed necessary by government. In the intelligence field, such controlled companies are frequently known as proprietaries. They often perform covert or illegal operations, such as money laundering, where the government does not care to be linked to either the activities, or their consequences. Such companies also are utilised in a combination of both overt, traditional and legal business, and “black” operations, but both varieties serve the same master. Today’s analysis of one such organisation is instructive in both understanding the tactics and strategy typically employed, and the investigative tradecraft that is necessary to unmask such a company’s true nature. As we have previously stated, the inability of compliance to timely identify government-controlled companies can be ultimately fatal to one’s institution. In the last article, we identified the Lebanese Muslim Khalil brothers as close associates of Venezuelan national Ricardo Fernandez Barrueco. The brothers own and operate an organisation dedicated to supplying Venezuelan government agencies with seafood, high-technology and military equipment. As we shall see, their operations clearly fall into the de facto government agency category.

Compliance officers please note:

– Khaled Khalil Majzoub, born Galed Khalil Massub, on 26 August 1965, Cedula No. 6290182, sometimes incorrectly shown as 6290185. The validity of his identity document was an important issue in the past with a large North American multinational firm, which terminated its relationship with a firm when Khaled purchased it. Was he really born in Lebanon ? We cannot say, but his birth certificate was not filed until 1970, one day after his brother’s was registered. Khaled is a reputed radical Islamic fundamentalist, and the communications director of Sheikh Ibrahim Bin Abdulaziz Mosque in Caracas .

– Majed Khalil Majzoub, born Massed Khalil Massub, on 23 April, 1970, but incorrectly appearing upon his birth certificate as 23 January, 1970 . His Cedula No. is 13526338. He enjoys close relationships with pro-Chavez politicians and the military.

The benefits of preferred status.

The Khalil brothers, like their comrade, Ricardo Fernandez Barrueco, emerged from obscurity during the early years of the Chavez government, which has favoured certain companies with major contracts, easy access to loans, and tariff-free import licenses. Such preferred companies are assisted in placing their products in the local market through government-funded social programs, through entities such as CASA, the Agricultural Service Program, and PROAL, the Strategic Food Program, both of which bought from the Khalil organisation. The Venezuelan government has also assisted, or conspired with certain preferred companies in tax evasion and customs crimes. We note that the Khalil companies are believed to evaded large amount of taxes, notwithstanding their many lucrative businesses

Evidence of the incestuous ties between the Khalil companies and the Venezuelan government:

– They purchased the Eveba Group, a major seafood provider, from the Castro Iglesias family, a transaction that reportedly was facilitated by Diosdado Cabello Rondon, born 15 April, 1963, Cedula No. 8370825. Sr. Cabello, was formerly Venezuela ’s Vice President, and Minister of Infrastructure, and is presently the Governor of Miranda State . He is one of the most powerful men around Chavez. Also linked to the sale was Adan Coromoto Chavez Frias, born 11 November, 1953 , Cedula No. 3915103. The President’s brother, he is currently Venezuelan Ambassador to Cuba . Distribution of Eveba products is currently being conducted by Molinos Nacionales C.A, a/k/a Monaco , owned by Mexican agro-giant GRUMA, whose recent sale of part of their enterprise to Ricardo Fernandez Barrueco was detailed in our last article. This but another demonstration of the close ties among the New Bolivarian Elite.

– They shipped computer equipment and, reportedly, sophisticated surveillance equipment, to Venezuelan military and intelligence agencies. Majed Khalil, who is said to have a close relationship with Francisco Rangel dating back to the period when Rangel was a general officer, is alleged to have outfitted the situation room, in the basement of the Miraflores presidential palace, with electronic espionage equipment.

– Their organisation was reported, by Venezuelan media, as having supplied Maiquetia Simon Bolivar International International Airport with new radar, communications and navigation equipment. It is also believed by Venezuelan media to be supplying Venezuela ’s military with weapons and other hardware.

– Rumours abound of involvement of the brothers in money laundering, counterfeiting, drug trafficking and contraband smuggling, in concert with corrupt Venezuelan politicians and military officers.

Companies associated with the Khalil brothers are:

In Venezuela:

RIGOMAR AGENTES ADUANALES C.A

HARDWELL TECHNOLOGIES C.A. a/k/a GRUPO HARDWELL TECHNOLOGIES C.A.

QUALCOM TELESISTEMAS C.A.

EMPAQUE VENEZOLANO DE BACALAO, a/k/a EVEBA

AGROINDUSTRIAL PROEBA

PRODUCTOS PISCICOLAS PROPISCA S.A.

DUSTRIBUIDORA AGROMAR C.A.

ANCHOAS DE ARAYA ANDARSA S.A.

RECUPERADORA CASTRO IGLESIAS

AGROFORESTAL BARIMA C.A.

ALIMENTOS DELTA a/k/a ALIDELTA

INVESSIONES OVINOY S.R.L.

RIGOPLAS C.A.

SARDIMAR C.A. NUEVA ESPARTA

PRODUCTOS PISCICOLAS PROPISCA

DESAROLLOS SERFOCA C.A.

GRUPO JARBOL C.A.

In the United States :

HARDWELL COMPUTER INC.

ORINOCO ENTERPRISES, INC.

 In the Republic of Panama :

GENERAL TRADING COMPANY, S.A.

As we have shown, though these companies may appear to be privately owned, their acts and deeds are clearly governmental in nature. Money laundering reporting officers and compliance officers must practise enhanced due diligence when considering account relationships with any company located in a jurisdiction where covert governmental ownership is probable, or where recent events suggest the possibility. Compliance vigilance is made even more urgent by the realities of the post 9-11 world, where nuclear, chemical, or biological agents may be on the hidden agenda of the government-controlled company or its masters. Government-controlled companies are wisely avoided as unacceptable high-risks. Watch out for them.

PEPwatch Venezuela: Beware Of Government-Controlled Private Corporations I

Originally published 03.02.06 | One of the most perplexing phenomena for money laundering reporting officers and compliance officers is the government-controlled corporation for profit, a prominent feature of the Venezuelan Government’s recent attempts to launder money. Such corporations are dangerous to Western financial institutions when their officers try to conceal government ownership or control.

When a bank realises that it is dealing with such a company, it knows immediately that its officers, directors and agents rank as “politically exposed persons”. They probably have access to “arranged” financing, public treasury receipts, illicit funds and sundry other corrupt or criminal profits that they can divert to the company’s accounts. The sources of these funds can range from money stolen by the officers of the corporation to money laundered on the orders of government agencies or leaders. At the same time that this happens, the affiliated and subsidiary firms owned by a governmental, though private, entity become high-risk companies in their turn. They require an extremely “enhanced” form of “due diligence” before any bank can accept them as customers.

Towards a command economy

The government of Venezuela currently enjoys high-risk status. Its six-year history is littered with instances of missing oil revenues, the diversion of funds to support and encourage political chaos in the Western Hemisphere, cooperation with Colombian terrorist groups such as FARC and the ELN, and more. Any company or group that the government controls or owns beneficially must also pose a high risk. Compliance departments must therefore insist on treating the leaders of such companies as PEPs automatically. They must subject them to the deepest of enquiries into the sources of their funds, whether in their personal accounts or in company accounts located overseas. Venezuela-watchers believe that the Chavez government is moving the country towards a command economy on the Cuban model and is trying to acquire monopolies in crucial industries that are presently in private hands. In one such area, the production and distribution of food, it is believed that groups fronting for the government are now acquiring some of the major companies.

Not just the usual suspects

The country’s major “agribusiness” organisation is Grupo PROAREPA, which is the main food supplier for the government’s food assistance and distribution programs, CASA and MERCAL. Grupo Proarepa owns a number of companies, including at least one, ALMACENES Y TRANSPORTES CEREALES or ATC. Venezuelan web bloggers and other commentators believe that Adan Chavez, the brother of Venezuelan President Hugo Chavez, owns this subsidiary beneficially. Adan is the Venezuelan Ambassador to Cuba and an avowed Marxist. The group is also closely aligned with Argenis, another of the Chavez brothers. That these individuals are high-risk PEPs is self-evident.

There are several “giveaways” that suggest that the government is controlling Grupo Proarepa. People at the top in Venezuela have used it to cover up a criminal investigation and have prevailed upon it to turn a blind eye to tax evasion. In 2003 they also prevailed upon the National Assembly to vote for a very suspicious credit, in the amount of $ 41,833.702, to subsidiary PROFINCA. At the time, the subsidiary appeared to have no assets. On the same day, the two speakers whose job it was to pilot the relevant bill gave the chamber conflicting reasons for wanting the subsidy. Now, on to the listed pro-Chavez group leadership. The “officers of record” ? i.e., the listed officers, of PROAREPA and its many subsidiaries ? are a curious cast of characters. /Cedula/ numbers are national identity numbers.

* Sarkis Beloune Arslanian, cedula 9280364, born on January 1 1953, is a Venezuelan of Syrian extraction who was deported from the United States and had his visa cancelled on December 6 2004. Such an extreme action generally only occurs when US law enforcement authorities have strong evidence of continuing criminal activity. There are reports that he is under investigation for trading in narcotics and laundering mon

* Ricardo Fernandez Barrueco, cedula 9095496, born on April 9 1965, a Venezuelan who possesses passports under both his Venezuelan citizenship and that of a Colombian with a similar name, whose identity he is known to use. He has accumulated a substantial fortune in an amazingly short time and associates with such members of Chavez’s inner circle as Diosdado Cabello, the governor of Miranda State, and President Hugo Chavez’ father and brothers. A Venezuelan government criminal investigation by the national intelligence agency, DISIP, of FERNANDEZ’S activities was terminated mysteriously in February 2001. FERNANDEZ was being investigated for customs offences and other crimes related to “agribusiness”. He authorised multi-million-dollar deals with PROAL, the government food entity.

* General (retired) Gustavo Adolfo Sanchez Gonzalez, cedula 4115600, born March 5 1956, who was the director of PROAL at the time of the DISIP investigation. SANCHEZ is an officer of American Air Conditioning, a Floridian corporation, as are Fernandez and Arslanian.

Other persons associated with the Proarepa Group, and thus holding PEP status, are Bernard Gerald, Angel Fuentes Fragile, and the brothers, Adan, Edwin and Abraham Easer. The companies that are part of PROAREPA are listed below. There are many of them and they are of recent vintage; only three of them date to before 2000. Because most of them were set up after the advent of the Chavez government, they must all be considered as government entities for compliance purposes.

Venezuelan Government-controlled corporations

1 CORPORACIÓN TUREN.

2 COMMERCIALIZADORA DE GRANOS VENEZUELA R.S., C.A.

3 INVERSIONES MAJAGUAS R.S., C.A.

4 DISTRIBUIDORA LE MUST

5 VENARROZ R.S.A.C.A.

6 FB VALORES Y COMISIONES 1177 C.A.

7 INDUSTRIA VENEZOLANA MAIZERAPROAPEPA

8 VENEZOLANA DE GRANOS RSCA, C.A

9 ALMACENES Y TRANSPORTES CEREALEROS – (A.T.C.) C.A.

10 ROTCH ENERGY HOLDINGS INC. (See note *)

11 AMERICAN AIR CONDITIONING DE VENEZUELA C.A

12 MANTENIMIENTOS CONCRETA S.R.L.

13 AMERICAN AIR CONDITIONING INTERNATIONAL INC.

14 PRONUTRICOS.

15 GANADERIA LOS BUFALOS DEL DELTA C.A.

16 CORN MILLS ANDINA, C.A.

17 INVERSIONES PORTENAS, C.A.

18 GANADERIA EL GRAN CEBU, C.A.

19 GRANOS DE VENEZUELA, LTD., C.A.

20 PRODUCTOS Y FINANCIAMIENTO AGRICOLA ( PROFINCA)

21 AMERICAN FOOD GRAIN INC.

22 SERVICIOS PROARFE C,A,

23 CONSORCIO AGROPECUARIO VENEZOLANO C.A ( COAVE).

24 MANTENIMIENTOS POLIPLAST S.R.L.

25 CORPORACIÓN AGROPECUARIA INTEGRADA COMPANIA ANONIMA (CAICA).

26 MANTENIMIENTOS 2050 S.R.L.

27 DERIVADOS DE MAIZ SELECCIONADO, C.A. (Demaseca)

* This is a Curaçao-registered company that is an authorised PDVSA broker. It is also the vehicle through which Fernandez purchased a 50 per cent stake in Demaseca, a subsidiary of Mexican food giant Gruma.

The Proarepa Group is reputed to have as many as 40 overseas bank accounts, many in tax haven jurisdictions such as Switzerland, the Channel Islands and the Cayman Islands. Complinet’s sources say that it focuses its efforts almost entirely on domestic food production and distribution. Why, then, does it maintain such an extensive network of offshore accounts? This should raise a major “red flag” for compliance officers. MLROs and compliance officers should be mindful of powerful private companies from countries where governmental influence intrudes into the private sector, for they may very well be dealing with a wolf in sheep’s clothing. Financial institutions that bed down with corrupt PEPs always seem to have to suffer a barrage of bad publicity. They should therefore demand proof positive of beneficial ownership whenever they encounter suspect companies. This evidence should include sworn affidavits signed by partners of major law firms and accounting organizations. Even then, they should verify the information.