Francisco Illarramendi has admitted to taking almost a half-billion dollars from the pension fund of Venezuelan state oil company PDVSA and dumping it into a Ponzi scheme. One might expect the Venezuelan justice system to be interested in the case.
Venezuelan court dismisses case of Francisco Illaramendi
The financier Francisco Illaramendi, whose US trial for a Ponzi scheme fraud is ongoing, hasn’t committed any crime in Venezuela, according to the Venezuelan justice system.
According to US authorities, the suspect [Setty note: he pleaded guilty 14 months ago, so he’s not just a suspect] used $480 million from the workers and retirees of PDVSA, deposited in investment funds managed by his companies, to fund his scheme.
March 22 of this year, the First Criminal Hearings Court in the Metropolitan Area declared the lack of a case against the Venezuelan-American financier, following a request in Sept 2011 by the sixth auxiliary prosecutor, Engel Jose Ordaz.
The prosecutor opened a proceeding after a claim presented by deputies Ismael García, Hermes García, Jesús Paraqueima and Miguel Pizarro, Feb 23 of last year… They also requested an investigation of ex-finance director of PDVSA Eudormario [sic] Carruyo, state oil company manager Juan Montes, and Electricidad de Caracas ex-President Javier Alvarado, among others.
None of the requests were granted because “the facts of the case don’t demonstrate a criminal nature”…
Prosecutors presented documents that show that from 2005 to the present, there is no record of a board decision at PDVSA regarding where to invest savings from the two funds…
A source consulted by El Mundo Economia y Negocios said that in 2004, when Illaramendi [sic] worked for Credit Suisse Firts [sic] Boston, the ex-minister of finance and later board member of Pdvsa, José Rojas, contracted with him to be in charge of liquidating debt and facilitating the oil company’s exit from the Securities Exchange Comission (SEC). At that time he had access to confidential information about PDVSA operations.
January 19 of last year, the SEC discovered a series of illegalities in the Michael Keenwood [sic] Capital Management funds, which belonged to Illaramendi [sic]. Today, the trial of the financier continues in the USA, while two Venezuelan accountants who pleaded guilty for participating in the fraud are serving sentences. Of those mentioned by the deputies, only Montes has made declarations to US justice.
Just to add a little note here: The US-appointed receiver in the Illarramendi case filed a suit to get as much as $171 million back from Moris Beracha and some related companies and other entities, who had business dealings with Illarramendi. Beracha says the business was legitimate.
Now, Beracha and his lawyers are trying to get the case moved to Venezuela, on many grounds: the US justice system doesn’t understand Venezuelan finance, the witnesses are in Venezuela, Beracha isn’t a US resident, the money involved never went to the US, among other things.
(In case you are really interested in the case, here is Beracha’s own statement on the jurisdiction issue. I know a lot of people arrive here after searching for his name, so consider this a favour.)
Gotta wonder, though. By dismissing the whole Illarramendi case without a trial — even after he has already pleaded guilty in the USA — are the Venezuelan courts demonstrating that they are competent to deal with such things?