Key Witness Testimony in PDVSA Corruption Case: Uncovering the Money Laundering Scheme and its Implications

However, they were slow to send the currency purchase contract (“forex”) to formalize the deal, although this initially did not worry Binaggia since the funds, as they had told him, would come from a properly regulated European financial entity. According to Binaggia, his goal was to offer the dollars to his clients in Venezuela.

Thus, Binaggia asked Convit to transfer part of the funds into a trust of which he was the ultimate beneficiary. Convit completed the operation and informed him that the funds would arrive in euros rather than dollars.

By mid-February 2015, Binaggia had already received about 78 million euros in several transfers and was allegedly still pressing Convit for the forex contract between his trust and Portmann Capital Management Ltd, which turned out to be the financial arm of a company registered in Madrid: Columbus One Properties SL.

Everything pointed to the fact that this amount corresponded to bribes that Convit and his partners from Derwick needed to pay to officials Urdaneta and Abraham E. Ortega, the Director of Finance at Pdvsa, who facilitated the operation.

Eventually, Convit sent a clearly forged document: a fake joint venture contract for $600 million between Eaton Global Services Limited, a shell company registered in Hong Kong and owned by Raúl Gorrín Belisario—a close associate of Nicolás Maduro and Cilia Flores—and Binaggia’s trust. The supposed purpose of the mixed company was to grant loans in bolívares to PDVSA.

Binaggia informed Convit that the fake agreement could not be used and that he needed the original underlying exchange contracts. Days later, in Venezuela, Urdaneta handed Binaggia the documents and explained that he had obtained them from a PDVSA official identified in the indictment as Conspirator 1, probably Alvaro Ledo Nass, legal consultant of Pdvsa.

The papers that Binaggia submitted to HSI-Miami revealed the source of the Pdvsa funds and the nature of the scheme.

The set of documents consisted of three pieces: a loan contract in bolívares payable in dollars between Pdvsa and Rantor Capital CA—Raúl Gorrín’s shell company registered in Anzoátegui—for an amount of 7.2 billion bolívares; a subsequent contract between Rantor and Eaton Global in which the former assigned creditor rights from Pdvsa to the latter, and a letter from Eaton Global to Pdvsa, specifically to Víctor Aular Blanco, Vice President of Finance, informing them of the exchange, requesting that payment be made in euros (ironically, they did not have accounts in bolívares) and transferred to Portmann Capital Management Ltd, a financial entity registered in Malta, owned by the Swiss Kurt and Yves Portmann, in the name of Eaton Global.

In summary, Raúl Gorrín was left with the obligation to pay PDVSA around 7.2 billion bolívares (valued at 35 million euros) and received in return 510 million euros.

The US indictment describes this operation as an “naive attempt” to cover what was clearly “misappropriation of funds.”

It was already evident that it was not just a currency transaction but a money laundering operation in which Binaggia was expected to launder the proceeds of the misappropriation of Pdvsa funds and make bribery payments to the officials who facilitated it.

The risks were high, and Binaggia knew it because he had previously participated in similar schemes with the exchange differential business in operations with the Treasury and with Pdvsa itself, in the case of the Administradora Atlantic 17107 and Violet Advisors SA of the brothers Luis and Ignacio Oberto Anselmi. Rumors were circulating that US authorities were investigating him.

Operation Money Flight Begins

After the meeting with HSI in Miami in early 2016, Binaggia left as a “confidential source” (CS, for its initials in English) who over the coming months provided dozens of documents and recordings for what became known as Operation Money Flight, involving several US and European agencies.

As part of the operation, Binaggia continued to work with Convit and José Vicente Amparan, identified in the indictment as a professional money launderer.

Thus, Binaggia made cash payments in Venezuela ordered by Urdaneta and Conspirator 1—likely Álvaro Ledo Nass—to themselves and to Aular, who received one million euros in cash.

In total, Binaggia made transfers worth approximately 15 million euros during the summer of 2015, including several electronic transactions in dollars ordered by Convit and Urdaneta until he began to resist making further payments, using the liquidation of his trust as an excuse. Binaggia argued that he could not continue without the promised currency contract, which the banks were requesting for compliance reasons.

Stalemate and New Operators

Convit and Urdaneta continued to pressure Binaggia to execute the ordered transfers. Ultimately, they summoned Binaggia to a meeting in Convit’s office in Caracas. It was there that the now-infamous encounter happened, where Convit, who had a gun on his desk, held the remote control for a German Shepherd’s collar and intimated Binaggia, saying, “I can’t always control it.”

At that meeting, Amparan told Binaggia that the fake joint venture contract had already been provided to the banks working with Portmann Capital Management Ltd in Canada and Malta, so it would be impossible to replace it with a simple currency contract; in any case, they would need additional fake contracts. At this point, Binaggia expressed that he had requested the return of the Pdvsa funds and the reversal of the transactions, which was obviously impossible.

In the following weeks, the group’s activities focused on replacing the fake joint venture contract with another “better” one, also fake, to justify the initial transfers to Binaggia, while efforts continued to finalize the agreed bribes to Urdaneta and Ortega.

In the recordings made by Binaggia, group members explicitly recognized that what they were dealing with was a money laundering and illicit enrichment operation.

As months passed and the operation stagnated, Gorrín and Ortega incorporated other international financial operators such as Matthias Krull, a banker from a Swiss financial entity, and Gustavo Hernández Frieri, Colombian by birth and naturalized US citizen, described in the indictment as a “professional money launderer.”

Binaggia continued operating with Urdaneta, Ortega, and Conspirator 1—probably Alvaro Ledo Nass—to try to distribute Pdvsa funds among themselves and the other members of the scheme based on the additional fake contracts offered by Amparan.

Cilia’s Boys

From a recording of a meeting in Madrid in March 2017, discussing the use of fake bonds in the scheme, the concern of the operators about delivering their share of the loot to Cilia Flores’ children—stepchildren of Maduro—Walter, Yoswal, and Yosser Gavidia Flores becomes clear.

The meeting took place at Columbus One Properties SL, owned by Ralph Steinmann, Luis Fernando Vuteff García, Amparan, and Darío Ale. The group’s financial operations were conducted through Portmann Capital Management Ltd.

In several moments of the conversation, Urdaneta and Binaggia refer to the need to pay a portion of the operation’s profits (159 million euros) to members of the Venezuelan regime, referring to them variously as “the boys,” “the lady’s children,” “the kids,” or “Cilia’s acquaintances.”

From left to right: Yorwing Rodríguez, Jean Carlos Rodríguez, Yosser Gavidia, Walter Jacob Gavidia (red cap), and Yoswal Gavidia, in 2017, during skydiving training in Los Roques. Photo by Human Rights Foundation, via ArmandoInfo.

The Origin of the Case

On December 15, 2014, Víctor Aular, Vice President of Finance at Pdvsa, received instructions from the Executive Committee to sign a loan contract of bolívares payable in dollars with a company owned by Raúl Gorrín. Two days later, on December 17, Aular subscribed on behalf of PDVSA a contract with Rantor Capital CA for an amount of 7.2 billion bolívares. This contract was similar to one signed in March 2012 by the same Aular on behalf of PDVSA with Administradora Atlantic 17107, a deal reported as illegal by Tarek El Aissami to the regime’s prosecutor’s office this month.

At that time, the official exchange rate between the bolívar and the dollar was 6.30, meaning the 7.2 billion bolívares equated to 1.143 billion dollars. However, in the parallel market, the rate was 182.23 bolívares per dollar, so Rantor (Raúl Gorrín) only needed to exchange less than 40 million dollars in the black market to obtain the 7.2 billion bolívares he had to lend to PDVSA. The remaining difference, around 560 million dollars, constituted the profit from the exchange differential that was split among Raúl Gorrín, Cilia Flores’ sons, stepchildren of Nicolás Maduro, the Derwick group, senior officials from the oil company and the Ministry of Petroleum, advisors, bankers, and financial operators.

This wasn’t the only operation conducted by Convit, his Derwick partners, and Raúl Gorrín involving Pdvsa funds.

In May 2015, when Cilia Flores’ nephew, Erik Malpica Flores—currently a key figure in Miraflores—was in charge of Pdvsa’s finances, the scheme had doubled that amount to 1.2 billion dollars through an extension of the 2014 contract. Sources from Pdvsa indicate that the group repeated similar operations nearly a dozen times.

Gorrín turned to his banker, Matthias Krull, to launder the “profits” from this second operation and to distribute the corresponding parts to other members of the scheme: around 600 million dollars deposited by Pdvsa in Gazprombank.

The opaque billion-dollar currency operations of Pdvsa with Alejandro Betancourt and Raúl Gorrín

The Operation Doubles

In October 2016, Krull met with Binaggia in Panama and explained that he was looking for a bank to deposit funds from a currency operation between his client—Gorrín—and Pdvsa. Binaggia replied that he could explore some options, but he needed the contract justifying the source of the funds. A few days later, Krull sent the requested document. It was an amendment to the original contract between Pdvsa and Rantor, doubling the credit line from 7.2 billion to 14 billion bolívares. The modification was dated May 25, 2015, and specifically incorporated the initial loan contract.

In the subsequent communications, Krull sent Binaggia via email copies of the passports of Gorrín and Mario Bonilla Valera, a friend and frontman for Cilia Flores’ children.

After several meetings in both Miami and Panama to delineate how to transfer the funds, according to a chart attached to an email in the possession of US authorities, the 600 million dollars were distributed as follows:

A sheet titled “Detailed Revenues of PDVSA” shows ten transfers from PDVSA from December 29, 2014, to February 3, 2015, amounting to 511,913,270 euros.

Another worksheet titled “Summary of Operation 600k” indicates that of the 511 million euros:

20,476,530.83 euros were assigned to Portmann Capital Management Ltd., corresponding to a 4% fee. Later, the company would be fined by the financial authority of Malta in August 2018 upon the accusation against Convit.

227,265,537.52 euros went to the “Boli” (Convit and Betancourt) who transferred 78.8 million euros to Binaggia (the trigger for Operation Money Flight) and the rest, around 148,465,000 euros, to themselves through the shell companies Volbor Vontobel and Explotación Vencon.

 159,085,876.26 euros were allocated for “the kids” (Cilia Flores’ children, stepchildren of Maduro).

68,179,661.26 euros were for Raúl Gorrín, who sent dozens of dollar transfers through banks in Malta and Austria, including payments for jet and yacht services in Miami, Florida.

The remaining 36,905,664.87 euros were accounted for as the cost of the initial 7.2 billion bolívares used to obtain the 511 million euros.

According to Pdvsa sources, Gorrín and his Derwick partners conducted at least nine similar operations.

Carlos Erik Malpica Flores, Cilia Flores’ nephew, is currently a key figure in Miraflores. Photo Poderopedia

As of Today

Four years after the US indictment against Francisco Convit, the officials, intermediaries, and financial operators involved in the scheme are either imprisoned or on the run.

Francisco Convit finds himself in Venezuela, unable to leave due to a US arrest warrant and under the regime’s watch, which fears he might provide information, as has occurred with other members of the scheme.

Meanwhile, Alejandro Betancourt was accused this month by the regime’s prosecutor—amidst the process against Rafael Ramírez—of various corruption cases in Pdvsa, including those related to the Oberto brothers (Administradora Atlantic 17170), resulting in the seizure of a house in the Caracas Country Club and a helicopter. Betancourt’s dealings with PetroZamora (Zulia) are also under review.

Raúl Gorrín has been on the US wanted list since 2019, in connection with the case of former national treasurer Alejandro Andrade, sentenced to 10 years in prison, who confessed to receiving 1 billion dollars in bribes from Gorrín in exchange for facilitating operations like those described here from the Treasury during the tenures of Andrade and Claudia Díaz Guillén, who is currently being prosecuted in a US court. Gorrín, who remains in Venezuela under regime protection—for now—is also being investigated in the Money Flight Operation case.

Matthias Krull, the German banker raised in Venezuela, residing in Panama, and high executive of Julius Baer, was arrested in 2018 at Miami airport. After pleading guilty, he became a “star witness” who recruited other Swiss bankers to testify for the prosecution. In exchange for his cooperation, a judge reduced his original ten-year sentence to three and a half years in 2020. In his statement to authorities, Krull acknowledged, among other things, attending a meeting at Raúl Gorrín’s office in Caracas where he met Cilia Flores’ three children, who obtained nearly 200 million dollars from the irregular currency scheme with Pdvsa orchestrated by Gorrín and the “bolichicos.”

Gustavo Hernandez Frieri was arrested in Sicily, Italy, in July 2018, just days after the indictment against Convit was made public, from where he was extradited to the US. In 2021, a federal judge sentenced him to four years in prison after he pleaded guilty to money laundering in 2019. In April 2022, a Florida court confiscated the mansion where Hernández Frieri and his family resided in Miami, valued at nearly 5 million dollars.

Abraham Ortega surrendered to US authorities in 2018 and pleaded guilty. In May 2021, he was sentenced to two years and four months in prison after admitting to receiving over 12 million dollars in bribes transferred to financial institutions in the US. Ortega received a significant reduction in his sentence—from five years—because he was the first Venezuelan official to cooperate with US federal authorities in the case.

Carmelo Urdaneta surrendered in Miami in August 2020 to face money laundering and corruption charges. He was released on bail of 1.5 million dollars. In July 2021, he reached an agreement with the Prosecutor’s Office and pleaded guilty to conspiracy to launder money. In 2022, he was sentenced to four years in prison. Owing to his cooperation, Urdaneta was accountable only for one of the charges. However, he faced a fine of 35,000 dollars and the seizure of 49 million dollars in assets, including a $5.3 million apartment in Porsche Design Tower in Sunny Isles Beach, as well as two apartments in Miami Beach and funds from a Swiss bank account.

However, not all former Pdvsa officials surrendered to cooperate and try to reduce their sentences, confiscations, and fines.

José Vicente Amparan fled Spain, where he resided, when it became known that US justice was investigating these events, on a flight to Turkey, from where he returned to Venezuela. Before fleeing, Amparan handed a backpack filled with documentation and a computer to his wife, which she left at a locker in a gym in downtown Madrid. Spanish police managed to recover this material to present it to justice as part of the so-called Operation Carabela.

After his involvement in the scheme due to the transfer of nearly 200 million dollars from Pdvsa to Cilia Flores’ children, stepchildren of Maduro, Mario Bonilla was summoned to a hearing on August 16, 2018, in Florida, which he did not attend. For this reason, he was declared a fugitive from US justice. It is presumed he is in Caracas.

Luis Fernando Vuteff, a partner of Columbus One Properties, was arrested in Spain in 2018. He was out on provisional release when he was rearrested in Switzerland in June 2022 and extradited to the US two months later. It remains to be seen if he will also plead guilty and cooperate with authorities or if he will maintain his innocence due to the contract.

Pedro Binaggia is believed to be living in Miami.

Maduro’s Regime Shoots Itself in the Foot

The Attorney General of Maduro’s regime, Tarek William Saab, announced at the end of August the arrest of Víctor Aular, former Vice President of Finance at PDVSA. This arrest is part of a complaint made the day prior by the Minister of Petroleum, Tarek El Aissami, against Rafael Ramírez, who was head of the oil company for more than ten years.

The Maduro regime accuses Ramírez of having stolen 4.85 billion dollars through “a fraudulent credit line with which Pdvsa made 28 payments to two foreign funds without receiving any loans.” These events occurred ten years ago.

This refers to the irregular financing contract of Pdvsa with Administradora Atlantic 17107 CA from 2012, facts that were initially reported exclusively by this outlet, Cuentas Claras Digital, in May 2016.

Saab, in response to El Aissami’s complaint, opened an investigation into the case and issued measures to secure properties and assets against Juan Andrés Wallis Brandt, head of Administradora Atlantic 17107 CA, one of the companies used in the scheme; Víctor Aular Blanco, and financial operators Luis Oberto Anselmi and Ignacio Oberto Anselmi, Rafael Ramírez, and Nervis Villalobos, among others.

The video of Aular’s testimony, clearly forced by the usual intimidation of the regime, was not published in its entirety to protect Raúl Gorrín and his partners, including Malpica Flores and Cilia Flores’ children. In it, Aular also detailed the contract between Pdvsa and Gorrín’s companies (Rantor and Eaton Global).

Just days after Saab’s rushed accusation, other accusations followed from the “prosecutor,” in which it became evident that the regime sought to sidestep the Atlantic issue.

Finally, if the opaque contract of Pdvsa with Atlantic is illegal, as the regime now claims, how does it stand with the contract with Raúl Gorrín’s Rantor, which has identical characteristics, involving Maduro’s own stepchildren?

On the other hand, if Aular signed both similar contracts, how can it be explained that the Public Prosecutor’s Office, through prosecutor Farik Karin Mora Salcedo, requested in 2020 the dismissal of the Rantor case (Gorrín), which was approved by Judge Luisa Romero, while in the Atlantic case, they announce criminal actions and keep Aular imprisoned, without commenting on the current businesses with the exchange differential made by Gorrín and other alleged entrepreneurs close to Erik Malpica Flores?

As we’ve been saying, the Venezuelan judicial system, controlled by the autocrat, only acts when it benefits Nicolás Maduro’s political interests, although in this case it seems to have shot itself in the foot.

What is evident is that if half of what Maduro says about Ramírez and Ramírez says about Maduro is true, both should be prosecuted for the plundering that Venezuela has suffered and the serious harm caused to the heritage of all Venezuelans. A confession from one party releases evidence.

Article 271 of the National Constitution establishes that crimes committed against public wealth do not prescribe.