Will Europe's bankers be sitting in the dock in Caracas for Money Laundering?

FROM A
DIFFERENT ANGLE by Kenneth Rijock

Financial Crime Consultant, for World-Check

15 May 2008

Some of the most influential Venezuelan opposition leaders in exile have stated that they intend to file criminal charges against a number of European bankers who have assisted their country's corrupt leaders illegally move billions of dollars of government oil revenues into EU financial institutions. Prominent senior members of the Venezuelan government, working in close coordination with a number of young businessmen having close ties to the Chavez regime, (popularly known as the Bolivarian Elite) have developed sophisticated methods of draining petrodollars, and banking them outside the country. The EU bankers who have assisted them are in for a nasty shock. Who will the axe fall upon?

As the present the Venezuelan government struggles to maintain the shattered economy, and ever-growing scandal after scandal rock the country, the probability that a democratic government will eventually come to power increases, and with that the risk of indictment and extradition of foreign bankers. The facts:

Europe's bankers are beginning to realise that they are engaging in risky behaviour by continuing to bank large balances of corrupt Venezuelan PEPs. The security chief of one of the UKs largest banks conducted an extensive enhanced due diligence investigation of a prominent Venezuelan PEP seeking to open accounts. He did not know that the individual, well known to be involved in front activity for senior government leaders, already had $1.8bn in accounts in the bank's Panamanian branch.

Investigators have identified 47 employees of the governmental oil company, Petroleos de Venezuela, (PdVSA) as having primary roles in facilitating the movement of oil revenues to corrupt officials and their associates. Their affiliation with PdVSA is unknown to EU bankers.

The laundering and subsequent movement of funds to FARC-controlled accounts further exposes the Euro-bankers to possible terrorist financing charges. The risk of discovery of such actions will increase exponentially when the Government of Colombia declassifies and releases the master list of all 16,000 FARC members, past and present, to the public. FARC members who are bank clients will then become known to both the banks, and the world's law enforcement community. If FARC members are later arrested in their Venezuelan border base-camps. and charged by a future Venezuelan government with War Crimes, or Crimes Against Humanity, will their bankers be also named as co-defendants? Do not underestimate the strong feelings held by the Venezuelan opposition for anyone who assists the present regime.

If this is not bad enough, US law enforcement has proof of the movement of funds from Venezuela, through EU banks, ending up in the hands of Hizballah, Hamas, ETA, and several other lesser-known but also designated terrorist organisations. Will The US bring terrorist financing charges in US courts, especially if funds transited through the US enroute to Europe? We cannot say, but I would respectfully remind Europe's bankers that the US has a bad habit of arresting them, based upon a sealed indictment, when they land in Orlando on a visit to Disney World. That might just ruin anyone's holiday.

Factor in the risk that a total deterioration of diplomatic relations between the US and Venezuela may precipitate widespread OFAC sanctions, which could bring down the regime, and you potentially have a powder-keg which could ignite at any time. EU bankers might be well advised to take stock of their level of risk, including on a personal level.

The facts and opinions stated in this article are those of the author and not those of World-Check. World-Check does not warrant the accuracy of any facts and opinions stated in this article, does not endorse them, and accepts no responsibility for them.

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