(WSJ) Treasury penalizes ex-officials it says perpetrated a huge fraud in Venezuela’s currency markets, days before the leftist leader starts a second term
The U.S. Treasury Department on Tuesday sanctioned a Venezuelan network that allowed the owner of media giant Globovision Tele C.A. and several state-connected businesspeople to illicitly make billions of dollars in profits from the country’s broken currency market.
The U.S. action is part of a comprehensive sanctions campaign Trump administration officials say is meant to pressure President Nicolás Maduro into restoring democratic order and the rule of law.
The latest action targets former Venezuelan Treasury officials, seven Venezuelan businesspeople and nearly two dozen of their companies, including Globovision, the country’s largest media company. It freezes their assets under U.S. jurisdiction, prevents their travel into the U.S. and bars American firms from working with the blacklisted entities. This all complicates their international business dealings.
The administration timed its latest salvo to fall ahead of Mr. Maduro’s Thursday inauguration to a second term following an election Washington says was fraudulent and expands a grip on power kept through violent repression.
Previous U.S. actions have detailed top Maduro regime officials running state-aided narco-trafficking and money-laundering operations and widespread corruption throughout the government. That includes in the food program Caracas says is to aid a starving population but the U.S. alleges is used for political control.
The sanctions follow prosecutions of several of the targeted individuals, including Alejandro Andrade, the former national treasurer, who once served as a bodyguard to Mr. Maduro’s predecessor Hugo Chávez. Mr. Andrade pleaded guilty in a U.S. court to taking more than $1 billion in bribes while in office.
Also targeted is Raúl Gorrín, president of Globovision and life insurance broker Seguros La Vitalicia. U.S. officials say Mr. Gorrín bribed Mr. Andrade and his successor, Claudia Patricia Díaz, to gain privileged rights to exchange currency for the Maduro government. Ms. Díaz, Mr. Chávez’s former nurse and another U.S. Treasury target, is fighting related money-laundering charges levied by Spanish prosecutors.
U.S. officials allege Mr. Gorrín and several of his associates used Venezuela’s widely used black market exchange rates—running at much higher rates—to reap billions of dollars in profits. Mr. Andrade told U.S. prosecutors those profits were transferred into assets overseas, including in the U.S. and Europe.
Calls and emails to Mr. Gorrín, his attorney in Miami, Howard Srebnick, Globovision and Venezuela’s Information Ministry weren’t immediately returned. Mr. Andrade is serving a 10-year U.S. prison sentence that he received late last year. Ms. Díaz, the other former national treasurer, couldn’t immediately be reached for comment, but has rejected the Spanish prosecutor’s allegations against her. In the past, the Maduro administration has routinely dismissed U.S. sanctions as part of an effort to destabilize Venezuela’s leftist government.
The U.S., in prosecuting its broad sanctions campaign against the Maduro government, is trying to disrupt operations and the political alliances that help the president stay in power. It also hopes that exposing the government’s activities will undermine political support in Venezuela and any remaining international backing.
“Venezuelan regime insiders have plundered billions of dollars from Venezuela while the Venezuelan people suffer,” Treasury Secretary Steven Mnuchin said. “The United States remains committed to holding accountable those responsible for Venezuela’s tragic decline, and will continue to use diplomatic and economic tools to support the Venezuelan people’s efforts to restore their democracy.”
Treasury’s actions target the small cadre of officials and Venezuelan elite that U.S. and ex-Venezuelan officials say are profiting from Mr. Maduro’s control of the government. That wealth that stands in contrast to a deepening economic contraction and the plight of most Venezuelans, circumstances that have sparked a mass migration out of the country.
Despite threatening to ban Venezuela’s most important resource, oil, the administration has so far held off from targeting the crude exports that American refiners buy to help keep America’s gasoline tank topped up. U.S. officials say that is in part because of fears it could give Mr. Maduro political ammunition as he blames the U.S. for his nation’s economic woes.
Since 2003, Venezuela has maintained a web of currency controls that restrict access to U.S. dollars, resulting in multiple exchange rates. U.S. officials say that has generated large profits for government officials and their allies who were allowed access to greenbacks and other foreign currencies. The profits were often then moved to offshore accounts and foreign companies, according to U.S. officials.
Caracas has made fewer dollars available in recent years as it struggles with an economic crisis. But the currency scheme the U.S. alleges was exploited by Mr. Gorrín and his network is still active, economists and Western diplomats say, because the government maintains control over dollar flows and many of the same people are still in power.
Despite the sanctions, the U.S. action on Tuesday allows American financial companies to gradually wind down their relationship with Globovision over the next year. Officials say that was meant to persuade Globovision to force out Mr. Gorrín and fellow owner and brother-in-law, Gustavo Adolfo Perdomo, of the company. U.S. Treasury officials say Mr. Perdomo and his wife, who are among the seven it targeted, were primary accomplices in the illicit activities.
Cosme de la Torriente, the Miami-based lawyer listed in Florida corporate records as the registered agent for one of those companies, Magus Holdings USA, Corp., didn’t respond to requests for comment on behalf of the owners.