Roberto Rincón was the Steve Jobs of PDVSA contract-rigging. Today, he sits in a U.S. prison cell, having copped to tax, foreign bribery and conspiracy charges in a billion dollar corruption probe as part of a plea bargain to reduce his sentence from over 100 years to under 13.

How did he do it? By building a web of 36 maletín-based companies, with intractable nested ownership structures designed to throw investigators off his scent, able to produce multiple “competing” bids for PDVSA procurement contracts. The case the USDOJ put together shows Rincón as a master at creating the kind of bureaucratic fog corruption needs in order to prosper. That was the art of it, but the rest was more straightforward: Roberto Rincón just bought anyone with the power to decide who PDVSA procured equipment from. In the process, the maracucho businessman built an enormous fortune, on the back of one of the biggest cases of corruption in the Bolivarian republic’s history.

Our buddies at El Pitazo have the whole story, in horrifying detail.

The basic shape of the racket was straightforward. Say PDVSA needs to buy one million widgets. Bariven, PDVSA’s contracting arm, would then invite “qualified companies” to bid for the contract. Rincón, working together with his co-conspirator, Abraham Shiera, and relying on inside-info from Bariven officials he was paying, would get invitations to bid sent to a smattering of his own maletín companies. This would preserve the appearance of a competitive process. But it was rigged.

Rincón and Shiera’s sock-puppets would send “competing” bids for the contract, all of them way overpriced. Their least overpriced bid was guaranteed to win, since he’d make sure no honest companies bid as well. Over the years, ten separate Rincón-controlled companies won fat contracts from Bariven in this way. From the surcharge, he’d pay off his kickbacks and still have plenty of money left over for Ferraris for his kid and garish McMansions and the private plane El Pollo Carvajal flew to Aruba in.

How Breaking Bad was the whole scam? Try this on for size: Rincón actually bought a Car Wash and listed its address as the headquarters of several of his fake companies. A Car Wash. That Breaking Bad.

In this Radio Fe y Alegría interview, El Pitazo’s Fiorella Perfetto explains their investigation into the case.

The narrative is, in César Batiz’s words, “fit for a screenplay”,

In 12 years he built a structure of corruption and wealth that has vanished in eight months behind bars, so close yet so far away from his family’s $7 million Carlton Woods mansion.

You can’t help but gape at Rincón’s tremendous brass balls. In 2010, while living in a house that lived like that, he reported to the IRS he was earning $266,700. (The right figure was more like $6.6 million.) Turns out the gringos don’t like it when you do that: did Roberto never watch the Untouchables?

Scratch that. Who has time for movies when the taking is this good?

What’s amazing is how the Venezuelan state seems totally paralyzed even when faced with the most blatant of crimes. According to the El Pitazo piece:

“The US authorities were in charge of bringing the scam into the open, which at least according to facts verified by the Texas South District Court, amounts to a billion dollars between 2009 and 2014.”

The Venezuelan government has like less-than-zero excuses for failing to investigate this stuff. The gringo authorities have already done all the hard work. The documents are on the record, the affadavits signed, the corrupt Bariven officials are identified. ¿Qué más quieren, coño?

Aquí están, estos son: José Luis Ramos Castillo, Christian Javier Maldonado Barillas, Alfonso Eliézer Gravina Muñoz. And several more. What, do you need a Cedula number, too?

In a country that imports everything, at least we export criminals and outsource the administration of justice.

So how does a corruption mastermind like Rincón get unspectacularly caught by a Texas District Court? Apparently, as was the case for many a cartoon villain, it was a case of hubris:

“But confidence trumped prudence, and in November 2015, Rincón returned to Houston, where US authorities had been investigating him for tax evasion since 2011, according to a source. He was quickly arrested, brought to Court, and sent behind bars without possibility of bail. It has been 8 months since, enough to watch the empire he built in the last 12 years fall.”
An appalling story. But far from the only one, just one in many, many more. It makes me wonder about what our government’s structure truly looks like, and what it would mean to dismantle it. For the full story on Roberto Rincón, take a look at El Pitazo.

34 COMMENTS

  1. Thanks for posting this. I too wonder what remains of law enforcement in Venezuela when named co-conspirators walk freely.

    • To be clear, my source for this is a mix of court documents and my own instinct. One day all those documents will see the light of day!

    • Rincon family members were the only real Ovarbarians. The names that appeared on public documents were suckers, people who for whatever reason (ignorance, money, who knows) got mixed up in the big game and then ended up paying quite a price.

  2. A nice, concise summary. Congratulations to Francisco Toro, the people at Pitazo, and the U.S. justice Department.

    The amazing thing about these boliburgueses is that they flock to the U.S. like moths to a flame, only to be destroyed by the legal system there. This guy was convicted under a statute that applies to “U.S. persons” which doesn’t mean Venezuelans living in Venezuela.

    It’s as if they have looted Venezuela so completely that it has become unlivable, yet when they seek refuge, they are destroyed.

    I think it’s dialectical.

  3. All this is about not paying taxes, the corruption excuse is just to add up Rincon’s case but the real reason is they did not pay taxes.
    You guys probably forgot about the BANDES bond scam involving 3 Panamanians and 1 Colombian for $60M. The Colombian will only pay 3 years in prison even when they were found guilty and should have been 15 years, he is about to be released. His wife still leaves in a Brickell Key condo facing the water and driving a Range Rover.
    In this case, the Colombian declared and payed taxes in almost everything he got through the scam, the defense used this “appropriate behavior” to reduce his sentence because he is a “good citizen”
    It is disgusting.

    • It’s not digusting. U.S Treasure demands you to pay your taxes, and the feds are there to enforce just that.

      Feds aren’t there to fix corruption shenanigans from banana republics UNLESS these interfere at the inner workings of guvmintz’ machine

  4. One key man, so many more, and even bigger, with Venezuela’s probably last oil boom wealth down the drain, never to return.

  5. Today I am getting a double dose of Chavismo immorality. The other source for it was the crap Jorge Rodriguez had to say about the signature verification process. I guess by the end of the day I will top it off by some cadena with Maduro braying at the microphone.

    What amazes me is that Chavismo was so willing to sit in the muck of absolute corruption, rotting along with it. I mean, even low wattage Chavistas must see what corruption does to a government, they lived through their hated ‘cuarta republica’ for that and still learned nothing!

    This leads me to ponder why would they do this? Most of the 20% of hardcore Chavistas are not boliburgueses, yet you read Aporrea and still there are these deluded cheerleader, or even the shill of Mr. Weisbrot who added a piece in the debate section of the NYT today. But probably many of them sell out for so little.

    Let’s propose communist fanaticism as the culprit, but even then Castro, Mao and Stalin had bloody purges to purify their revolutions. But not so for Chavismo. No self criticism whatsoever. Maybe they were always too weak.

    Maybe they are just plain and vulgar psychopaths. But even mafiosi will correct and run their rackets with the intelligence of a parasite, you never kill the host. Yet these guys are killing their country.

    The most likely explanation is that of lottery winner. They fritter away to wind fall to end worse than where they started. Morally shallow people that are destroyed by their initial success. Something common in child actors when they grow up.

    • I believe the supporters of the current regime justify it by believing: “It was just as bad during the cuarta, but at least the current regime is FOR THE PEOPLE”.

    • I make the joke that wealthy Venezuelans pray that heaven is as good as Miami.

      But they are not alone. Corrupt Russians flock to the US too, and so do rich Chinese.

      Being out of their country with their fortune protects them from the whims of their corresponding dear leader. Being in a country with a working legal system protects them too, but the irony is not lost.

    • “But yes, my question too is, why do these guys flock to a jurisdiction with a functioning legal system?”

      Because they have superiority complexes the size of their stolen fortunes.

    • Hubris, and having grown up to be irresponsible in an irresponsible country, where one can literally get away with even murder.

  6. “¿Qué más quieren, coño? ”

    Que le echen la culpa de todo a la MUD y corten todas las posibilidades de relacionarlo con shiabbe, porque shiabbe es sagrado.

  7. Rincon is a big crook but far from being the only one. Francisco Javier Gonzalez, Arivenca’s president, was also caught and Puerto Rico wants him extradited. Hidalgo Socorro and Enoc Martinez are close to prison, after Socorro bought a bank in Guatemala with money obtained from PDVSA’s dealings, including the Aban Pearl barge. Derwick and Associates are being looked at by the U.S. Authorities. Wilmer Ruperti has been sued by the Russians. Rafael Ramirez and his cousin Diego are being investigated in the U.S. . Nervis Villalobos and his “friends” are known for millionaire deposits in Andorra.
    In PDVSA top managers and contractors have joined forces to sack it
    Several other PDVSA managers and former directors as well as some bankers are in the waiting list. Many of them are living in the U.S. where they can be indicted or have money and assets in that country. Bankers have become philantropists in order to launder their money. Some are in Florida, some in New York.
    Time and patience will do it.

    • PDVSA has always being more or less corrupt. I got offered a set of new tires for my car to help a service company to get a contract, I was the gravel on the bottom of the food chain pyramid and these people didn’t blink to peel the corruption card upfront, just imagine the guys 3 or 4 levels above me. Tires were bought eventually with my own sweat.

      That being said, there were plenty of people ready to keep up their nose clean and bet for a better country. Those people were tired of the same old dealings and despised the corruption of the time that seems a kids game compared with today . As you have said, everyone knows the rotten apples.

      What worries me a lot are two relatively basic things:

      (1) Our developed tolerance or ignorance to big theft (i.e. CAP got his hands slapped for 250 M Bs – 17 Million US$ at the time – and now this CDMs can’t account for $300,000 Million US$)

      (2) Some overtures by the opposition to sweep all this BS under the rug once they get into power.

      I am not sure, the 12 apostles are still at large, Vinicio Carrera, Blanca Ibañez and others…they are a long distance memory. Would it happen for the Ramirez and the Carjavals of our time?. Is our only punishment the exile of the corruption?

  8. I was wondering, when the whole chavista apparatus comes crashing down, can the US return all the money these disgunting thieves store in their banks to what will be the new venezuelan government? They’re gonna need every pennie cuando el peo eventualmente rebiente.

  9. The question has never been if the gringos would take care of the crimes committed in their soil. I mean, it does not take a lot pain to put in jail a corrupt Venezuelan that happened to be linked to the government which did not care to flaunt their wealth and cheated their taxes in the guise of millions of dollars. That is golden for the so called justice system and brings home the corollary: “who mess with the IRS se jode”

    The question is if the MUD or a government of opposition (I don’t care your pick) would do exemplary punishment not only to the boliburguess fauna but actually tackle la vivieza criolla and get us moved from “no me des sino ponme donde hay” to a true justice system where money and power may not protect corruption. Is that too much to ask?…I mean IS THAT TOO MUCH TO ASK?

    Or the in-governability phantom would make the new leadership turn a blind eye just to stay in power…the concept of insanity is to do the same thing over and over expecting a different result. Ojo con eso..

  10. This is just the tip of a huge iceberg of corruption in Pdvsa , its not just people from ouside Pdvsa who made money by paying bribes to Pdvsa officials but cliques of racketeers inside Pdvsa who demanded money in order to allow legitimate payments to be made .or who rigged purchasing or selling transactions in exchange for money recieved , The US investigations have so far only made public the names of the people outside Pdvsa who participated in a few of these rackets , but very little about the many powerful people inside Pdvsa who were involved in them .

    People in pdvsa (lower level of course) would sometimes be found out glaringly ‘breaking the rules ‘ by inside comptrolling departaments , but the order always came to keep it under wraps and simply allow them to either retire or quietly quit their jobs……

    There are a hundred corruption stories waiting to be discovered or publicised …….what has me wondering about the US govt investigation and pursuit of some of these cases is why are the names of the Pdvsa officials almost always left out……..!!

  11. Quico, the plane flew on to mexico for meet with mexican cartels. The aruba operation was not a total failure. It was an intel bonanza….the chickens cell phones.

  12. se acuerdan de la foto donde sale el pollo con los agentes de la dea en aruba? La foto q publico el Miami Herald? That was a fuck up and cover up. From who took the picture to who gave the picture to the MH. Ahi todos se hacen los locos. Esa operacion fue mal planeada y supervisada. Los agentes where way in over their heads because they failed to foresee the ramnifications of their actions. Little did they care about Aruba and the dependance Aruba has on Venezuela. That was not their concern. Aruba chicken caper is case study in groupthink, myopia and tunnel vision. Not knocking dea. Alrevez, they are the front lines in the war against narcostate and narcogenerals. Como dice Bill, los celulares!

  13. The Corruption DNA runs deep in the Venezuelan personality profile. Since the days of the Colonia, contraband, corruption and bribery have been the way of life. I don’t believe its any worse now except the volumes are many time greater. I always go back to the joke about when God distributed the goodies etc. etc. Sad but true.

Leave a Reply