In a quietly charming official memo, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) calmly walks U.S. bankers through the morass of Venezuelan kleptocracy in all its endlessly inventive forms.

It’s a remarkable read — a work of deep transcultural translation you have to read with your your chanchullero-English/English-chanchullero dictionary open at all times.

I especially enjoyed their “red flags” section:

The red flags noted below […] may help financial institutions identify suspected schemes by corrupt officials, their family members, and associates to channel corruption proceeds, often involving government contracts or resources, through transactions involving Venezuelan SOEs and subsidiaries:

Government Contracts: Corrupt officials may use contracts with the Venezuelan government as vehicles to embezzle funds and receive bribes. In this regard, some financial red flags can include:

  • Transactions involving Venezuelan government contracts that are directed to personal accounts.
  • Transactions involving Venezuelan government contracts that are directed to companies that operate in an unrelated line of business (e.g., payments for construction projects directed to textile merchants)
  • Transactions involving Venezuelan government contracts that originate with, or are directed to, entities that are shell corporations, general “trading companies,” or companies that lack a general business purpose.

Members of the regime and their allies direct government contracts to their associated companies to import goods and obtain approval from the Venezuelan Corporation of Foreign Trade (CORPOVEX) for foreign-domiciled companies—often shell companies—to participate in the import activity.5 Both the importers and the receiving government officials often divert a portion of the merchandise to the black market, where pro ts are higher.

  • Documentation corroborating transactions involving Venezuelan government contracts (e.g., invoices) that include charges at substantially higher prices than market rates or that include overly simple documentation or lack traditional details (e.g., valuations for goods and services). Venezuelan officials who receive preferential access to U.S. dollars at the more favorable, official exchange rate may exploit this multi-tier exchange rate system for pro t.
  • Payments involving Venezuelan government contracts that originate from non-official Venezuelan accounts, particularly accounts located in jurisdictions outside of Venezuela (e.g., Panama or the Caribbean).

Export businesses in South Florida that specialize in sending goods to Venezuela are particularly vulnerable to trade-based money laundering (TBML) schemes. These include businesses that send heavy equipment, auto parts, and electronics (cell phones and other appliances) from Florida to Venezuela.

  • Payments involving Venezuelan government contracts that originate from third parties that are not official Venezuelan government entities (e.g., shell companies).

Public reports indicate that the use of third parties, or brokers, to deal with government entities is common in Venezuela and is a signifiant source of risk. Brokers, particularly when colluding with corrupt government officials, can facilitate overseas transactions in a way that circumvents currency controls and masks payments from SOEs.

  • Cash deposits instead of wire transfers in the accounts of companies with Venezuelan government contracts.

In addition, other financial red flags observed in transactions suspected of involving Venezuelan government corruption include:

  • Transactions for the purchase of real estate—primarily in the South Florida and Houston, Texas regions—involving current or former Venezuelan government officials, family members or associates that is not commensurate with their official salaries.
  • Corrupt Venezuelan government officials seeking to abuse a U.S. or foreign bank’s wealth management units by using complex financial transactions to move and hide corruption proceeds.

Godspeed, gringo compliance officer, godspeed!

23 COMMENTS

    • It would be nice if Toro would spend more time addressing the mad man in the White House and less attacking his own rightfully elected president who at least secured a clear majority.

      • JudiLynn I think you ought to know that Caracas is in Venezuela (and some others make off the wall comments) about USA politics. The Caracas (the Capital of Venezuela) Chronicles is about the life and death of the citizens of Venezuela, their political mess (not ours). The drug trade, the reduced life expectancy murder rate, and crime rate, availability of living essentials (like food, medicine, water quality, electric power availability, transportation) etc.

        Senor Toro is trying let the (and few others) to world what it is like to live with Mad Ernie and the other drug lords in charge.

        You should go and live the ranchos in Caracas to find. Just take taxi to find out what your life is worth. Or try to get a good meal and water. Your opinions of Trump are irrelevant here (I do not like him either). Don’t stray off the subject and learn a little more on about Venezuela (They got excellent Coke there.

      • “who at least secured a clear majority”

        You see, if you knew a thing or two about Venezuelan politics, you would probably know 1) majorities are circumstantial 2) his victory was the product of an electoral fraud 3) because of point 1, Maduro does not have a clear majority.

        Anyway, we all know that the US does not hold national elections, so talking about winning the majority of popular votes in the context of the US electoral system is meaningless and only appeals to the fringe.

        To me Donald Trump, is not a mad man, sure he does have his flaws, and we can argue about Donald Trump’s list of flaws, but at least he has the decency of pointing out what the Maduro government really is, a socialist dictatorship, and I commend Donald Trump for taking the initiative along with other governments in the Americas to pressure the Maduro government to accept a political solution to ensure a peaceful transition back to Democracy.

        Given the leftward turn of the Democratic party, thanks to that idiot of Bernie Sanders! I sincerely doubt that Hillary would had taken a decisive action against Maduro just to appease the progressives.

      • Please, do not engage JudiLynn. She is a troll who infects numerous online forums, and can only be described as a Stalinist/Maoist. She will not respond to your queries. She only does “hit and runs”.

      • …less attacking his own rightfully elected president who at least secured a clear majority.

        Judi Lynn had no problem whatsoever with attacking and bypassing the “rightfully elected” National Assembly, which “at least secured a clear majority.” But that was OK for Judi Lynn because the National Assembly had a clear oppo majority. After all, winning two-thirds of the Assembly seats is no indication that the people support the National Assembly. 🙂

    • Well no. Chavez was not interested in catching kleptocrats because he was their enabler. It does not follow however that Trump IS interested, or he is not one himself. In a modern democracy, the President doesn’t decide who gets investigated and prosecuted.

      In the USA there is still, as I understand it, a separation of executive power and investigative and prosecutorial power at the federal level, however I don’t know if you’ve noticed, but there’s been a serious issue with that since Trump was elected. Trump fired the former FBI director, by his own admission, because of Russia.

      Chavez, by comparison, had Luisa Ortega Diaz, so he didn’t need to do something like that. As I recall from one judge who fled to Panama, they all met on Friday afternoons and decided how things would go down.

      Sort of like Trump inviting Comey in to discuss the Russia investigation and asking for his loyalty. Once you’ve got that, you’ve got a powerful weapon with which to reward your friends and attack your opponents.

      • Do you really want to go there? You don’t know what you’re talking about.

        If Comey was fired because of Russia, and by the way, Russia did WHAT!? Explain it to me!

        If that was the case, why did Hillary supporters ALSO want him fired, because of his unfavorable testimony about Hillary’s e-mails?

        The guy was incompetent and broke all protocols. Latest evidence is he directed exoneration of Hillary’s e-mail crimes BEFORE the witnesses were even interviewed!

        Seriously:

        You’re not looking at this clearly.

    • Funny part, is the failure of the so called “rabbit” plan…

      instead of eating the rabbits, people kept them as pets. According to Maduro, “When he came back, to his surprise he found people had put little bows on their rabbits and were keeping them as pets, it was an early setback to Plan Rabbit.”

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