Thursday, November 8, 2018
By NEIL HARTNELL
Tribune Business Editor
Deltec Bank & Trust yesterday denied that any of those charged in relation to a $1.2bn Venezuelan money laundering scheme was a client or account holder with itself.
The Lyford Cay-based financial institution, in a statement sent to Tribune Business, defended its reputation and integrity after this newspaper revealed that US federal authorities want to seize assets held in bank accounts with itself and Ansbacher (Bahamas) as part of a crackdown on corruption linked to the Nicolas Maduro-led regime.
Pledging that it complies with all anti-financial crime laws “without compromise”, Deltec refuted the contents of a plea agreement reached between US prosecutors and Abraham Edgardo Ortega, who was formerly executive director of financial planning at Venezuela’s state-owned oil company, PDVSA.
Ortega, in his plea agreement with US authorities, agreed to forfeit “all assets on deposit in account/portfolio number 1303311-00 at Deltec Bank & Trust in Nassau, The Bahamas”. He also committed to doing similar with “all assets on deposit in account number 200020600 at Ansbacher Ltd in The Bahamas, held in the name of Greatwalls FS”.
Deltec, though, denied that Ortega or any of the others charged in connection to the money laundering scheme and associated bribery payments had ever been a client or beneficial account owner.
“Deltec wishes to make it abundantly clear that neither Mr Ortega nor any of the other indicted individuals is or was a client of the bank,” the Bahamian financial institution said.
“Further, Deltec wishes to emphasize that at no time was Deltec or any of its officers knowingly involved in any irregularity or implicated in any wrongdoing. Deltec conducts all client relationships in a manner that is fully compliant with all applicable banking laws and regulations, and consistent with its internal policies with respect to sound risk management.
“Deltec works with its regulators on a continual basis, and has strong internal AML (anti-money laundering) and KYC (Know Your Customer) procedures, applied without compromise, to preserve the financial and reputational integrity of the bank and jurisdiction.”
Documents filed with the south Florida federal court allege that a key role in relation to Ortega was played by Gustavo Adolfo Hernandez Frieri, principal of a Miami-headquartered financial services brokerage.
He and Ortega, together with a confidential informant (CS) working for the US government, met in Panama in April 2016 to discuss how $5m in bribes could be concealed and washed clean so the “funds would appear to have been legitimately acquired”.
Hernandez Frieri suggested his “fake mutual fund”, a Cayman Islands-domiciled entity called Global Securities Trade Finance, as the ideal vehicle. He explained it took in money like a normal investment fund to make payments seem legitimate, but then immediately transferred them out, making it appear as if a redemption had been requested.
“On February 24, 2017, the CS instructed Deltec Bank & Trust in Nassau, The Bahamas, where a portion of Ortega’s illicit funds were then held, to subscribe to the fund,” Ortega’s plea agreement alleged.
“On or about February 28, 2017, at the direction of Ortega and Hernandez Fieri, approximately $5m was transferred from an account/portfolio number at Deltec Bank & Trust” to a US financial institution in New Jersey, which held an account for Global Securities Trade Finance, the fake fund.
The $5m was then transferred to another unnamed US financial institution, with the “fake subscription in Global Securities Trade Finance deposited [back] at Deltec Bank, thus making the $5m available to Hernandez Frieri for distribution to Ortega”.