Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 1 of 33 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA No. UNITED STATES OF AMERICA v. FRANCISCO CONVIT GURUCEAGA, et al., Defendants. ----------------------~/ CRIMINAL COVER SHEET 1. Did this matter originate from a matter pending in the Northern Region of the United States Attorney's Office prior to October 14, 2003? _ _ Yes X No 2. Did this matter originate from a matter pending in the Central Region of the United States Attorney's Office prior to September 1, 2007? Yes X No Respectfully submitted, BENJAMIN G. GREENBERG UNITED STATES ATTORNEY BY: ~~~ . ~ FRANCISCO R. MADERAL . ASSISTANT UNITED STATES ATTORNEY Fla. Bar. No. 41481 99 N. E. 4th Street Miami, Florida 33132-2111 TEL (305) 961-9159 FAX (305) 530-7976 francisco.maderal@usdoj .gov Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 2 of 33 AO 91 (Rev. 08/09) Criminal Complaint UNITED STATES DISTRICT COURT for the Southern District of Florida United States of America v. FRANCISCO CONVIT GURUCEAGA, et al., ) ) ) ) ) ) Defendant(s) CRIMINAL COMPLAINT I, the complainant in this case, state that the following is true to the best of my knowledge and belief. On or about the date(s) of Southern District of 12/2014-7/2018 Florida Code Section in the county of Miami-Dade in the , the defendant(s) violated: Offense Description Title 18, United States Code, Sections 1956(h) & 1956(a)(2) Conspiracy to Committ Money Laundering Title 18, United States Code, Section 1952 Interstate and Foreign Travel in Aid of Racketeering Enterprises This criminal complaint is based on these facts: SEE ATTACHED AFFIDAVIT. ';/ Continued on the attached sheet. complainant's si~e George F, Fernandez, S/A, HSI Printed name and title Sworn to before me and signed in my presence. Date: \J(Jb ~ U/ g City and state: Miami, Florida / orres~rU.S. / Magistrate Judge Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 3 of 33 AFFIDAVIT I, GEORGE F. FERNANDEZ, Special Agent with Homeland Security Investigations ("HSI"), having been first duly sworn, do hereby depose and state as follows: INTRODUCTION 1. I am an investigative or law enforcement officer of the United States within the meaning of Section 251 0(7) of Title 18 of the United States Code. That is, I am an officer of the United States who is empowered by law to conduct investigations of, and to'make arrests for, offenses enumerated in Title 18, United States Code, Section 2516(1). / 2. I have not necessarily included in the affidavit eash and every fact known to me about the matters set forth herein, but only those facts and circumstances that I believe are I sufficient to establish probable cause for the Court to s~gn a 'criminal complaint. / 3. The statements contained in this affidavit are based upon my investigation, information provided by other individuals;' including sworn law enforcement officers and / confidential sources, and upon my experience and training <;~.s a federal agent and the experience and training of other federal 4. ag~p.ts. AI1 dates, times, and amounts stated herein are approximate. Quotations and summaries of recorded conversations are based on transcriptions with side-by-side Spanish-toEnglish translations or the actual Spanish-language recordings. In reviewing the transcripts, I relied on both the translations and my knowledge of Spanish, as well as that of others. 5. This affidavit is made in support of a criminal complaint charging the following defendants, with conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h), and violations of the Travel Act, in violation of Title 18, United States Code, Section 1952. Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 4 of 33 Defendants & Others InvolVed 6. Francisco CONVIT Guruceaga is a Venezuelan national. CONVIT, along with CONSPIRATOR 2, is often referred to as a 7. "Bol~chico" or member of the "boliburgues." Jose Vincente AMPARAN Croquer, a.k.a., "Chente" is a Venezuelan national and professional money launderer. AMPARAN is associated, along with CONSPIRATORS 5 and 6, with "European Company 1" in Spain, which is a money laundering front operating as a real estate investment firm. AMPARAN also maintains relationships with "Ewopean Financial Institution 1" in Malta, a private investment firm, which he uses to launder money. 8. Carmelo URDANETA Aqui is a Venezuelan national and former Legal Counsel to the Venezuelan Ministry of Oil and Mining. 9. Abraham Edgardo ORTEGA is a Venezuelan national and former Executive Director of Finance at Venezuelan state-owned oil company, Petr6leos de Venezuela, S.A. / (PDVSA). 10. GUSTAVO Adolfo Hefnandez Frieri is a Colombian national by birth and /.,-- naturalized U.S. citizen (as ofM~y2013). GUSTAVO is a professional money launderer who uses , . his fmancial firms, Global pecurity Advisors (GSA) and Global Strategic Investments, in Miami, Florida, to. launder mpfiey with false-mutual-fund investments. 11. Hugo Andre Ramalho GOIS is a Portuguese national and professional money launderer associated with AMPARAN. 12. I ' Matthias KRULL is a German national and Panamanian resident. KRULL was a high-level banker at a large Swiss bank, specializing in Venezuelan clients. KRULL is the personal banker of CONSPIRATOR 7 and others. KRULL manages "banking" activities for numerous Venezuelan officials and kleptocrats. 2 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 5 of 33 13. Marcelo Federico GUTIERREZ Acosta y Lara is a Uruguayan national. GUTIERREZ is part of an ownership group of at least one U.S. bank that facilitates money laundering and is associated with GUSTAVO. 14. CONSPIRATORS 1- 9 are some of the additional uncharged members of the conspiracy along with others. CONSPIRATORS 1 - 9 include other former PDVSA offiCials, individuals associated with CONVIT, reported members of the "boliburgues," and professional third-party money launderers. 15. / VENEZUELAN OFFICIALS 1-3 are foreign officials, . / PROBABLE CAUSE 16. / In 2016, a Confidential Source (CS) approached the HSI Miami Office (HSI- Miami) regarding 78 million in Euros the CS received, which originated from a loan contract with // PDVSA. The CS was involved in a money laundering conspiracy and wanted to surrender the / money and cooperate. HSI-Miami thereafter began an undercover investigation: Organized Crime / and Drug Enforcement Task Force (OCDETF) Operation Money Flight. 17. The CS agreed to,wear a recording device and Operation Money Flight proceeded ~··· proactively with an initial focus on the defendants' efforts to launder a portion of the 78 million in Euros (the "PDVSA Ntids") in and through South Florida. 18. 1/Wo years and over one hundred recordings later, Operation Money Flight revealed an international conspiracy to launder the PDVSA funds through Miami and several large-scale, international third-party money-laundering organizations. More specifically, the investigation revealed the use of Miami real estate and sophisticated false-investment schemes to launder hundreds ofmillions ofU.S. Dollars. 3 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 6 of 33 Venezuelan Corruption & MiamiLaundering 19. Venezuela has a foreign-currency exchange system under which the government 'will exchange local currency (Bolivars) at a fixed rate for U.S. Dollars. The fixed exchange rate has been well below the true economic rate by a substantial factor for several years. For example, in 2014, the Venezuelan government fixed exchange rate was approximately six Bolivars to one U.S. Dollar. By contrast, the true economic exchange rate was approximately sixty Bolivars to one U.S. Dollar. 20. / 1 The difference between the fixed rate and the true .economic rate creates / opportunity for fraud and abuse. ,/ 21. For example, in 2014, an individual could.exchange 10 million U.S. Dollars for 600 million Bolivars at the true economic rate. Then, if that individual had access to the / government fixed rate, he could convert that same/ 600 million Bolivars into 100 million U.S. Dollars. Essentially, in two transactions, that"person could buy 100 million U.S. Dollars for 10 / million U.S. Dollars. 22. Massive fraud anq c~rruption is rampant throughout Venezuela's government-run ..' foreign-exchange system. ~stimates of the fraud range as high as $20 billion a year, and reports indicate that corrupt government officials take kickbacks to authorize exchanges at the fixed rate. 1 / 23. Embezzlement of Venezuela's dwindling foreign currency reserves is the fuel for these corrupt exchange schemes. PDVSA is Venezuela's primary source of income and foreign currency (namely, U.S. Dollars and Euro1?), and serves as the source of foreign currency used to 1 Reuters, Venezuela Says 40 Percent of Dollar Buyers Are Shell Companies, Dec. 12, 2013, available at http://www.reuters.com/article/us-venezuela-economy-idUSBRE9BBOT820 131212 4 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 7 of 33 fund corrupt foreign exchange embezzlement schemes. As with Venezuela in general, fraud and corruption is reportedly common at PDVSA. 24. Venezuela's state of social, political, and economic crisis in which multi-billion- Dollar corrupt and criminal ecosystems thrive drives rivers of criminal proceeds through South Florida, which has become an international money-laundering hub and a desirable destination for well-to-do foreign criminals _and kleptocrats. False-Investment Money Laundering 25. Most of the def~ndants / are sophisticated operators with r~spect to the international banking system and are aware of banks' general due diligence ~nd anti-money laundering ./· practices, including know-your-customer (KYC) requirements: 26. Importantly, for one party to wire funds to a third party, there must be some / legitimate business justification provided to the bank; for instance, a payment for the purchase of real estate or equipment. Moreover, a bank will ask for documents supporting the justification, which-depending on the transaction~an be difficult to manufacture; for instance, a bank may ./ . be able to verify whether a supppsed real estate transaction took place. This verification poses a ./ problem for money laund~ng transactions in which large, sums of criminal proceeds must be moved around the finaflcial system from one person to another as bribes, kickbacks, transfers, or exorbitant expenditures, for instance. 27. Accordingly, false investments in fake securities are convenient justifications in that they are more difficult for a bank to investigate and verify. By way of example, one party might wire 30 million U.S. Dollars to a third party with the justification that the amount is a loan to the third party, supported by a 30 million U.S. Dollar promissory note due at some point in the 5 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 8 of 33 future, which neither party actually intends to honor. For the bank, ascertaining the true intent of the parties and the fraudulent nature of the investment is difficult. 28. Sophisticated false-investment money laundering schemes are used throughout this conspiracy, ranging from individual false securities (promissory notes and bonds) to entire falseinvestment funds, which can be subscribed to as needed to justify transactions. 29. Surrounding and supporting these false-investment laundering schemes are complicit money managers, brokerage firms, banks, and real estate investment :firms in the United States and elsewhere, operating as a network of professional money launderers. / Money Laundering Conspiracy .-<'· 30. The conspiracy in this case began in December 2014 with a currency exchange scheme to embezzle approximately 600 million U.S. Dollars from PDVSA, obtained through / bribery and fraud, and the defendants' efforts to use the CS to launder a portion of the proceeds of that scheme (the PDVSA funds). By May of2015, the conspiracy had doubled in amount to 1.2 ' / billion U.S. Dollars embezzled from PDVSA. 31. The facts of the conspiracy set forth below are evidenced by electronic ./ communications and docgments, government records, financial records, recordings of phone conversations and in-person meetings, and CS statements. / 32. CONVIT & URDANETA Approach the CS In 2014, URDANETA and CONVIT approached the CS with an offer to sell 100 million U.S. Dollars at a favorable Bolivar exchange rate and without the CS having to front the Bolivars. 6 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD J Docket 07/24/2018 Page 9 of 33 33. The CS agreed because the CS had clients in Venezuela to whom the CS could sell the U.S. Dollars. From previous business dealings, the CS knew CONVIT obtained U.S. Dollars from exchange contracts with PDVSA. 34. The CS expected to receive a simple buyer-seller foreign exchange ("forex") contract to memorialize the agreement with CONVIT and URDANETA. CS 35. Over the course of the next month, January 2015, CONVIT, URDANETA, and the ~continued to discuss and facilitate the supposed forex transaction, oftE;n via BlackBerry Messenger (BBM) chats and while CONVIT was present in the Southern District of Florida, / according to U.S. travel and other records. 2 36. During this time, CONVIT delayed providing the forex contract to the CS, but this ' did not overly concern the CS because the funds were coming from a regulated asset management / firm, "European Financial Institution 1," which the CS could explain to the receiving bank. 37. The CS instructed CONVIT to/wire the funds from European Financial Institution 1 to an account belonging to a trust, ofwfuch the CS was the ultimate beneficiary. CONVIT agreed and informed the CS that the 38. fun,4S.~ould arrj.ve in Euros and not U.S. Dollars. By February 12, 2015, the CS had received approximately 78.8 million Euros into the trust from Europef!.n Financial Institution 1 in four separate wire transfers beginning on January 14, 2015. / I 39. After receiving the initial 36 million Euros in mid-January, the CS asked CONVIT via BBM chat on January 13, 2015 if the CS could sell about 20 million Euros to a client, but CONVIT replied "no." CONVIT explained that he had already paid for the Bolivars on his end 2 According to these records, CONVIT arrived in the Southern District of Florida on December 20, 2014 and departed on January 18, 2015. 7 J Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 10 of 33 (meaning he had no immediate need for Bolivars), and that the CS would have to wait about a month to sell the Euros further. I 40. On February 6, 2015, the CS informed CONVIT that the CS urgently needed the forex contraCt between the CS and European Financial Institution 1 for the CS 's bank's compliance department. The CS asked CONVIT for a form draft so that the CS could prepare it. 41. That same day, CONVIT finally sent the CS a (PDF) document to justify the transfer between European Financial Institution 1 and the CS's trust. W4at CONVIT sent, however, was a false joint venture contract between a Hong Kong shell company, Eaton Global Services Limited, and the CS's trust, with a forged signature on behalfofthe CS's trustee. The CS ../·· had never seen this contract before. 42. The fake joint venture contract, dated December 17, 2014, contemplated a fictitious // 600 million U.S. Dollar joint venture between Eaton Global and the CS's trust; the supposed business of the joint venture was the making ofloans to PDVSA; 43. / On February 9, 2015, the CS told CONVIT that the fake joint venture contract could J not be used. CONVIT and URDA~ETA assured the CS that the fake contract had not been used / or provided to any bank. / 44. The CSC' also requested the original underlying exchange contracts and CONVIT responded that URDANET A had physical copies and would deliver them. Days later in Venezuela, the CS received the documents in-person from URDANETA, who explained that he obtained the ' documents from "CONSPIRATOR 1," a former PDVSA official. \ 45. These documents, which the CS provided to HSI-Miami, reveal the source of the PDVSA funds and the nature of the scheme. 8 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 11 of 33 PDVSA Bribery & Embezzlement .Scheme Revealed 46. The source of the PDVSA funds was a PDVSA foreign-currency exchange scheme I benefitting Eaton Global. The exchange scheme 'was disguised as a "financing" arrangement using the follc::>wing three documents (provided by URDANETA) in an artless attempt to hide what was ultimately revealed as an embezzlement: a. First, 'a loan contract, dated December 17, 2014, between PDVSA . and Rantor Capital C.A., a Venezuelan shell company, in which Ranto.ragreed to loan 7.2 billion Bolivars to PDVSA. The loan contract was executed by "VENEZUELAN OFFICIAL 1" as Vice President ofPDVSA; / .. b. Second, an assignment contract, dated December 23,2014, between Rantor and Eaton Global, in which Rantor assigns its rights as PDVSA's creditor / under the loan contract to Eaton Global and in which it is contemplated that PDVSA is given the right to cancel the debt within 180 days by paying 600 million U.S. / Dollars; and ~/· c. Third, a ~otice of assignment letter, dated December 23, 2014, in which Eaton Global informs PDVSA (VENEZUELAN OFFICIAL 1) of the / . assignment arlCrsuggests that PDVSA repay the 7.2 billion Bolivar loan in the Eurp , equivalent of600 million U.S. Dollars. The letter included instructions for PDVSA to wire the funds to European Financial Institution 1 accounts for the benefit of Eaton Global. 4 7. In short, Eaton Global ended up with the right to pay PDVSA about 7.2 billion Bolivars (worth around 35 million Euros) and receive about 510 million Euros, of which about 78.8 million Euros was sent to the CS. 9 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 12 of 33 48. While the CS continued to wait for a forex contract from CONVIT and URDANETA, the CS began to conduct third-party transactions on their and CONSPIRATOR 1 's behalf. Ultimately, the CS learned that the CS was not involved in a forex transaction, but rather a money laundering operation in which the CS was expected to launder the proceeds of the embezzlement and make cash kickback payments to VENEZUELAN OFFICIAL 1. 49. ;rn April2015, the CS began making cash payments in Venezuela at URDANETA and CONSPIRATOR 1 's direction, including to URDANETA, CONSPIRATOR 1, and VENEZUELAN OFFICIAL 1, which would-ultimately total over 1 mill~ortU.S. Dollars. 50. / In all, the CS conducted approximately 15 million Euros-worth of transactions through the summer of 2015, including several U.S.-Dollar wire transactions at the defendants' direction, 3 until the CS began to resist making further payments. Around that time, the CS used // the liquidation of the CS 's trustee as an excuse to halt payments; the CS claimed that the CS could not continue without the forex contract. CONVIT and URDANETA continued to pressure the CS. The ensuing impasse led to a meeting arbund November 2015 at CONVIT's office in Venezuela. 51. Around Novemb~r 2015, CONVIT summoned the CS to a meeting at CONVIT's office in Caracas, Venezue!a. Prior to the meeting, CONVIT explained to the CS that the CS would meet AMPARAN, who was in charge of the financial documents. \ 52. A:t the meeting, CONVIT, URDANETA, AMPARAN, and the CS sat around a table. CONVIT had a handgun on the table. Next to CONVIT was a German Shepard with a shock collar. CONVIT held the remote for the collar, and commented that he could not always control 3 Based upon my training and experience, I know that international U.S.-Dollar wire transactions are routed and processed through banks located in the United States. 10 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 13 of 33 the dog. The meeting took place at CONVIT's office with numerous security guards; according to the CS, the mood was one of intimidation by CONVIT. 53. AMPARAN told the CS that the fake joint venture contract -had in fact been ' provided to European Financial Institution 1 's banks in Canada and Malta. Accordingly, ( AMPARAN explained that it would be impossible to replace the contract with a simple forex contract and additional fake contracts were needed. The CS asked to return the PDVSA funds and reverse the transactions, but was told a reversal was impossible. ,/ The CS Records the Defendants 54. Beginning in February 2016, the CS recorded convefsations with the defendants and other conspirators in which they explicitly acknowledged'the money laundering conspiracy and underlying embezzlement. As evidence by the following recordings, during this time, the CS / worked with URDANETA, ORTEGA, and CONSPIRATOR 1 to account for ~nd distribute the PDVSA :fi.l'nds to themselves and others and/to ensure that AMPARAN supplied the additional fake contracts necessary to do so. 55. / In a·February 19,_26'16 recorded meet with URDANETA, the CS complained that ' .~ the CS needed additional)locuments from AMPARAN. URDANETA agreed and said that he would write to AMP:ARAN, CONVIT and "CONSPIRATOR 2" to "bug them" about the contracts. URDANETA also stated that they (CONVIT, et al.) are being "hit right now" by people in the "assembly'' and joked that it is not a "pi:fiata," in an apparent reference to corrupt Venezuelan officials hitting the defenda~ts up for bribes. URDANETA also stated that he would not go to the United States because the last time he was searched at the border and "they took away [his] phone. [And t]hank God [he] didn't have [his] phone, but a new phone." 11 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 14 of 33 56. In a February 22, 2016 recorded meet with ORTEGA, ORTEGA and the CS discussed how to move ORTEGA's money from the CS to ORTEGA. The CS explained that it is not simple, and ORTEGA, regarding the source ofhis portion of the PDVSA funds, stated: So we can be frank and open with each other. Now. You know the origin of that. And that comes from ... from something that is still making noise and it's still making noise and it's still making noise. It's going to explode one day. I_ mean, maybe not tomorrow, and also, it's not the ... our friend, the leader in all this, he is everywhere every day ORTEGA also acknowledged CONSPIRATOR 1 's4 role in assigning him a portion of the PDVSA funds and fretted aloud: It's all that shit they've been talking about, investigatiorls and shit. Or the Americans going into all this, is that true? How far does tliat reach? But, how far could they get, in your opinion? If they get to the Swiss and they tell them, "I want, I want this information." Do they have to give it to them? Finally, the CS and ORTEGA walked through some'account opening forms and discussrd how ORTEGA could avoid declaring himself as a politically exposed person (also known as a PEP) on bank KYC documents. 57. / In a February 23;~ 2016 recorded conversation with "CONSPIRATOR 3" (CONSPIRATOR 1's brother), the CS explained that the CS's trustee is liquidating and / "eventually there's a risk ofthe trustee checking the operation" and finding that the "the guys did . ? a fake deal, falsifying the signatures of these guys who are there." The CS explained that the CS called URDANET A and CONSPIRATOR 1 and told them that they have to set the documentation straight. The CS and CONSPIRATOR 3 also discussed a meeting in Caracas between the CS, ' ' URDANETA, and AMPARAN about fixing the document, and CONSPIRATOR 3 noted that he has a "payment for [VENEZUELAN OFFICIAL 1]." 4 CONSPIRATOR 1 is a former PDVSA official. 12 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 15 of 33 \ 58. In a March 7, 2016 recorded meet with URDANETA, the CS and URDANETA recounted the receipt and expenditure of the PDVSA funds to date ("seventy eight million eight hundred and something"). They recounted how much belonged to CONSPIRATOR 1 ("fourteen > million five hundred forty thousand six hundred twenty-five") and other expenditures, including a list of cash payments to include payments to VENEZUELAN OFFICIAL 1 who authorized the i underlying PDVSA loan agreement. The CS recounted the cash kickbacks to VENEZUELAN OFFICIAL 1 as follows: / [VENEZUELAN OFFICIAL 1], I gave him ... to the boy he sent,in one occasion two hundred thousand [200,000], June fourth [4th] and in another occasion one hundred thousand [100,000], on June twenty sixth [26th]. . / URDANETA agreed. URDANETA and the CS then discuss~d AMPARAN's plan to make new fake contracts justifying the transaction (the CS noted to URDANETA that AMPARA~ is flying / to Miami in several days). URDANETA was concerned that he didn't want to leave a trail of "breadcrumbs" with respect to the accounts. URDANETA again acknowledged CONVIT's ) involvement and CONSPIRATOR 1 's a:rfangement with ORTEGA. CONSPIRATOR 1 joined the meeting and discussed with URDANETA and the CS the fake joint venture contract, who was ··' responsible for it, and how to divide up the PDVSA funds. / 59. Impoft:ailtly, at this meeting, URDANETA and CONSPIRATOR 1 reviewed a spreadsheet of ~11 the cash payments and expenditures created by the CS; each acknowledged the contents of the document, wrote notes on it, checked off transactions, and, ultimately, dated it. The CS provided a copy of this document to HSI-Miami with both URDANETA and CONSPIRATOR 1 's handwritten notes; included on the spreadsheet are the kickback payments to VENEZUELAN OFFICIAL 1. 60. In a March 9, 2016 recorded meet with AMPARAN and URDANETA, AMPARAN ran through the plan to replace the fake join:t venture agreement with new documents. 13 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 16 of 33 AMPARAN explained that the fake agreement could be replaced with the new (better) fake ones in the compliance file at the Canadian bank and added to the file at European Financial Institution 1, and further that the "Accounting Firm 1" auditors are on board. AMPARAN explained that he is flying to Miami the next day and from there he will print out and provide the CS with the new fake contracts. 61. In a March 15, 2016 recorded meet with ORTEGA, ORTEGA explained to the CS "st~cture" that he has found a "person" (GUSTAVO) with a to transfer his/PDVSA funds to ORTEGA, and asks the CS to meet with the person in New Y9rk, Miami; or Panama. ORTEGA asked the CS what the CS 's story is and why the CS is acting differently "overnight" and whether /' it is "an investigation"; the CS explained that everyone is '5making messes," that the CS has "start[ed] to find out about stuff ... the [CS] didn't know," and that the CS is stopping because the // CS doesn't want to get into trouble. ORTEGA explained that the rumor is that the "Americans are investigating you, that you are in big troulSle" and asked the CS whether the CS is under investigation and what the banks have asked the CS. 62. In an April 2, 2916/recorded meet with ORTEGA and GUSTAVO in Panama, ORTEGA introduced the c;s to GUSTAVO, who explained how he can launder money using his brokerage firm and private mutual fund. Specifically, GUSTAVO explained that his brokerage firm, GSA, operates from the United States, but primarily does business in Latin America and manages $2 billion. 5 Regarding GSA's reputation, GUSTAVO explained: I would say that our profile, would be by-by nature a business that we prioritized the type of client with which we deal, uh .. .let's say if it is a low profile, we go even 5 I am further aware, that GSA is affiliated with Global Strategic Investments, LLC (GSI), which is a broker/dealer headquartered in Miami, Florida. GUSTAVO and the CS would later conduct numerous meetings at GSI's office in Miami. 14 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 17 of 33 lower, that way they will never talk about us, or any advertising, or any cocktail parties. · GUSTAVO explained that they operate a fake mutual fund which receives money from a payment made to look like an investment into the fund, but is actually laundered out of the fund. GUSTAVO explained that "we'll make the transactions in such a way that the purchase will look legitimate" imd that the money can be directed anywhere on the back-end using "cards" or "checks" or even "wire transfers," but as to the latter he (GUSTAVO) will "always be on the loqkout to see the / transfer and who's receiving it, because ... [l]ike the saying·goes, the fish dies by its mouth .... they have their eyes on everyone." GUSTAVO went on to explain how he can avoid being tracked by / the authorities such as Interpol and acknowledged that ORTEGA and the CS's situation is a "time bomb." Finally, GUSTAVO insisted that they use WhatsApp to communicate and avoid emails. 6 Cooperation Begins & Conspiracy Continues in Miami / 63. In April 2016, the CS began cooperating with HSI-Miami and continued making / consensual recordings with the defendants and other conspirators. / 64. The conspiracy conti,nued in four primary aspects. First, AMPARAN worked to . / replace the fake joint venture contact with better fake contracts to justify the initial transfers to the CS. Second, AMPARAN Worked to launder URDANETA's portion of the PDVSA funds-from / the CS using false investments. Third, GUSTAVO worked to launder ORTEGA's portion ofthe / PDVSA funds from the CS, also using false investments. And fourth, KRULL and GUSTAVO worked to launder additional PDVSA funds that did not originally flow through the CS. 6 Based on my training and experience, encrypted peer-to-peer chat services, such as WhatsApp, are preferred by individuals engaged in criminal activity because law enforcement is generally unable to obtain the content of the communications from the service provider. 15 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 18 of 33 65. During the course of this conspiracy, GUSTAVO also laundered funds as part of a scheme to promote international narcotics trafficking. KRULL also contacted the CS with several separate plans to launder money from at least one foreign bribery scheme, all as set forth below. AMPARAN's Replacement of the Fake Joint Venture Contract 66. In a recorded April 27, 2016 meet with AMPARAN at the Miami, Florida office of Solar Cargo, Inc./ AMPARAN and the CS discussed the fake joint venture contract and AMPARAN acknowledged that it was meant to justify the movement of the PJ)VSA funds to the CS and that CONVIT was involved. AMPARAN assured the CS not t9/worry about European Financial Institution 1 and the fake contract because European Finqnclal Institution 1 will let him - / know if there is an investigation and AMPARAN "can manipulate that." AMPARAN and the CS discussed supplemental fake contracts AMPARAN had previously prepared and provided. AMPARAN also began to explain how he will launder URDANETA's portion of the PDVSA / funds using fake bonds. 67. On or around May 26, 2016, the CS received a BBM chat from AMPARAN instructing him where in Venezuxlurce of funds. On November 8, 2016; ··KRULL explained that he had the contract. In a November 17, 2016 WhatsApp chat, KRULL asked if the CS had "the hush" // (meaning hushmail, an encrypted email provider), and the GS provided a hushmail addr€?ss. That same day a PDVSA loan contract arrived at tne CS's hushmail account. 97. The PDVSA contract tha(the CS received from KRULL was an amendment to the original contract between PDV~.A~nd Rantor, and doubled the credit line from 7.2 to 14 billion Bolivars. The amendmen~was dated May 25, 2015, and specifically incorporated the initial PDVSA loan contract/ 98. Over the course of the next few weeks, KRULL continued to press the issue over WhatsApp chats, explaining his client was in a "hurry." On November 30, 2016, the CS and KRULL met again in Panama. Per the CS, KRULL explained that the funds came from exchange contracts which generated around 1.2 billion U.S. Dollars. KRULL explained that, in addition to 12 CONSPIRATOR 7 is another reported billionaire member of the "boliburgues" and owner of a television network in Venezuela. 25 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 28 of 33 the 600-million-Dollar solution for CONSPIRATOR 7, KRULL needed an additional solution for 200 million U.S. Dollars held in European Financial Institution 1 in the name of a straw owner, ' l . "CONSPIRATOR 8." (The CS recognized CONSPIRATOR 8 as a straw owner previously proposed to be used to conceal money for the stepsons of VENEZUELAN OFFICIAL 2, a.k.a, "los chamos," during a prior meeting with the CONSPIRATOR 8, CONVIT, and "los chamos.") 99. On November 30, 2016, KRULL sent the CS a WhatsApp message with photos of CONSPIRATORS 7 and 8's Venezuelan passports. KRULL also forwarded ~n email to the CS explaining the European Financial Institution 1 structure; the email was in fact a string of previously forwarded emails attaching documents from Europea~. Ffuancial Institution 1, which / had been s~nt from AMPARAN to "CONSPIRATOR 9," to CONSPIRATOR 7, to KRULL, and to the CS. 100. In early December 2016, the CS informed KRULL of a solution for laundering the additional PDVSA funds. The CS ultimatelypfoposed GUSTAVO andliis mutual-fundlaundering . / solutiOn. On December 21, 2016, KRULL sent the CS a resume for CONSPIRATOR 8, whom /"' KRULL referred to as his "bud~y." In a later recorded January 7, 2017 phone call with KRULL, the CS explained that he cguld not use the CONSPIRATOR 8 resume, noting "this shit is a joke." KRULL agreed, "Ye~(it's a joke .... I agree, I agree." 101. In" a recorded January 9, 2017 meet with GUSTAVO in Miami, the CS asked GUSTAVO for a solution similar to ORTEGA's for CONSPIRATORS 7 & 8, and GUSTAVO immediately agreed. GUSTAVO noted that CONSPIRATOR 7 has one of the wealthiest fortunes ---. - from the "chavismo." GUSTAVO walked through all the different laundering options for both and how to handle any "KYC" issues. KRULL later agreed to the solution presented by GUSTAVO, and in BBM chats would acknowledge "Gustavo" when inquiring of the status. The CS and 26 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 29 of 33 KRULL and the CS and GUSTAVO had numerous recorded conversations and message chats about the scheme over the course of months. 102. In a January 10, 2017 recorded _conversation, KRULL noted that "[CONSPIRATOR 7]" is asking if the money can be sent. In another, on January 23, 2017, KRULL said · the money at European Financial Institution 1 is ready to be moved to CONSPIRATOR 8 and that'"I met the dude, and also met the guy that represents him." The CS asked, "Are these the guy's sons?" (meaning the stepsons of VENEZUELAN OFFICIAL 2), and KRULL responded, "Nah. Don't, don't, don't ask." 103. In a January 31, 201 7 recorded call, the CS informed and both discuss the laundering further. kRULL that he is in Miami KRULL acknowledged receiving money from the European Financial Institution 1 accounts before (i.e., other laundering activity) when he described how the wires work. 104. On March 7, 2017, KRULL sent the CS a WhatsApp chat and explained that the clients are asking about GUSTAVO's fuiid being in the United States. In a March 7, 2017 recorded ..-··'' call, KRULL advised that "[CO~SPIRATOR 7]" is worried, and the CS explained that the fund .-" is not in the United States,/but that GUSTAVO has offices in the United States (Miami and New York). The CS explaitied that GUSTAVO lives in Miami. KRULL asked if GUSTAVO qan fly to Panama, and the-CS assured KRULL he could. 105. ·on March 16, 2017, the CS met with KRULL and CONSPIRATOR 8 in Panama, and at one point called GUSTAVO (who was not in Panama) to discuss the laundering operation. During the meeting, CONSPIRATOR 8 stated that he "represented three persons." After the - meeting, KRULL confided to the CS that he had once seen CONSPIRATOR 8 at CONSPIRATOR 7's office having lunch with "los chamos," i.e., the stepsons of VENEZUELAN OFFICIAL 2. 27 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 30 of 33 106. In a recorded AprilS, 2017 call with KRULL, KRULL stated that CONSPIRATOR 8 was worried about wiring funds to purchase GUSTAVO's fraudulent fund to U.S. Financial Institution 1 in New Jersey because he was worried about using U.S. banks. KRULL explained t1iat he told CONSPIRATOR 8 it was irrelevant because all U.S. Dollar wire transactions travel through correspondent banks in the United States regardless. 107. In a recorded April 14, 2017 meet in Miami with KRULL, KRULL and the CS discussed GUSTAVO and CONSPIRATOR 7 and the plan to launder the other/PDVSA funds. 108. GUSTAVO and KRULL would continue to discuss this scheme with the CS for months thereafter. For instance, in a recorded call with KRULL on August 2, 2017, the CS told ...--· KRULL, "I am going to be with GUSTAVO tomorrow ... and he's going to ask me about the fund with the children." KRULL explained that he is not sure, but that "CONSPIRATOR 7" may be / doing something on it with "Chente" (AMPARAN) and explained that he (KRULL) speaks mostly to "[CONSPIRATOR 8]" about it because he is "the client." 109. Records obtained from em:'ail search warrants confirm the flow of the PDVSA funds ' / from PDVSA to· the defendants .Jnid other conspirators through European Financial Institution 1. For instance, a September ~Oi5 email circulated among AMPARAN and CONSPIRATORS 5 and 6 with the subject line/''Numeros [CONSPIRATOR 7]" includes an attachment titled "Operation ., 600k," which contains the following work sheets: a. A work sheet titled "Detailed Income from PDVSA" shows ten transfers from PDVSA from December 29, 2014 through February 3, 2015 totaling 511,913,270.74 Euros. b. A work sheet titled "Summary of the 600 Operation'; shows that, of the 511 million Euros: 20,476,530.83 was assigned to European Financial 28 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 31 of 33 Institution 1 as a 4% fee; 227,265,537.52 Euros went to the "BOLl" (CONVIT and CONSPIRATOR 2); 159,085,876.26 Euros went to "CHAMOS" (the stepsons of VENEZUELAN OFFICIAL 2); and 68,179,661.26 Euros went to CONSPIRATOR 7. The remaining 36,905,664.87 Euros was accounted for as the "Cost" ofthe initial 7.2 billion Bolivars used to obtain the 511 million Euros. c. Further worksheets account for how each recipient moved the money. The "BOLl" for instance moved 78.8 million Euros to the qs and the majority of the rest through apparent shell companies, Volbqr Vontobel and / Vencon Holding. CONSPIRATOR 7 sent dozens of U.S. Dollar wires through _/.· banks in Malta and Austria, including to aviation and yacht services as well as brokerage companies in Miami, Florida. These records not only exhibit the conspiracy in bl't detail, but confirm the connection among KRULL and the additional conspirators and the initial 78.8 million Euros in PDVSA funds / received by the CS. ' / : KRULL's Additional Venezuelan Laundering Schemes / 110. Throughout/the course of KRULL's scheme to launder the additional PDVSA funds with the CS, KRULL presented other laundering schemes to the CS; One of the schemes involved a relati.ve of VENEZUELAN OFFICIAL 3 who needed ~_way to receive kickbacks from foreign law firms who had been hired by the Government of Ven~zuela. 111. KRULL first approached the CS with this scheme in the summer of 2017 because KRULL needed a laundering structure for receiving the kickbacks. Both KRULL and the CS agreed that GUSTAVO was again a good laundering option. 29 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 32 of 33 112. On June 29, 2017, KRULL called the CS and, in a recorded conversation, the CS told KRULL that he is in Los Angeles, California. KRULL said he has to be "candid and direct" and stated: Uh, I'm sitting here with, with, with, with the [title of VENEZUELAN OFFICIAL 3]'s brother .... And, and, and well, they, they, they have earn:ed in the last years a payment they're going to receive that is for five [5] .... 0kay? And, and, and we have been talking about the, the, the options they, they might have. Right? And, and, and I don't know if, if, if you have something that you, that you might think of, as to how it can be, uh, things can be structured. Right? 113. / The CS noted that it may be difficult based on the recipient's.profile, but said they ' can talk more t9morrow and explained he will be flying to Miami then. In a later recorded call on / June 29, 2017, KRULL further specified that these were payments from law firms that had handled international arbitrations on the Venezuelan government's behalf with international companies and had charged the government a lot of money (5,000,~00 U.S. Dollars). In a recorded call the next day, June 30,2018, the CS, KRULL, and VENEZUELAN OFFICIAL 3's brother discussed ways / ' to launder the payment which was again explicitly described as payments deriving from law firms / who represented Venezuelan gov~l11lllent in arbitrations. Different options for laundering the payments and "KY~" requirel)lents were discussed. 114. In a recorded August 25, 2017 meet with GUSTAVO in Miami: the CS explained / that KRULL had two clients related to VENEZUELAN OFFICIAL 3 who needed a way to launder / the payments they are going to receive from attorneys who were hired by the Venezuelan government. The CS specifically stated "the lawyers are giving them their. kick backs" and GUSTAVO responded, "Mm-hmmm." The CS then suggested that the lawyers themselves would pay the kickback, and GUSTAVO immediately corrected him: No, they can't pay these two [2] guys. No, that's impossible .... Just imagine. Specially nowadays with OFAC, and with all of these people reviewing every money transfer every day..... Brother, that's kindergarten Algebra. Right? Well, 30 Case 1:18-cr-20685-KMW Document 3 Entered on FLSD Docket 07/24/2018 Page 33 of 33 we will have to give a vehicle to each one of these guys ... A private fund ... The same thing we did for [ORTEGA]. 115. In recorded meetings on August 29,2017 and November 14,2017 with KRULL in Miami, the CS and KRULL further discussed the kick-back laundering scheme. CONCLUSION 116. Based on the foregoing, probable cause exists that the defendants conspired to launder monetary instruments, in violation of Title 18, United States Code, Section 1956(h), and /. did travel in and use facilities of interstate and foreign commerce to further the laundering activities, in violation of Title 18, United States Code, Section 1952. . / · Respectfully submitted, GEORGE F. RNAN , SPECIAL AGENT, / HOMELAND SECURITY INVESTIGATIONS / Sw~d subscribed before me .~thi ClayofJuly,~018 . . ./ ~/ ·~·~ 7 WINiiTORRES ./ =rsTAT~S MAGISTRATE JUDGE 31