Argentine court investigating account of former Chavista official for alleged bribes by Argentine businessman

RIO DE JANEIRO, BRAZIL – The Levy case, which is investigating corruption in connection with million-dollar aire sales of an Argentine entrepreneur to Venezuela, could be just bait. The Argentine court is investigating the transfer of funds of a Chavista official from Panama to bank accounts in Uruguay with connections in the United States.

Argentine Judge Marcelo Aguinsky sent a letter of request to Uruguay in an attempt to determine if these funds could be related to an alleged payment of bribes for the signing of contracts with Argentine businessman Juan José Levy, who exported products worth US$500 million to Venezuela during the Kirchnerism period.

The case involves Eddie Elizabeth Betancourt Romero, former president of Suministros Venezolanos Industriales C.A. (Suvinca), who endorsed the purchase of products such as fabric softener or shampoo, among others, for US$120 million, supplied by the Argentine businessman. The contract was signed in Caracas with the endorsement of the then Minister of the People’s Power for Commerce Richard Canan.

The Financial Information Unit (UIF) notified the Argentine court that Betancourt Romero in 2014 received 3 transfers from Panama to one of her accounts in Uruguay’s Bandes bank, as reconstructed by Infobae based on judicial sources. The total amount of transfers would reach US$205,000.

The official explanation to justify the transfers was the alleged sale of a property of the former Venezuelan official. But the Argentine authorities found in their financial intelligence report that the money transfers were suspicious because the amount of the alleged property sale did not coincide with the amount transferred by the buyers. Moreover, the money transfers would not have been made from the buyers’ bank accounts, they said.

“A letter of request was sent to Uruguay a year ago, but no response has been forthcoming. More information is needed to move forward,” the court said. The UIF, which is a plaintiff in the case, received information on these transactions through international financial intelligence cooperation and reported them to the courts in 2020.

Judge Aguinsky requested the neighboring country’s cooperation to confirm this information, but Uruguay has not responded so far. The magistrate two weeks ago again urged the Ministry of Foreign Affairs to push for a response to this request, judicial sources reported.

It would not be the first time that a case investigating corruption in Venezuela has been met with a lack of international cooperation. In the same Levy case, the same judge sent a letter of request (and a dozen claims) 4 years ago to Venezuela, which was never answered by the Venezuelan justice system.

The letter sent to Uruguay also highlights relevant data on the identity of the people who transferred these funds from Panama to the Chavista official, information necessary to determine whether this transfer was indeed linked to the Levy case or if it was simply a shady operation.

In addition to these 3 transfers made from Panama, UIF detected other bank accounts in Uruguay and in the United States whose final beneficiary is former Venezuelan official Betancourt. The authorities recorded transfers of funds between her own accounts also in 2014. The most striking was a transfer from her account in Uruguay to another in the U.S. Mercantil Commercebank, sources said.

CONTRACTS WITH SUVINCA

Levy was a businessman far from the Buenos Aires elite until he began to sell products to Venezuela under the umbrella of the bilateral agreement signed by Hugo Chávez and Néstor Kirchner. Laboratorio Esme manufactured products such as toothpaste, but its owner’s business diversified to sell to the Venezuelan state. Levy became an intermediary of several products that he did not manufacture, but that he resold at high prices to Suvinca and other Venezuelan agencies.

Laboratorio Esme signed contracts with Suvinca while Betancourt was its president. The initial contract was reportedly agreed in 2011, but with several addenda, the commercial relationship was extended until, in 2012, contracts worth US$120 million were signed. The key to access these contracts would have been his closeness to José María Olazagasti, the private secretary of then Minister Julio De Vido.

An AFIP report included in the case file alerted about potential irregularities in these operations. “Top Win fabric softener for 4 liters was quoted at US$6.70 per unit, while the same product was sold to Chile at US$2.60 per unit. In other words, the price difference is around 154%,” the document states.

In addition, the court also detailed the maneuvers to outsource the products that Laboratorio Esme exported to Venezuela. The authorities found that Levy bought goods from an Argentine supplier and resold those same products at a price that yielded extraordinary profits. “The dollarized difference between exports and purchases in the domestic market of the products exported is US$18.2 million. The increase of the exported amount compared to the purchase amount in the domestic market is 281.35%,” they stated.

WHY WERE SALES TO VENEZUELA MORE EXPENSIVE?

Several companies involved in the bilateral trust with Argentina indicated that exports to that country were subject to different risks, among them, default by the buyer. However, the bilateral agreement established that the Venezuelan state paid 60% of the contracts in advance.

Laboratorio Esme received payments for over US$62 million in advance from Suvinca between 2011 and 2012, according to a Central Bank report. The Argentine businessman also accumulated millions for more purchases made through other companies such as Grupo Núcleo and Corporación Gulfos, mostly through the bilateral scheme managed by Nación Fideicomisos.

After selling to Venezuela, Levy’s assets took a 180-degree turn. His sworn statement before the AFIP reflected his net worth: he declared US$1 million in assets back in 2011. Five years later, Levy joined the tax compliance program to launder a net worth of US$1.4 billion. During those years, his companies invoiced sales for over US$500 million to Venezuela.

THE CASE

Levy is being investigated for money laundering and transnational bribery in the Economic Criminal Court. The Chamber of that jurisdiction considered in 2019 that it was indispensable, if the indictment in the Argentine courts was for fraud against the Venezuelan State, for the country to provide documentation proving such accusation against the Argentine businessman in that jurisdiction. If the crime to be proved is money laundering -the Chamber argues- then proof of the preceding crime in Venezuela is required.

Venezuela’s lack of cooperation also complicated the theory that a transnational bribery was promoted by Levy for Chavista officials to defraud Venezuela. And it undermined the money laundering investigation by failing to establish the precedent crime, a necessary condition for the court’s judges.

Judge Aguinsky then sent a note to the Supreme Court urging it to seek president Alberto Fernández’s intervention with the intention of unblocking the order. The judge’s argument was that, since the exports from Levy’s companies were made through a bilateral trust between the two countries, the Casa Rosada should intervene in the matter. But the Supreme Court refused to take action arguing it could not intervene in a pending case.

With information from Infobae