The U.S. Securities and Exchange Commission sued four people with ties to brokerage Direct Access Partners LLC over claims they paid millions of dollars in bribes to a Venezuelan finance official to secure the bond-trading business of a state-owned bank.
A DAP unit generated more than $66 million for the New York brokerage from 2009 through at least June 2010 in transaction fees on riskless principal trades in Venezuelan sovereign or state-sponsored bonds for Banco de Desarrollo Economico y Social de Venezuela, the SEC said in a complaint filed today in U.S. District Court in Manhattan. A portion of that revenue was paid to the Venezuelan official, the SEC said.
Tomas Alberto Clarke Bethancourt, an executive vice president at DAP, was responsible for executing the fraudulent trades and maintaining spreadsheets tracking illegal markups and markdowns, according to the SEC. Jose Alejandro Hurtado was an intermediary between DAP and the Venezuelan official and got more than $6 million in kickbacks disguised as salary payments from DAP, some of which he gave to the official, the SEC said.
“These traders triggered a fraud that was staggering in audacity and scope,” Andrew Calamari, head of the SEC’s New York regional office, said in a statement. “They thought they covered their tracks by using offshore accounts and a shadow accounting system to monitor their illicit profits and bribes, but they underestimated the SEC’s tenacity in piecing the scheme together.”
The SEC also sued Iuri Rodolfo Bethancourt over his role in funneling bribes to the Venezuelan official, who wasn’t sued by the SEC, and Haydee Leticia Pabon, who received about $8 million in sham finders’ fees, according to the complaint.
Phone calls to Henry Bell, an attorney for Clarke, and Frank Rubino, a lawyer representing Hurtado, weren’t immediately returned. Bethancourt and Pabon have no known defense counsel, the SEC said.
A press official for the bank, who declined to be identified because of company policy, declined to comment. An e-mail sent to the bank today wasn’t immediately returned.
An official in Venezuela’s finance ministry, who declined to be identified because of ministry policy, also declined to comment.
U.S. prosecutors filed parallel criminal charges today against Clarke, Hurtado and the Venezuelan official.