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Monday
Jan182016

Former Venezuela state bank official sentenced to time served for Wall Street bribe scheme

A former official of a Venezuelan state-owned bank was sentenced Friday to time served for taking at least $5 million in bribes from a Wall Street broker-dealer in exchange for trading business.

Maria de los Angeles Gonzalez de Hernandez had served 16-1/2 months in jail after her arrest in Miami in 2013.

She pleaded guilty in late 2013 to conspiracy to violate the Travel Act and commit money laundering, as well as two substantive counts of the offenses.

Gonzalez, 57, had served as a vice president at state-owned Banco de Desarrollo Economico y Social de Venezuela (Bandes) at the bank's headquarters in Caracas.

On Friday, U.S. District Judge Denise Cote in Manhattan also ordered Gonzalez to forfeit $5 million.

Five officers and employees from New York-based Direct Access Partners had pleaded guilty and been sentenced to prison for bribing Gonzalez.

In March 2015, DAP's former CEO and its managing director were each sentenced to four years in prison. Benito Chinea, 48, and Joseph DeMeneses, 45, pleaded guilty in December 2014 to one count of conspiracy to violate the Foreign Corrupt Practices Act and the Travel Act. Chinea forfeited $3.6 and DeMeneses forfeited nearly $2.7.

In December last year, Judge Cote sentenced Jose Alejandro Hurtado, 40, a Miami-based broker at DAP, to three years in prison and ordered him to forfeit nearly $11.9 million.

Hurtado admitted being the middleman between Direct Access Partners and Gonzalez. He pleaded guilty in 2013 to conspiracy and substantive violations of the Foreign Corrupt Practices Act, the Travel Act, and money laundering laws.

Earlier in December, Tomas Clarke, 46, a former DAP senior vice president based in Miami, was sentenced to two years in prison and ordered to forfeit nearly $5.8 million.

Ernesto Lujan, 52, a former DAP managing partner in charge of its Miami office, was also sentenced to two years in prison and ordered to forfeit $18.5 million after pleading guilty in 2013.

In return for bribes from Direct Access Partners, González directed bond trading work to the firm from 2008 to 2012 and approved fraudulent round-trip trades.

DAP generated more than $60 million in revenue from the Bandes trading business.

The case began in 2010 when the SEC conducted a periodic examination of Direct Access Partners, a registered broker-dealer. The routine review led to discovery of the massive fraud and bribery.

During Friday's sentencing hearing, Judge Cote said she was "affected by the degree of remorse" Gonzalez showed in a statement she read to the court through an interpreter, Reuters said.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.