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Thursday
Jun162016

Owner of Houston oil service companies admits Venezuela bribes

Image courtesy of PDVSAThe owner of multiple U.S.-based oil and gas services companies pleaded guilty Thursday to bribing officials at Venezuela’s state-owned energy company to win work and speed up contract payments.

Roberto Enrique Rincon Fernandez (Rincon), 55, of The Woodlands, Texas, pleaded guilty in federal court in Houston to one count of conspiracy to violate the Foreign Corrupt Practices Act, one count of violating the FCPA, and one count of making false statements on his 2010 federal income tax return. 

Sentencing is set for September 30.

Rincon was arrested in December 2015 after a grand jury in the Southern District of Texas returned an 18-count indictment against him.

Also indicted then was Abraham Jose Shiera Bastidas (Shiera), 53, of Coral Gables, Florida.

Rincon supplied Petroleos de Venezuela SA or PDVSA with $500 million in oil equipment a year, "becoming one of the state oil firm’s most important contractors, according to former senior executives of the oil firm," the Wall Street Journal said in December.

He's the sixth defendant to plead guilty as part of a huge investigation by U.S. authorities into bribery at Venezuela's state oil company. The DOJ said Thursday the investigation is ongoing.

Shiera pleaded guilty in March to one count of conspiracy to violate the FCPA and commit wire fraud, and one count of violating the FCPA.

His sentencing is scheduled for July 8.

Shiera was arrested in Miami on December 16.

Four others have pleaded guilty. They include a former employee of Shiera and three men who worked for PDVSA.

Moises Abraham Millan Escobar, 32, of Katy, Texas, was Shiera’s former employee. He pleaded guilty to one count of conspiracy to violate the FCPA for bribing PDVSA officials.

In December 2015, the three former PDVSA employees -- Jose Luis Ramos Castillo, 38, Christian Javier Maldonado Barillas, 39, and Alfonzo Eliezer Gravina Munoz, 53, all from Katy -- pleaded guilty to conspiracy to commit money laundering.

When they worked for PDVSA, Ramos, Maldonado, and Gravina took bribes from Shiera and Rincon in exchange for help winning contracts from the energy company.

The three admitted they conspired with Shiera and Rincon to launder the bribe money.

Gravina also pleaded guilty to making false statements on his 2010 federal income tax return. He failed to report bribe payments he received from Shiera, Rincon, and others.

The DOJ said Thursday that Rincon and Shiera worked together to bid for equipment and services contracts with PDVSA through their various companies. 

Beginning in 2009, they agreed to bribe PDVSA officials to make sure their companies could bid for contracts and be paid before other PDVSA vendors. 

Rincon admitted Thursday he didn't report on his 2010 income tax return more than $6 million in foreign dividend income. The money came from a Venezuelan corporation he owned.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016