U.S. federal prosecutors in Miami have charged two Venezuelan businessmen of money laundering in an alleged $37 million conspiracy involving badly needed equipment for the beleaguered state-run power-company, Corpoelec.
The case is perhaps just the tip of the iceberg of mounting problems at Corpoelec which was hit last month with a wave of unprecedented nationwide power blackouts, inflicting misery on millions of people, cutting off water supply and communications for days at a time and causing the government to close offices and schools while it tries to fix the system.
Jesus Ramon Veroes, a Venezuelan businessman from Margarita island, off Venezuela’s north coast, and Luis Alberto Chacin Haddad, who is a U.S. resident, were arrested last month in Miami under the Foreign Corrupt Practices Act (FCPA). They are accused of bribing a senior Corpolec official named only in the court documents as “Foreign Official #1, a high-level official in Venezuela's Ministry of Electrical Energy and at Venezuela's state-owned electric company," according to an affidavit by an Internal Revenue Service (IRS) investigator.
Sources told Univision that Foreign Official #1 is, in fact, Gen Luis Motta Alfredo Domínguez, the former president of Corpoelec. Venezuela's de facto president Nicolas Maduro announced on Monday that he was removing Motta Domínguez from his post to give him "a rest" after four years of "incessant war."
Lawyers for Chacin and Veroes declined to comment about the case. Chacin was released on bond but Veroes remains in jail in Miami.
According to court documents, Veroes and Chacin allegedly conspired to pay a $2.5 million bribe to "the high level official at Corpoelec" in 2016 to win contracts to buy transformers, generators, forklift trucks and lightbulbs worth almost $37 million.
At a subsequent meeting at an office in Doral, a suburb of Miami, Veroes allegedly stated that the 500 transformers that were shipped “could not be used in Venezuela because they were only compatible with the electrical systems in Cuba and Nicaragua.” Despite that, they were subsequently paid more than $20 million, according to U.S. bank receipts listed in the affidavit.
They ultimately purchased 41 forklifts for $1.5 million and charged Corpoelec almost $6.5 million, pocketing a 300% profit in the process, the IRS investigator stated.
The ongoing blackouts are only the latest blow in a deepening humanitarian crisis in the South American country after years of political and economic turmoil. Maduro blames the outages on U.S. sabotage without offering evidence, while opposition leader and Interim President Juan Guaido countered that government mismanagement and corruption caused the electrical grid to collapse.
Motta Dominguez has reportedly been in the sights of U.S. government investigaors for several years. In 2015, the Wall St Journal reported that an elite unit of the Drug Enforcement Administration (DEA) in Washington and federal prosecutors in New York and Miami were building cases against several high-ranking Venezuelan officials, including Motta Dominguez, using evidence provided by former cocaine traffickers and defectors from the Venezuelan military.
Other officials targeted in the investigation included top ruling party leader, Diosdado Cabello, considered the country’s second most powerful man, and former Vice President Tarek El Aissami, who was charged last month with drug trafficking and violating U.S. sanctions. Cabello and El Aissami have denied any link to drug trafficking.