In the parallel criminal action, defendants managing partner Lujan and broker-dealers Clarke and Hurtado were charged with paying and conspiring to pay bribes under the FCPA to a senior government official at a Venezuelan bank. The government official, also named in the criminal complaint, was charged with money laundering and Travel Act violations.
The SEC, however, did not bring FCPA charges in its civil action, most likely because the alleged scheme involved broker-dealers rather than issuers.
2008; 2009; 2010
Maria de los Angeles Gonzalez de Hernandez, a senior official at Banco de Desarrollo Económico y Social de Venezuela, Venezuela’s state-owned economic development bank.
Tomas Alberto Clarke Bethancourt is a U.S. citizen and Executive Vice President at Direct Access Partners, LLC ("DAP"), a New York broker-dealer. Clarke is related to co-defendant Iuri Rodolfo Bethancourt.
According to the SEC's complaint, since October 2008 to June 2010, DAP's Global Markets Group generated more than $66 million in revenue for DAP from transaction fees on riskless principal trade executions in Venezuelan sovereign or state-sponsored bonds for Banco de Desarrollo Económico y Social de Venezuela ("BANDES"), Venezuela’s state economic development bank. The SEC alleges that the revenue was the result of a multi-faceted kickback scheme orchestrated by the defendants, in which a portion of the revenue was illicitly paid to BANDES official Maria de los Angeles Gonzalez de Hernandez, who authorized the fraudulent trades, and to Clarke's co-defendants Jose Alejandro Hurtado, Haydee Leticia Pabon, and Bethancourt. The Complaint also stated that after payments were made to those individuals and other expenses covered, 60 percent of DAP Global's net profits were shared by DAP Managing Partner Ernesto Lujan, Clarke, and an unnamed executive. The SEC also alleges that Lujan, Clarke, and Hurtado falsified the size of DAP's markups to BANDES and Gonzalez, which enabled them to retain a greater share of the fraudulent profits.
According to the SEC, the kickback scheme operated as follows: First, when BANDES wanted to purchase Venezuelan bonds through DAP, Clarke gathered information on market bid-ask spreads for the bonds and requested "offer" prices from one or more third-party dealers. Clarke then provided to BANDES, sometimes through Hurtado, a price on the bonds to BANDES that would include a significant markup for DAP. Second, the DAP Global team arranged for DAP to pay approximately half of this markup revenue to facilitate improper kickbacks to Gonzalez, Hurtado, and others. Third, a portion of the payments DAP made to Pabon, Hurtado, and Bethancourt were remitted to Gonzalez.
Some of the kickbacks to Gonzalez were allegedly paid through Cartagena International, a Panama corporation that was purportedly co-owned by Gonzalez.
Trial has been stayed pending resolution of the parallel criminal action.