A Miami investment manager pleaded guilty Tuesday to participating in a $1.2 billion money-laundering ring run by wealthy Venezuelan businessmen with political connections to the socialist government of President Nicolás Maduro.
Gustavo Hernandez Frieri, 45, was convicted of a single money-laundering conspiracy count and now faces less than 10 years in prison at his sentencing March 20 before U.S. District Judge Kathleen Williams in Miami federal court.
Born in Colombia, Hernandez is a naturalized U.S. citizen who was arrested last year during a family vacation in Italy before his extradition to Miami to face the massive money-laundering case. An indictment charged him along with seven other defendants, most of whom are still fugitives.
The indictment accused elite Venezuelan businessmen of paying bribes to government officials to secure loans with the state-owned oil company that generated astronomical profits after being washed through a favorable currency-exchange system.
Hernandez is accused of helping launder at least $12 million that prosecutors say was paid in bribes to one former senior official in Venezuela’s national oil company, PDVSA, who wanted to move the money to Miami and other parts of the United States. Hernandez’s role was to put that money into a fake mutual fund so that it looked legitimate and then launder it into U.S. banks for a fee, according to prosecutor Michael Nadler.
Hernandez’s defense attorney said his client was “deliberately ignorant” about the PDVSA official’s intentions to use the money manager’s hedge fund to hide the foreign bribery payments.
“Mr. Hernandez today took his first step in acknowledging his responsibility for closing his eyes and allowing money to be invested in his investment business that turns out came from criminal acts in Venezuela,” attorney Michael Pasano said after the plea hearing. “He regrets how he allowed his business to be used and how this mistake is a blemish on his 15-plus year career as an honest and legitimate investment adviser.”
Hernandez, who operated an investment business on Brickell Avenue, remains free on a $25 million bond co-signed by his brother, Cesar Hernandez Frieri, and his brother-in-law, Juan Carlos Gomez, who are both in the investment business. They helped Hernandez start two investment firms, Global Securities Holdings and Global Strategic Investments. Hernandez also had to put up a $1.5 million bond requiring him to make a 10 percent down payment.
Since his extradition from Italy in May, Hernandez has been allowed to stay with his family at their $2 million home in Miami’s Bay Point neighborhood. During home confinement, he has been required to wear an electronic ankle bracelet.
Hernandez got into trouble when he was approached by a Venezuelan attorney-turned-money launderer who became a confidential source for Homeland Security Investigations in 2016. The source made arrangements with Hernandez to help hide bribery payments made to the PDVSA official, Abraham Edgardo Ortega.
Ortega, the former executive director of financial planning at PDVSA, pleaded guilty in October 2018 to accepting millions of dollars in bribes that were secretly wired to U.S. and other financial institutions with the assistance of Hernandez and others.
In exchange, Ortega allowed the ring’s members to embezzle hundreds of millions of dollars from the national oil company through loan- and currency-exchange schemes that ended up in European, Caribbean and U.S. banks as well as luxury South Florida real estate and other investments.
Ortega, who worked at PDVSA for more than a decade, admitted he used his official role to give “priority” status to Venezuelan companies that did business with the government so they could tap into its vast oil income to make overnight fortunes. Ortega’s sentencing has been postponed as he cooperates with federal authorities.
Some of the so-called Venezuelan kleptocrats charged in the indictment have connections with Maduro, who is a suspect in the ongoing investigation, according to federal law enforcement sources familiar with the case. Maduro’s three stepsons are also under investigation, along with a wealthy Caracas TV mogul, Raúl Gorrín.
Gorrín’s banker, Matthias Krull, a ninth defendant who was charged separately in connection with the Miami case, pleaded guilty to a money-laundering conspiracy charge and was sentenced to 10 years in prison. Krull has cooperated extensively with prosecutors and Homeland Security investigators. He is expected to receive a sentence reduction and surrender to prison authorities next year.
Krull, a Swiss banker who was based in Panama and provided banking services to Gorrín and other wealthy Venezuelans, was tapped to move $600 million in stolen Venezuelan funds from a European bank to the United States for the benefit of Maduro’s three stepsons, Gorrín, PDVSA officials and others involved in the racket, according to sources familiar with the investigation.
U.S. authorities say the stolen funds were washed through the Venezuelan government’s currency exchange to boost their value before being transferred to Portmann Capital Management in Malta. Some of those embezzled funds were eventually invested in Miami-area luxury real estate and other assets.
In a separate South Florida federal case, Gorrín was charged last year with conspiring with former Venezuelan national treasurer Alejandro Andrade to embezzle more than $1 billion from the government. Andrade pleaded guilty to a money-laundering conspiracy charge and was sentenced last November to 10 years in prison.
Andrade has helped the U.S. Attorney’s Office and Homeland Security Investigations make the case against Gorrín, who also had ties to the late Venezuelan President Hugo Chávez.
Fuente: Miami Herald