Cruz Weffer: The Chavista General who disembarked in a Tax Haven

In 2007, Retired General Víctor Cruz Weffer, head of Plan Bolívar 2000 and Fondur, opened a company in Seychelles after he was charged for illicit enrichment and data concealment. He could never justify the Bs. 1,071 million increase of his equity, equal to 86% of the funds he managed from 2000 to 2003.
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Residents
of Juan Manuel Cajigal home residency, located in the San Andres area of the
populated El Valle parish of Caracas, complain about the problems affecting
their homes since they were built in the dawn of the self-styled Bolivarian
revolution: leaks, lack of water, overcrowding and unfinished works. The
apartments, built by the National Housing Institute, Inavi, one block from El
Valle Metro station, were part of the first major project of Plan Bolivar 2000,
a civic-military alliance launched by the then President Hugo Chávez during the
first year of his government, with the promise of directly serving poor families
through various services: popular markets, street repair, medical care and
construction of popular housing.
On
June 6, 1999, in the Aló Presidente (Hello President) program number 2, which
was back then broadcasted on Radio Nacional de Venezuela station, a willful
Chávez announced the construction of the first 128 popular homes in the San
Andrés area through the merger of State institutions "in order to prevent
anarchy and corruption." Also, the recently elected president stressed that for
the construction of 1,424 apartments in El Valle area of Caracas and another
1,800 in Valles del Tuy in Miranda, 20 billion bolivars (33 million US dollars
at the time) would be invested, and that only to start the first year, 7 billion
bolivars (11.5 million dollars) had been approved. "That is part of the Plan
Bolívar 2000, in which I take a chance on life," said the former president when
the so-called Fifth Republic was in full expansion.
In
that 1999 radio program, Chávez also presented General Víctor Antonio Cruz
Weffer as the new head of the Plan Bolívar 2000, who would manage a budget of
Bs. 73,000 million ($ 120,462,046 at the time) from 1999 to 2000 to execute a
project that would act as the first test balloon of the social missions of the
Bolivarian government.
But
the officer, who held three other positions in the Chavez bureaucracy, did not
attend the opening ceremony of these works. In December 2001, he left the
government through the backdoor amid allegations of corruption of which he would
be the main protagonist.
Cruz
Weffer had barely been out of the government for a month when he began to be
investigated by the Public Prosecutor's Office (PPO) on January 14, 2002,
following a complaint by Seniat and a series of reports published in some
national media that referred to irregularities committed in the Project Plan
Bolívar 2000 and Fondur (National Fund for Urban Development). Five years later,
on April 18, 2007, the former army commander was charged with the crimes of
illicit enrichment and concealment of data in his affidavit of assets and
means.
The
Public Prosecutor's Office based its version on the final audit report submitted
by the Comptroller General of the Republic (CGR) on January 31 of that year,
which certified that the former head of Plan Bolívar 2000 and former president
of Fondur had 1.2 billion bolivars between January 1, 2000 and June 30, 2003.
The Comptroller concluded that Cruz Weffer could not justify how the increase of
his assets to 1,071 million bolivars (approximately one million dollars at that
time) corresponded to his income as an official. The amount was equal to 86% of
the public funds he managed as head of the Plan Bolivar 2000 and president of
Fondur.
Chavista in a Tax Haven
On
May 7, 2007, three weeks after being charged by the Public Prosecutor’s Office
for crimes provided for in the Venezuelan Law against Corruption, Cruz Weffer
diverted his business career to another continent, 13 thousand kilometers away
from the popular homes, the red ribbons of which he did not cut. In Seychelles,
an archipelago of white sands and emerald waters of the Indian Ocean, company
Univers Investment Ltd was registered in his name with a capital of 50 thousand
dollars.
The
registration of Cruz Weffer’s company in this tax haven, a renowned
international sanctuary of luxury tourism and shell companies for money
laundering and tax evasion, would not be his first mercantile transaction
abroad. In 2007, the Venezuelan Prosecutor's Office confirmed the tracking of
transfers amounting to 330 thousand dollars made by the accused officer to bank
accounts abroad, according to the Comptroller General's Office
report.
At
first sight, the name of Cruz Weffer does not appear on the initial company
register or on the certificate of going concern of September 29, 2008, issued by
Seychelles authorities. In fact, the registration of Univers Investment in the
archipelago was not made directly by the Venezuelan military man but by Barreto
& Partners Sàrl, a property management firm domiciled in Switzerland, which
is in turn a client of the prominent Panama-based law firm Mossack Fonseca
(MF).
The
name of Cruz Weffer is covered under the concept of "bearer", one of the company
registration methods offered by the Panamanian law firm to guarantee a high
level of confidentiality. In this case, an offshore company was created (which
does not carry out any economic or commercial activity in the country where it
is registered and does not pay taxes) whose intermediary Barreto & Patners
Sàrl (an M&F client) acted as representative.
The
registration of Cruz Weffer's company complied with the formalities required by
the Seychelle International Business Authority (SIBA), which notified Mossack
Fonseca & Company’s branch in the archipelago the incorporation of Univers
Investment on May 7, 2007, under number 036837.
Barreto
& Partners Sàrl has opened around 47 shell companies in tax havens (6 of
Venezuelan shareholders in Seychelles) as an intermediary of MF. Its
headquarters, domiciled in the Route de Lussy in St Prex, Switzerland,
contradicts the magnitude of the group of companies it represents, the owners of
which are around the world.
The
relationship between Cruz Weffer and Univers Investment is registered in MF
databases. However, in the e-mail exchange that took place in 2009 between the
head office and the branch in Seychelles, it is made known that SIBA asked MF to
update the names of the shareholders and addresses of the companies registered
in the archipelago due to the requirements of the amended Law in Seychelles. The
update had to be submitted by January 1, 2010.
The
direction of the sole shareholder of Univers Investment, as indicated in the
registration form, is not at the shores of the Indian Ocean but rather the
Caribbean Sea, specifically in Caracas, at residencias Cascadas La Castellana,
located in La Castellana area. It is an exclusive residential complex that has
private security and electric gates.
The
author of this release contacted Cruz Weffer at the company's address in
Caracas. They requested a written interview on March 15, 2016, as well as on
March 25, 2016 with a questionnaire about the companies registered abroad. Via
e-mail (03-30-2016), the retired officer denied having registered Univers
Investment: "Searching on the Internet, I could verify that Seychelles is a
group of islands belonging to the African Continent, where I have never been, so
I could not register a company in that place" (sic). He also suggested that his
departures from and entries into the country could be easily checked through a
request to the Ministry of Foreign Affairs. He added that "years ago" he
acquired a company registered in Panama for an amount of $ 50 to open an account
in a subsidiary bank of Crediss Suiss (sic) in Geneva, to request a loan from
the Italian financial institution Credito and Svillupo in order to develop
housing projects in Venezuela. He clarified that both the company and the
account are currently closed.

At the foothill of the Avila mountain of Caracas is the headquarters of company Univers Investment, registered in Seychelles in 2007.
Contrary
to what Cruz Weffer says, today you do not need to travel to open a business in
a tax haven. Hard-to-trace property certificates known as "bearer shares" can be
issued through firms that act as intermediaries, as it is the case with Univers
Investment.
Cruz
Weffer's company in Seychelles existed for 4 years old and, based on its company
register form, it did not record major movements over those years. It was closed
on April 11, 2011, the year when a court acquitted the corruption trial against
the former head of Plan Bolívar 2000. This decision was shortly after appealed
by the Prosecutor's Office.
Chávez’s Favorite
The
challenged management of Cruz Weffer in the Plan Bolivar 2000 and Fondur became
the first corruption scandal of the Chávez government not only because of the
public amount involved (around 120 million dollars) but also because it involved
one of the most loyal figures to the late president.
Initially
introduced by Chávez as a "novel revolutionary plan", Plan Bolívar 2000 began to
be targeted by points raised about irregularities practically from the
beginning. For example, El Nacional Newspaper published that Cruz Weffer had
bought an apartment in the exclusive Colinas de Tamanaco area for 1.8 million
dollars. The general merely said that he was the target of a defamation
campaign, but he never denied the purchase.
Two
years after creating Plan Bolívar 2000, Chávez was taking power from the Plan
executor, and on December 24, 2011, he confirmed on his radio program Aló
Presidente that the removal of Cruz Weffer from the Command of the Army was a
"decision to tighten the pliers, like any other."
Graduated
two years before Chávez, Cruz Weffer was ranked second in his 1973 class at the
Military Academy. Although it was not part of the foundational February 4
(military coup led by Chávez in 1992 against President Carlos Andrés Pérez), he
was part of his circle of trust.
"Cruz
Weffer had a privileged treatment in the first years of the Chávez government.
Not everyone was given a strategic economic sector such as the construction
sector in Venezuela. The late president cared for him, but the officer started
committing too many excesses and Chávez did not forgive him,” says Rocío San
Miguel, director of Control Ciudadado (Social Watch)
organization.
The
analyst stresses that Chávez never punished the uniformed officers who had
incurred in administrative irregularities, except in the case of Raúl Baduel and
the military man of Central Azucarero (sugar company) Ezequiel Zamora (Caeez),
General Delfín Gómez Parra (convicted in 2011 to 7 years and 7 months of prison
when he had been already imprisoned for 5 years and two months). "When Chávez
got angry with them he used to drive them away, appoint them in embassies. He
acted as a pater familias in a relationship of power and control over his
subordinates."
San
Miguel does not rule out a possible "dirty war" within the armed forces that
drove Cruz Weffer's fall from grace. "Not all the military men liked him,
because of all the power he had."
A
fact that highlights a report on Venezuela by the US firm Stratford (reproduced
by Veneconomía in November 2011) could give clues about the cracks within the
armed forces before the coup of April 11, 2002. The then Minister of Defense
José Vicente Rangel and the military high command issued a public statement
expressing their full support for Chávez. The document, aimed to counteract
discontent within the Army, was not signed by any of the top commanders,
including Lucas Rincon and Cruz Weffer, who were considered Chávez's most
important military tokens.
The
growing corruption within the government was one of the main discrepancies
within the Army at the beginning of the first decade of the century. Just by
reviewing Cruz Weffer's statements in 2000 one can understand the criterion that
the former general had about the management of public funds. When he was still
the owner of Fondur, he said that he disagreed with the bidding method to choose
the companies that would execute the works. "They are won by 4 or 5 construction
companies that are the mafias of construction. The direct award instead gives an
opportunity to over 400 small and medium-sized companies," he told El Nacional
on 3-8-2001.
Low Profile
Although
Cruz Weffer tried to keep a low profile after being separated from the charges,
he did not stop working indirectly for the Chavez government. Based on the IVSS
Social Security registry, until 2014, he was president of company Grandes
desarrollos integrales y organizacionales de soluciones sociales C.A.
(Grandiosos), a State contractor with the business purpose of "developing and
executing civil, electrical and industrial construction works and projects." The
retired general already had experience in this
sector.

Company Grandes desarrollos integrales y organizacionales de soluciones sociales C.A. (Grandiosos) do businesses in these offices in the Venezuelan capital. However, now there is a news portal, a production company and a modeling academy.
According
to the National Registry of Contractors (RNC), the vice president of Grandiosos
was José Antonio Páez Jurado, a member of the Military Academy of Cruz Weffer
but from the class of 1972 Brigadier General Pedro Briceño
Méndez.
Grandiosos
is outdated in the RNC, i.e. is disqualified to enter contracts into with the
State. It also has no headquarters; at least it does not work at the address
indicated in the Registry, at Torre Credicard in El Bosque. The new occupants of
the office (the news portal Entodonoticias.com, openly pro-government, a
television production company, and a modeling academy) have no information on
where to locate the construction company chaired by Cruz Weffer, who moved from
the place about two years ago. The Cantv landline phones on the RNC card do not
work.
In
the years when he was being investigated but not yet accused of corruption, Cruz
Weffer was engaged in business activities. He appears as CEO of company Pac Rim
Group, registered in Caracas in 2005. Despite not being in the National Registry
of Contractors (RNC), this company signed on May 12 of the year after its
creation a strategic Alliance agreement with the Government of Carabobo, under
the administration of Luis Felipe Acosta Carlés - Brigadier General of the
Bolivarian National Guard (GNB) - for the "construction, fitting out,
administrative management, operation, and maintenance of the Bartolomé Salom
International Airport of Puerto Cabello.
According
to the document, the alliance with the Government of Carabobo also entailed the
granting of the 50-year concession to Pac Rim Group from May 12, 2016 to May 12,
2056. On that occasion, the company estimated an approximate investment of 850
million dollars in infrastructure, equipment and acquisition of adjacent land to
build the operational airport runway, among other expenses. Currently, the
Puerto Cabello airport is operational, but has no commercial flights. It belongs
to Bolivariana de Aeropuertos (Baer), attached to the Ministry for Water and Air
Transport.
Cruz
Weffer, together with his ex-wife, Lenis Josefina León de Cruz, also registered
properties in the United States of America before being accused. According to
the official records of Broward County Florida, on November 25, 1996, they were
beneficiaries of a concession of a property at 16691 Royal Poinciana Dr, Fort
Lauderdale, Florida, valued at $ 287,300. On May 23, 2005, that same property
was transferred by the couple to Corey Schmith.
Another
property where Cruz Weffer has his name domiciled in the US is 524 N Paxton
Alexandria, Virginia 2230, where the company Cruz and Tran (registered on
January 27, 2011) operates, and according to the Realtor.com registry, it is
valued at $ 493,025.
Cruz
Weffer admits by e-mail that from 2003, when he officially went into retirement,
he began to work as a self-employed. He created two construction companies (one
active and one inactive) in Venezuela, and a third one abroad, of "low capital
and personnel", he clarifies. He is also an advisor to several companies in the
sector. He details that he has two personal accounts and a legal account in the
name of Promotora Colinas de Yara that develops a residential complex in
Maturín, Monagas, called Puertas del Sur Country.
He
adds to the communication that he has a personal account abroad recently opened
at Banco Banistmo in Panama, "because I am trying to develop a project of social
interest homes in that country," and a legal account in the name of VK Land
Group, "unilaterally" managed by his partner, Krsmer Velásquez
Fariñas.
Procedural Delay
Since
he began to be investigated by the Prosecutor's Office in 2002, the legal
process against Cruz Weffer has been fully intermittent over 14 years.
Annulments, habeas corpus and appeals make it a case of procedural delay "for
the benefit of the accused," says Juan Carlos Apitz, university professor and
former magistrate of the TSJ (Supreme Court of Justice). "The accidents were
used for the accused not to be finally convicted to serve his
sentence."

Residencias Cajigal, El Valle - First project of Plan Bolívar 2000
The
last judicial decision known dates from July 16, 2013, when the Constitutional
Division of the Supreme Court of Justice ordered the prosecution against Cruz
Weffer, directing the Court of Appeals of the Criminal Judicial Circuit of
Caracas to resolve the appeal filed by the Public Prosecutor’s Office. But
"where is the new sentence? What happened to the file of the Court of Appeals?"
asks Apitz.
The
trial against the former president of Plan Bolivar 2000 seems to be "shelved", a
formula that allows crimes and their respective punishments to be forgotten over
time, recalls Apitz. If we take into account that the crimes charged to Cruz
Weffer go back to 2002, and article 108 of the Criminal Code provides that a
criminal action prescribes at 15 years, in 2017, the criminal process against
the first case of corruption of the Chávez government could be rendered
ineffective.
Cruz Weffer Defends Himself
On
March 30, 2016, Cruz Weffer affirmed by e-mail that the Office of the
Comptroller General of the Republic (CGR) recognized by the repeal of the US
Department of State the existence of a credit from Sun Trust Bank for $ 330,000,
duly declared and received by wire transfer in Banco del Caribe, equal to Bs.
480,000, when there was no exchange control in the country. "What was acquired
with that money - land, equipment, material for organic crops, tractors, power
plants – were added to the equity increase instead of being subtracted by the
most perverse and evident bad intention. The Office of the Comptroller said that
they should not be considered in the affidavit of means and assets because it is
a company (Criadero Villa de Lobos) owned by me. However, they were considered
as a personal equity increase," he assured 9 years after the CGR
report.
Also, regarding the "alleged crime of data
concealment," Cruz Weffer indicates that the land of Nueva Tucacas, state of
Falcón, which was indeed not declared, had a value of
Bs. 12,000, which the
Office of the Comptroller describes as "a hut type, with streets with no
sidewalks or sewers, and not asphalted," which also measured 240 square meters
(2,583.34 sq ft) and he assures that he never went to that place, which is why
he did not include it in the statement. "What is the bad intention of hiding an
asset with these characteristics?" asks the retired
general.