Overbilling, up to three times the original value, in merchandise, freight and insurance; incomplete exports; disproportionate down payments; companies created ad hoc days before being awarded contracts; diversion of funds to accounts of tax havens. There is everything in the menu of tricks used by entrepreneur Juan José Levy to keep the lion's share in the contracts he signed to supply TV antennas, hygiene products and medicines from Argentina to Venezuelan. A look at the Argentine judicial investigation report reveals such a diversity of irregularities that it is difficult to understand why official companies Suvinca or Cantv chose him as a supplier, or maybe not.
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The doors of the Miraflores Palace have been insurmountable for many entrepreneurs during chavismo, always suspicious of the private initiative, though they have opened with ease to others. Until a few years ago, Argentine Juan José Levy stood out in the list of those chosen to trade business with the Government of Hugo Chávez, first, and with that of Nicolás Maduro, later. With just three small businesses, this man signed contracts with the Venezuelan government for almost 250 million dollars between 2010 and 2014 for the supply of personal hygiene products, set-top-boxes and television antennas, and even medicines. His streak seemed incomprehensible until last year, when an investigation by the Prosecutor's Office of Buenos Aires - initiated by quarrels between him and his brothers and partners - unveiled a web of dark financial operations and agreements unfavorable to Venezuela.
The background of this story dates back to 13 years and leads to the cooperation agreement signed at that time by Chávez and Néstor Kirchner, which later led to a bilateral trust. Thanks to this alliance, the three modest companies of Levy (Laboratorios Esme, Corporación Gulfos and Bleu Tel) took out a burdensome business that today is ruinous for Venezuelans. The nut that would screw Laboratorios Esme, for example, as one of the main suppliers of cleaning supplies to the state-owned Suministros Venezolanos Industriales (Suvinca) was the signing of a "letter of intent" between both parties.
It happened on April 20, 2010, and it was a gesture followed with official zeal, since days before and after the agreement a delegation of the then President Cristina Fernandez de Kirchner, consisting of the Argentine ambassador in Caracas, Carlos Alberto Cheppi and José María Olazagasti (right-hand man of Julio De Vido, the controversial Minister of Planning of the Kirchners), had shared a few hours of flight with Levy from Caracas to Buenos Aires. He was not the only one. About 20 trips shared between the entrepreneur and several officials of the Casa Rosada, including De Vido, and other evidence exposed in the court file show that in this case, there are no coincidences.
Having paved the way for high-ranking K leaders, Levy learned to navigate without getting shipwrecked in the business between Buenos Aires and Caracas. Without economic capacity to support the agreements reached, their companies enjoyed the privilege of a 60% advanced payments as soon as they signed contracts with Suvinca and the Venezuelan National Telephone Company (Cantv), but they also incurred in overbilling of merchandise, freight and even insurance of shipments, defaults in shipments, and diversion of funds to private banks, later transferred to still unknown accounts, and even forging of the signature of one of the partners of Levy’s companies, his brother Alejandro. It is a mix that explains why the Argentine justice considers him as a suspect of money laundering, evasion and aggravated smuggling in this trading with Venezuela and the seizure of around 300 million pesos in their bank accounts.
These businesses with Levy not only involve several state companies, but also reach the management of a few Venezuelan officials, like Manuel Fernández Meléndez (president of Cantv and former Minister of Science and Technology), Richard Canán and Edmeé Betancourt (former Trade Ministers) and Eddie Betancourt (former president of Suvinca – Venezuelan Industrial Supplies), among others.
For the Prosecutor’s Office of Argentina it is "striking" that the first of the three contracts entered into between Suvinca and Laboratorios Esme —including their "addenda", from February 22, 2011 to March 21, 2012— provided the supply of 6,325,440 units of products worth 22.3 million dollars. This amount "significantly" increased to 65.5 million dollars and finally to 119.7 million dollars, but without "explicitly indicating the increase" of the merchandise to be bought by the Venezuelan state company.
Almost the same thing happened with the other Levy companies. Between 2012 and 2013, Corporación Gulfos and Bleu Tel signed contracts with CANTV for over 126 million dollars for the supply of set-top-boxes, external television antennas and replacement parts. The Venezuelan telephone company incurred, at the very least, in an act of faith. None of the companies of the Levy family had a standing and had been recently organized at the time of the agreements. Until December 2014, the Corporación Gulfos belonged to Frolem Corporation LC, located in Nevada, USA, and was controlled by Plascot Limited, in Seychelles (both created by the already famous Panamanian law firm Mossack Fonseca, the documents of which leaked to the press and gave rise to the global research published in 2016, known as Panama Papers).
But Frolem Corporation LC is a secret. "Based on the registration form of general and/or commercial information of the Bureau of Legal Entities (Argentina), it has registered domicile in calle Quinquela Martín, número 19, manzana 11 "c" of Ciudad Evita, Partido de la Matanza, provincia de Buenos Aires (...) The acknowledgement record of March 17, 2014, on public deed 19, from clerk Alicia Folco, states that the house in that address appeared to be unoccupied, and that the light meter did not indicate the use of electric current," explains another judicial file.
In
the end, the money drain and the breaches of contracts were a constant. With the
sale of personal care products, so scarce in the Venezuelan market for years,
which Levy had to make through Laboratorios Esme, the mess is such that even in
2016, the company had not complied with the agreed supplies, previously paid by
Suvinca. "From January 2011 to 7/19/2016, the CIF value (freight and insurance
included) of Laboratorios Esme exports to company Suvinca was
US $
49,281,502.65, while the currency exchange settlements in the same period
reached a total of US $ 88,269,655. Hence, the exports made represent only
55.83% of total foreign currency settled,” says the file prepared by prosecutor
María Luz Rivas Diez.
The document reveals almost the same irregularity in the contracts for the supply of set-top-boxes and television antennas. Based on an account of Corporación Gulfos in BBVA Banco Francés, the company had a net worth of 5.7 million dollars, but had not "registered sales" in 2012 and 2013. However, between last year’s August and December, there had been an unusual increase in fixed-term deposits in the amount of 52 million dollars. "We have not been able to obtain actual proof of the existence of the merchandise described in the documents provided - acquired from company Chai Wang Digital Limited of Hong Kong -, its actual shipment, its actual delivery in Venezuela to the National Telephone Company of Venezuela -owned by PDVSA-, or the cause or justification of the triangulation," indicates the "reporting person" of this banking group to the prosecutor's office.
Overbilling of goods, freight and even insurance was a common practice, according to the judicial investigation. "The goods exported by Laboratorios Esme to Suvinca were declared at a price that significantly exceeded the actual price, i.e. the price of the goods sent to Venezuela was overvalued." In comparison with the export prices of multinational companies like Johnson & Johnson or Kimberly Clark from Argentina, the products shipped by Levy to the Venezuelan government reflect a premium that ranged between 145% and 339% in items like diapers and pads. There is even a huge price differential between what Levy exported to countries like Chile, Cuba or Uruguay, and what it sold to Venezuela. "As an example, in invoice 111 of 6/11/2012 to Suvinca de Venezuela, the 4-liter Top Win Softener for clothes showed a unit price of US $ 6,700. However, in invoice 118 of 6/26/2012, the same product was brought to Chile at a unit price of US $ 2,640 —a price difference of around 154%."
That practice of inflating invoices was not limited to products. It was use to assess freight and insurance cost. "It is observed that the freight values ??charged by Laboratorios Esme to Suvinca are disproportionate in relation to the cost that Esme paid for such concepts to Juwald," the Argentine prosecutor explains after comparing invoices of several shipments.
"This leads to notice that in addition to an interrupted millionaire contract, much of the money paid in advanced and/or transferred by Suvinca to Laboratorios ESME was not intended to pay for goods, but to solve logistics costs outrageously increased by ESME," as stated in the file.
With the state-owned company Cantv, that overpricing scheme in the value of shipments is more outrageous. For the Argentine prosecutor's office it is "inexplicable and unreasonable" from a commercial perspective that the cost of air freight was equal to or higher than the price of the merchandise. Bleu Tel's sales invoices show that the antennas had a cost of $ 38 per unit, while the air freight cost ranged from $ 38 to $ 48 per unit. "The ocean freight cost was US$ 13.12 per unit. Bear in mind that these are not essential or perishable products that require immediate arrival," as indicated in the file.
Laboratorios Esme 2010-2011 Catalog by ArmandoInfo on Scribd
The documents obtained by the Argentine judicial authorities reveal, in addition, that this scheme of inflating the cost of the freights counted on the participation of the Venezuelan telephone company. In an exchange of emails between CANTV officials with the Levy brothers and partners details the consent. "This is to request you to send me a formal quotation for the freight and insurance of the set-top-boxes and the missing antennas. Please submit two quotations, one for air and one for sea transportation, in order to adjust the cost of freight to the budget in the contract. It can be a mixed solution, i.e. to send, for example, 75,000 STBs by air and 75,000 by sea, and all the antennas by sea, which is what costs more and triggered the prices. I must submit that quotation to Engineer (Manuel) Fernández as soon as possible due to the increase," wrote an employee, Rafael Belisario, to Alejandro Levy, on December 4, 2012.
For the Argentine authorities, the suspicious handling of Levy was not limited to those breaches or unjustified surcharge in the sale prices to Venezuelan state companies. The money leaks occurred from several sides. When these negotiations were held, there was a strict currency exchange control in Argentina and Venezuela. Hence, Corporación Gulfos and Bleu Tel received dollars at preferential prices to pay goods to companies Sichuan in China and Chai Wan Digital Limited in Hong Kong, and then resell it to Cantv.
This is the result of a well-conceived strategy, according to court reports. In this way, the money did not enter Argentina, but to controlled bank accounts or with the cooperation of international companies Chai Wan Digital LTD and Sichuan Changhong. Due to Levy's relationship with other entrepreneurs linked to these companies it is also suspected that these dollars have circulated or been transferred to the Frolem Corporation coffers.
"Chai Wan Digital Limited was registered under number 1909266, on May 20, 2013, as a Private Company Limited by Shares. In other words, this company was registered 25 days after the signing of the contract between Corporación Gulfos and Cantv de Venezuela, i.e. on April 25, 2013. However, the contractual prices between Cantv and Corporación Gulfos were set when the provider chose by the Corporación Gulfos did not even exist," says the prosecutor of the case against Levy.
Along with the operations via Hong Kong, considered one of the "most important banking and financial secrecy in the world," the prosecutor also detected strange deviations of money in Levy's contract with Suvinca, which also lead to tax havens. The Prosecutor's Office verified that Laboratorios Esme made payments in dollars to Importadora Asiria, a Venezuelan company engaged in the trading of goods, with an office in the center of Caracas and two workers only, according to the National Register of Contractors.
It involved three transfers made between December 14, 2011 and January 18, 2012 for a total of US$ 224,371 to an account in Venecredit Bank & Trust of the Cayman Islands. "All these aspects lead us to suspect that it was an operation organized with the purpose of transferring foreign currencies claiming supposed services of transfer of containers to justify them," concludes the prosecutor.
"I do not know what you're talking about. I do not know either company"
In the incorporation papers of the company in Caracas there is no record that the "purpose" of the company is to provide port or logistics services. One of its shareholders, Daniel Cabrices, answered by telephone, "I do not know what you're talking about. I do not know either company," when asked about the payments in dollars that the company of Levy transferred to him. Cabrices undertook to verify the information and answer again, but that never happened.
In the 120-page brief prepared by the Argentine public prosecutor's office there is no evidence that any Venezuelan authority has noticed how ruinous businesses with Levy were. On the contrary, there are documents with decisions incomprehensible for the prosecutor, like the letter sent on March 7, 2014 to Levy by the then president in charge of Suvinca, General of Division Vinicio Eusebio Micotti Lanz. In that letter, the Venezuelan official raised the need to "modify the schedule of dispatch of goods," "establish a round table" to verify the "orders and shipments agreed by the parties" and even a "temporary suspension" of shipments "until June, approximately."
These arguments lead the prosecutor to decide that "under the commercial attire of a supply agreement millions in dollars were transferred, most of which were not aimed to perform that agreement." By the time of the letter, two other ministers were managing the trade portfolio, Alejandro Fleming and Dante Rivas. Nobody stopped the bleeding. On the contrary, the Venezuelan authorities included Levy in new businesses, to the point of appointing him as a supplier of medicines in another million-dollar agreement.
In late 2014, the then Minister of Health, Nancy Pérez, signed an agreement for 495 million dollars for the supply of 200 million units of medicines from Argentina and Uruguay. Among the companies that were part of the business were Laboratorios Esme with Farmamed, Urufarma and Microsules. It is unknown how much of that nearly 500 million-dollar pie corresponded to Levy.The
medicines were to be in the Venezuelan market in 2015, but not even the pharmacy
shelves
- Venezuela has been suffering from a general shortage of medicines
for months -, nor the entrepreneurs linked to the Venezuelan pharmaceutical
sector are aware of the results of that agreement. "That company (Laboratorios
Esme) was brought into the sector by Cheppi (the former Argentine ambassador in
Caracas)," says a Venezuelan entrepreneur who preferred anonymity and does not
rule out the inclusion of Laboratorios Esme as a supplier of medicines through a
"triangulation" from Cuba.
In Argentina, they say that neither Laboratorios Esme nor Farmamed are part of the pharmaceutical industry of the southern country. "None of these companies act in the area of ??drug production and in any case, it is about SMEs, i.e. of small size and scale," said a southern entrepreneur.
Little remains of the oil bonanza of the times of Chávez and the dreams of a great South American union with ideological allies. In this transit, millions of dollars went to the bank accounts of Argentine entrepreneurs like Levy, dollars that are craved today during the "lean times" and scarcity of Chávez's heir. In February 2013, Levy even declared to Telam, the Argentine news agency, that his company Laboratorios Esme is "in the final stage" of an agreement for the "installation of a plant in Venezuela for the production of shampoo, creams, detergents and other grooming items that will be marketed in the country and in other ALBA member nations," like Cuba and Bolivia. None of that materialized. Irregularities were also detected in the same origin of the cooperation agreements reached between the deceased Chávez and Néstor Kirchner, like those indicated by former Argentine ambassador in Caracas, Eduardo Sadous, which cost him his position. It was an alliance that was born condemned to corruption scandals.
Adrián Perdomo Mata has just entered the list of sanctioned entities of the US Department of the Treasury, as president of Minerven, the state company in charge of exploring, exporting and processing precious metals, particularly gold from the Guayana mines. His arrival in office coincided with the boom in exports of Venezuelan gold to new destinations, like Turkey, to finance food imports. Behind these secretive operations is the shadow of Alex Saab and Álvaro Pulido, the main beneficiaries of the sales of food for the Local Supply and Production Committee (Clap). Perdomo worked with them before Nicolás Maduro placed him in charge of the Venezuelan gold.
Gassan Salama, a Palestinian-cause activist, born in Colombia and naturalized Panamanian, frequently posts messages supporting the Cuban and Bolivarian revolutions on his social media accounts. But that leaning is not the main sign to doubt his impartiality as an observer of the elections in Venezuela, a role he played in the contested elections whereby Nicolás Maduro ratified himself as president. In fact, Salama, an entrepreneur and politician who has carried out controversial searches for submarine wrecks in Caribbean waters, found his true treasure in the main social aid and control program of Chavismo, the Clap, for which he receives millions of euros.
While the key role of Colombian entrepreneurs Alex Saab Morán and Álvaro Pulido Vargas in the import scheme of Nicolás Maduro’s Government program has come to light, almost nothing has been said about the participation of the traders who act as suppliers from Mexico. These are economic groups that, even before doing business with Venezuela, were not alien to public controversy.
Even though there are new brands, a new physical-chemical analysis requested by Armando.Info to UCV researchers shows that the milk powder currently distributed through the Venezuelan Government's food aid program, still has poor nutritional performance that jeopardizes the health of those who consume it. In the meantime, a mysterious supplier manages to monopolize the increasing imports and sales from Mexico to Venezuela.
Turkey and the coastal emirates of the Arabian Peninsula are now the homes of companies that supply the main social -and clientelist- program of the Government of Venezuela. Although the move from Mexico and Hong Kong, seems geographically epic, the companies has not changed hands. They are still owned by Colombian entrepreneurs Alex Nain Saab Morán and Álvaro Pulido Vargas, who control since 2016 a good part of the Import of food financed with public funds. Around the world for a business.
Since the borders to Colombia and Brazil are packed and there is minimal access to foreign currency to reach other desirable destinations, crossing to Trinidad and Tobago is one of the most accessible routes for those in distress seeking to flee Venezuela. Relocating them is the business of the 'coyotes' who are based in the states of Sucre or Delta Amacuro, while cheating them is that of the boatmen, fishermen, smugglers and security forces that haunt them.
When Vice President Delcy Rodríguez turned to a group of Mexican friends and partners to lessen the new electricity emergency in Venezuela, she laid the foundation stone of a shortcut through which Chavismo and its commercial allies have dodged the sanctions imposed by Washington on PDVSA’s exports of crude oil. Since then, with Alex Saab, Joaquín Leal and Alessandro Bazzoni as key figures, the circuit has spread to some thirty countries to trade other Venezuelan commodities. This is part of the revelations of this joint investigative series between the newspaper El País and Armando.info, developed from a leak of thousands of documents.
Leaked documents on Libre Abordo and the rest of the shady network that Joaquín Leal managed from Mexico, with tentacles reaching 30 countries, ―aimed to trade PDVSA crude oil and other raw materials that the Caracas regime needed to place in international markets in spite of the sanctions― show that the businessman claimed to have the approval of the Mexican government and supplies from Segalmex, an official entity. Beyond this smoking gun, there is evidence that Leal had privileged access to the vice foreign minister for Latin America and the Caribbean, Maximiliano Reyes.
The business structure that Alex Saab had registered in Turkey—revealed in 2018 in an article by Armando.info—was merely a false start for his plans to export Venezuelan coal. Almost simultaneously, the Colombian merchant made contact with his Mexican counterpart, Joaquín Leal, to plot a network that would not only market crude oil from Venezuelan state oil company PDVSA, as part of a maneuver to bypass the sanctions imposed by Washington, but would also take charge of a scheme to export coal from the mines of Zulia, in western Venezuela. The dirty play allowed that thousands of tons, valued in millions of dollars, ended up in ports in Mexico and Central America.
As part of their business network based in Mexico, with one foot in Dubai, the two traders devised a way to replace the operation of the large international credit card franchises if they were to abandon the Venezuelan market because of Washington’s sanctions. The developed electronic payment system, “Paquete Alcance,” aimed to get hundreds of millions of dollars in remittances sent by expatriates and use them to finance purchases at CLAP stores.
Scions of different lineages of tycoons in Venezuela, Francisco D’Agostino and Eduardo Cisneros are non-blood relatives. They were also partners for a short time in Elemento Oil & Gas Ltd, a Malta-based company, over which the young Cisneros eventually took full ownership. Elemento was a protagonist in the secret network of Venezuelan crude oil marketing that Joaquín Leal activated from Mexico. However, when it came to imposing sanctions, Washington penalized D’Agostino only… Why?
Through a company registered in Mexico – Consorcio Panamericano de Exportación – with no known trajectory or experience, Joaquín Leal made a daring proposal to the Venezuelan Guyana Corporation to “reactivate” the aluminum industry, paralyzed after March 2019 blackout. The business proposed to pay the power supply of state-owned companies in exchange for payment-in-kind with the metal.
