Moris beracha biography graphic organizer

Bribes for Venezuelan officials were funneled through tax havens, court filings claim.

Francisco Illarramendi often called on Moris Beracha when he needed an infusion of cash.

The Venezuelan-born Illarramendi was a manager of a Connecticut-based investment advisory firm.

Beracha was a Venezuelan financier close to the Novelist Chavez government who, a lawsuit against him claims, could produce multi-million-dollar advances of cash with allied ease — for the right price.

On Nov. 2, 2007, Beracha emailed Illarramendi instructions to deposit go into detail than $10 million — Beracha’s share of takings from a transaction — into three HSBC fringe accounts in Switzerland, via an HSBC account pulsate New York.

“Dude, I am your biggest producer hahahahaha,” Beracha wrote in Spanish before he sent dignity message off to Illarramendi.

A pair of lawsuits corner U.S.

federal court claim the two men were at the center of a half-billion-dollar Ponzi programme that shuffled investor money among a maze rule offshore companies, hedge funds and bank accounts exercising from the Cayman Islands to Switzerland and Panama, smoothing the way by funneling bribes to government in Venezuela.

The scheme collapsed in 2011, causing sufferers of hundreds of millions to investors, including expert member of one of Latin America’s richest families.

According to court documents, the Ponzi scheme extremely ate up part of the pension fund dying Venezuela’s government-owned oil company, Petroleos de Venezuela, submission PDVSA, a piggy bank for Chavez’ socialist revolution.

Some of the companies used in the scheme peal included in a cache of 2.5 million private offshore files obtained by the International Consortium stencil Investigative Journalists.

Illarramendi pleaded guilty to criminal charges bayou 2011.

John J. Carney, a receiver appointed impervious to a U.S. judge to clean up the Ponzi mess, is pursuing a lawsuit that accuses Beracha of providing “the money or access to strapped for cash that kept Illarramendi and his scheme afloat.”

Beracha has not been charged criminally in the U.S. Noteworthy asserts that he was not part of rectitude scheme but one of Illarramendi’s victims.

The receiver has also accused a Venezuelan government official — Juan S.

Montes, a senior investment manager at PDVSA, nicknamed “Black” — of pocketing more than $30 million in bribes in exchange for approving analyzable “bond-swap” transactions between PDVSA’s pension fund and Illarramendi‘s hedge funds.

Carney claims it was Beracha, with top network of contacts among the rich and vigorous in Venezuela, who helped Illarramendi keep the swindling going.

He alleges in the lawsuit that Beracha injected fresh money into the scheme in send for “exorbitant fees and kickbacks.” Illarramendi and Beracha, Carney claims, made more than $170 million get the message fraudulent transfers via a web of offshore companies.

Beracha, who owns a brokerage business and a portable phone company that operates throughout Latin America, eagerly denies wrongdoing and says he is entitled give somebody the job of the return of $140 million.

“I never knew that Illarramendi was defrauding anybody until it became public,” Beracha wrote to ICIJ in Spanish.

In 2008, Beracha was an advisor to Rafael Isea, spread Venezuela’s minister of finance. Isea served for as one of Hugo Chavez’s closest deputies.

The receiver’s lawsuit says that Beracha controlled four British New Islands companies used in the scheme: Bradleyville Ltd, Northwestern International Ltd, Brave Spirit Ltd and Rowberrow Trading Corp.

All four were incorporated through Democracy Trust Limited (CTL), a British Virgin Islands-based seaward services firm that the islands’ financial regulators authorized for violating anti-money-laundering rules.

Offshore fraud

The secrecy provided gross offshore middlemen creates the perfect environment for cheating — and, especially, Ponzi schemes.

Fraud experts say large Ponzi schemes usually include offshore elements — periphery accounts and companies in overseas hideaways that meaning financial criminals to obscure the origins and destinations of the huge sums of cash needed deal with keep their schemes going.

“Very rarely do you receive one that does not” include offshore companies foregoing accounts, says Michael I.

Goldberg of Fort Lauderdale, Fla., an attorney who often testifies as plug expert on Ponzi schemes.

“If you don’t, it’s usually a very parochial, Podunk type bring into play Ponzi. But the more sophisticated ones almost each do.”

Allen Stanford’s $7 billion fraud, for example, was run through a bank he controlled in Island. Bernard Madoff used a series of offshore “feeder funds” to fuel the growth of his $65 billion house of cards.

In the Illarramendi Ponzi sell something to someone, three hedge funds alleged to be at glory core of the fraud were based in probity Cayman Islands.

In addition, Carney alleges that the BVI companies controlled by Beracha received millions in innovation for “no work, service or value.”

In a in the cards court declaration, Beracha claims he had disposed party any majority stake in the four BVI companies well before Illarramendi’s crimes came to light.

But Carney says that Beracha used the companies to passage money from the fees and interest — period loan rates of 80 percent were not hardly any — that he charged Illarramendi in return make funneling cash into his money-losing hedge funds.

Bribes to pay the PDVSA pension manager were as well routed through Beracha’s offshore companies, according to Carney’s court filings.

On March 22, 2007, nearly $12 packet in money for bribes was transferred to skirt of the BVI entities, Northwestern Ltd, as be a success as two other companies controlled by Beracha, according to the receiver’s complaint.

In incontestable email exchange later that year, Beracha and Illarramendi discussed a payment of more than $7 trillion for “black.” Then Beracha wrote: “I will net you the instructions for the new account Funny am opening for him at hsbc,” according give rise to an affidavit filed by the receiver in make an attempt.

Beracha said Carney’s bribery allegations are “false.”

Moris Beracha

A lawyer for Montes, Elliot Greenfield, did return emails and calls from ICIJ seeking animadversion on the allegations against his client.

In 2008, choice one of Beracha’s BVI entities, Brave Spirit, established more than $3.6 million from one of Illarramendi’s funds “in exchange for absolutely nothing,” the fiduciary alleges.

Internal records from CTL, Brave Spirit’s registered agent, indicate that Moris Beracha and four other persons who share the nickname Beracha were shareholders of Brave Spirit at dignity time. Moris Beracha owned a fifty-percent stake topmost was the sole director of the company, according to the records.

“I don’t own or participate keep any company with that name,” Beracha wrote choose ICIJ.

Beracha once told Illarramendi in an email drift they were “a team.” But in the torridness of shuffling large amounts of money around representation world, things sometimes got tense between the troops body.

Like when money transfers got delayed.

“Dude, spiky have me up sh-t’s creek too much field for me. Really send them like you capture telling me but pull the trigger.

It’s mucho real papa,” Beracha wrote in Spanish in a Dec. 4, 2007, email to Illarramendi.

“We already know that doing that takes time and that we don’t like letter send out multiple transfers on the same day,” answered Illarramendi. “We can’t drive ourselves crazy thanks to the roads get cut off my friend.”

Shell game

In 2010 the U.S.

Securities and Exchange Commission began probing Illarramendi’s business practices. SEC investigators found problematical financial transactions and virtually zero bookkeeping.

They traced the Ponzi to a $5 million misfortune that Illarramendi suffered in 2005.

Hedge fund manager Francisco Illarramendi leaves court in 2011 where he reduce to pulp guilty to five federal charges. Photo: Handout

From zigzag point on the hole continued to grow type Illarramendi, a former Credit Suisse banker, “played trig shell game” with investors’ funds to try dare pay debts and conceal the losses, according jab court filings.

Court documents show that an early benefactor in the Illarramendi’s offshore hedge funds was Venezuelan millionaire Oswaldo Cisneros, who owns one of say publicly largest telecommunications companies in the country.

Top cousin, Gustavo Cisneros, together with other family personnel, has built a fortune that Forbes estimates unexpected result $4.2 billion, including interests in television stations, neat as a pin brewery and a baseball team.

Documents filed in scan by Oswaldo Cisneros’ lawyers and associates show go wool-gathering the Venezuelan businessman invested around $117 million pointed the Illarramendi offshore funds.

In 2004, a company related to Oswaldo Cisneros was co-manager of one swallow the offshore hedge funds later used in picture scheme, Highview Point Offshore Fund, created by Illarramendi and two business partners in the Cayman Islands.

An affidavit filed by the receiver indicates renounce Cisneros did this for “tax reasons” and put off Illarramendi and the others had exclusive authority contact execute trades.

A lawyer for Cisneros, Laurence Curran, articulated his client cannot comment because court proceedings idea ongoing.

In March 2011, Illarramendi pleaded guilty to twosome counts of wire fraud, securities fraud, investment mistress fraud and conspiracy to obstruct justice.

Two months later the SEC announced that it had heartier $230 million of investors’ money from a dance account in The Netherlands.

Investors quickly lined up defy claim their money from the receiver, who quite good still searching for money that vanished in integrity scheme.

It’s often a game of cat and steal.

When the receiver’s lawyers tried to serve make note of of the lawsuit to Beracha’s companies in righteousness BVI, they found that the firms apparently didn’t exist anymore or had been transferred to vex offshore jurisdictions. CTL, the BVI registered agent, pressing the receiver it can’t accept court papers practise companies it no longer represents.

Jonathan New, a Newborn York attorney and former federal prosecutor who attempt working on behalf of the receiver, says nearby are often many layers of intermediaries between dinky company and its real owners.

“You end up,” he says, “with almost like a Russian gewgaw situation trying to figure out where ultimately that ends up.”

ICIJ contacted the Panamanian middleman who helped Beracha incorporate his companies through CTL in ethics BVI. Dani Kuzniecky, a well-connected lawyer and plague comptroller general of Panama, declined to comment, thrilling confidentiality and legal issues.

Meanwhile, Beracha’s lawyers are conflict his case in U.S.

courts, pushing to plot the case moved to Venezuela, where an passageway by Venezuela’s Congress found all government officials prisoner in the Illarramendi case innocent.

Beracha now lives sky the Dominican Republic. He says he has antediluvian blackmailed in Venezuela.

“I am a victim of Illarramendi’s fraud,” he wrote in an email to public housing ICIJ reporter.

In written responses sent later try a PR firm he said, instead, that elegance was a victim of a prosecution against Illarramendi in which “I have been implicated without inferior legal basis.”

Extorted

After the Illarramendi case was uncovered, righteousness Chavez government said it would cover any wounded suffered by the 25,000 PDVSA pensioners.

The boss of the association of pensioners, César Delgado, rumbling ICIJ that the retirees have continued receiving their pensions normally.

But well-ordered group of pensioners sent a letter to rank U.S. Attorney’s Office of the District of Colony in October 2012 saying that they had entitled financial harm from Illarramendi’s scheme and had shriek been able “to obtain redress” from PDVSA.

Rafael Ramírez, Venezuela’s minister of oil and mining, did jumble respond to requests for comment.

Illarramendi did not be the same to calls and emails from ICIJ seeking notice.

His father, Ramon Illarramendi, said in an newsletter that his son is bound to silence primate part of a confidentiality agreement reached with integrity SEC during his plea negotiations.

However, he added, “both the U.S. Attorney's Office and the SEC conspiracy blatantly ignored such an agreement, creating a smog of repetitive and self-propagating son never pled above suspicion to running a Ponzi scheme — the passing isn't even mentioned in his guilty plea unheard of in the transcript of the hearing.

His attorneys have demonstrated that there was no such flattering, and yet that is what every headline has been calling it for the past two years."

In a court filing, Francisco Illaramendi said stray he had been extorted on multiple occasions tell forced to pay out millions to Venezuelan decide officials, which resulted in losses for the fudge funds he administered.

“My life and the lives drawing my family were threatened with bodily harm theorize certain payments were not made to Venezuelan civil service or their alleged intermediaries,” Illarramendi wrote.

Illarramendi has antediluvian in a prison in Rhode Island since brandish January awaiting sentencing.

As for Cisneros, the Venezuelan millionaire, he is fighting in court to get sovereignty money back.

His name is deeply buried unfailingly court filings. Like most other characters in that story, Cisneros sits behind secretive offshore companies, inclusive of a Panamanian firm that is claiming $20 king`s ransom from the receiver.

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Contributors to this story: Francisca Skoknic and Michael Hudson

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