Venezuelan Officials Took Kickbacks, Prosecutors Say

By: Carlyn Kolker and David Voreacos - Venezuelan government officials received kickbacks in schemes involving the country's bonds, state oil company and National Guard, U.S. prosecutors said before the trial of a Venezuelan businessman. Franklin Duran and his business partner, Carlos Kauffmann, funneled the kickbacks to officials in the government of President Hugo Chavez for more than eight years, prosecutors said today in a filing in federal court in Miami. Duran is scheduled for a Sept. 2 trial on charges he acted in the U.S. as an unregistered agent for Venezuela. ``Franklin Duran and Carlos Kauffmann amassed their financial wealth by doing the bidding of officials of the government of Venezuela,'' prosecutors wrote. ``Proof that Duran and Kauffmann jointly and improperly conspired'' with Venezuelan officials contradicts Duran's likely argument that ``his actions have been simply misinterpreted, '' according to the filing. Kauffmann already has pleaded guilty and is expected to testify against Duran. Both were arrested Dec. 11 on charges that they conspired to silence Guido Alejandro Antonini Wilson, a Florida businessman who was caught bringing $800,000 in cash into an Argentine airport last August. U.S. prosecutors say the two men were acting at the direction of the Venezuelan intelligence agency when they tried to pressure Antonini to tell no one that the cash was destined for the election campaign of Cristina Fernandez de Kirchner. She was elected president of Argentina on Oct. 28. $100 Million - The kickback claims weren't included in a Dec. 20 indictment of Duran, Kauffmann and three other South American men. Edward Shohat, a lawyer for Duran, denied the allegations made in today's filing. "They don't name a single government official,'' Shohat said in a telephone interview. ``This is an act of desperation. '' Kauffmann attorney Jack Denaro didn't immediately return a message seeking comment. Duran and Kauffmann were partners in a closely held petrochemical company, Industrias Venoco, as well as oil driller Perfoalca. A spokesperson at the Venezuelan embassy in Washington wasn't immediately available for comment. According to prosecutors, the men made corrupt payments to officials of the Venezuelan finance and education ministries. They also provided ``hundreds of thousands'' of dollars in kickbacks to state-owned Petroleos de Venezuela SA in exchange for raw materials, prosecutors wrote. The two men ``colluded'' with officials of the finance ministry to restructure Venezuelan bonds and reaped more than $100 million from the restructuring, prosecutors said. In addition, the men split kickbacks with the National Guard tied to products sold to the military branch, according to the filing. The men also paid kickbacks to regional government officials, prosecutors said. They received so-called finder's fees for helping to steer funds for Vargas and Cojedes states to particular banks, then gave a percentage of the fees to the officials, prosecutors wrote. The case is U.S. v. Moises Maionica, 07-cr-20999, U.S. District Court, Southern District of Florida (Miami). To contact the reporter on this story: Carlyn Kolker in New York at http://e1.mc521.mail.yahoo.com/mc/compose?to=ckolker@bloomberg.net; David Voreacos in Newark, New Jersey at http://e1.mc521.mail.yahoo.com/mc/compose?to=dvoreacos@bloomberg.net. http://www.bloomber%20g.com/apps/%20news?pid=