Mar. 31, 2018 – Federal authorities in South Florida are building a massive money laundering case against a former high-ranking Venezuelan official close to late President Hugo Chávez in a probe that also targets other former senior officials and financial figures who collaborated with them.
Alejandro Andrade, a former bodyguard to Chávez who rose to the rank of national treasurer between 2007 and 2010, is suspected of laundering millions of dollars stolen from the Venezuelan government to invest in real estate, show horses and other assets in South Florida and elsewhere, according to sources in Miami and former Venezuelan government officials familiar with the investigation.
Andrade’s acquisitions in South Florida and other parts of the United States don’t show up in public records because the purchases were made through shell companies that allow him to keep his ownership hidden, sources said. Andrade and several other associates in Venezuela’s government, banking and business sectors are suspected of enriching themselves by selling billions of dollars in bonds, capitalizing on fluctuating exchange rates and hiding their profits in Swiss bank accounts and U.S. investments, they said.
The latest investigation stands out among the several federal criminal cases brought against former Venezuelan officials in recent years because Andrade was one of the most trusted members in Chávez’s inner circle. The socialist leader died in 2013.
Andrade, 53, has traveled frequently on his private jet between Caracas and South Florida since leaving public office eight years ago, according to sources familiar with his activities and published reports. He is a fixture in the affluent Palm Beach County community of Wellington, known for its horse-riding competitions and high-society polo matches. He owns a home in Wellington and his son has competed in major equestrian jumping events there, Venezuela and other parts of the world, according to the promotional company, Starting Gate Communications. Andrade is also a partner in a South Carolina farm that raises show horses and sponsors equestrian competitions.
For many expert observers of Venezuela, plunging oil prices, socialist policies, systemic corruption and the plundering of potentially billions in government funds have transformed one of the richest countries in Latin America into one of the world’s poorest. Hundreds of thousands of Venezuelans have been forced to seek refuge in neighboring countries to escape famine-like conditions while the wealthy invest in luxury condos and homes in the Miami area.
The corruption is not only widespread in the government of Chávez’s successor, President Nicolás Maduro, but it’s also being used to sustain his power, said Diego Moya-Ocampos, the principal analyst of Latin America for IHS Markit, a London-based company that assesses investment risks around the world.
“Chávez got into power under the banner of fighting against corruption, but the political transformation he initiated in 1999 ended up becoming a kleptocracy,” said Moya-Ocampos. “The situation, however, is now out of control and the sheer magnitude of all of this corruption has caused the humanitarian crisis devastating the country.”
The U.S. Attorney’s Office in Miami declined to comment about its investigation against Andrade and others. Andrade’s defense attorney, former federal prosecutor Curtis Miner, was out of the country and did not respond to cellphone and email requests seeking comment. Roberto Martinez, a former U.S. attorney who is working with Miner on the case, said he could not comment.
Andrade’s successor as national treasurer, Claudia Patricia Díaz Guillén, is also under investigation in the South Florida case for suspected laundering of money from government bond sales, according to sources familiar with the probe. Diaz, a former naval officer, was believed to be living in the Dominican Republic, according to published reports in Venezuela. Her husband, Adrián Velásquez Figueroa, is a former Venezuelan presidential security guard.
Others under investigation include Venezuelan bankers and business people associated with both the governments of Chávez and Maduro, the sources said.
A case against Andrade could have significant implications for other members of the former Chávez government and those in the private sector who worked with them. As Venezuela’s national treasurer, Andrade could potentially help South Florida federal investigators untangle the former regime’s financial secrets and pinpoint those who stole from it.
Andrade had authority over Venezuela’s banks accounts with Swiss-based HSBC that were used to secretly deposit billions of dollars in public funds, according to a 2015 report by the International Consortium of Investigative Journalists. HSBC was fined $1.9 billion by the U.S. government in 2012 for allowing drug traffickers, politicians and other customers to launder their money through its bank branches in the United States.
According to the data, Venezuela had a total of $14.8 billion in HSBC accounts in Switzerland between 1998 and 2007.
It’s not illegal to have accounts in Switzerland, which is known for its banking secrecy. But Venezuela’s secret accounts with HSBC raised questions about whether Chávez and other high government officials were pilfering public funds, particularly at a time when Venezuela was struggling to keep its economy afloat.
The vast majority of Venezuela’s funds appear to be linked to its Treasury Office, which became an HSBC client in 2005. The office held as much as $11.9 billion in the account, according to the ICIJ and reporters who had access to the data. By 2006-2007, however, the office held three accounts with $698 million. Andrade became treasurer in 2007 and was the only Venezuelan official listed on the country’s Swiss bank accounts.
Long believed to be living in luxury in Wellington, Andrade came from humble beginnings but his fortunes soared when he became an insider during the rule of the late president Chávez. Some Venezuelan news reports, including the online news site Reportero24, estimated Andrade’s fortune to be in the billions of dollars
Chávez always protected Andrade, ever since the leader of the Bolivarian Revolution almost took out his friend’s right eye while they were playing “chapita” at the presidential palace. Chapita is a type of baseball game played with soda caps instead of balls and with a broomstick serving as a bat. Andrade eventually had his damaged eye replaced with a glass version, according to published reports in Venezuela.
Fraught with guilt, Chávez ended up favoring him during his years in power, those reports say, including another online news site, elindependiente.com.
Andrade, who graduated from the country’s Military Academy, participated in Chávez’s 1992 failed coup attempt against the president. Six years later, when Chávez ran successfully for president, Andrade served as his bodyguard. In 1999, Andrade was elected to the Constituent National Assembly, which was tasked with writing a new constitution and redesigning the state. And in 2007, he was named National Treasurer and, a year later, president of the state-owned bank, Bandes.
Andrade became a powerful force over the country’s economy. But his critics in the newly formed National Assembly often accused him of corruption and turning the national treasury into Chávez’ personal checkbook.
During a congressional hearing in 2008, an opposition deputy, Ismael García, said Andrade was at the center of a huge scheme involving the National Treasury’s purchase of bonds from Argentina, Ecuador and Bolivia — sovereign bonds that allegedly cost the nation more than $7 billion and benefited mostly a small group of public officials, banks and brokerage firms. His accusations were ignored by the Chavista government.
During his tenure, National Treasury officials were suspected by political opponents of issuing dollar-and British pound-denominated bonds. They were purchased in bolivars by a select group of officials and businessmen linked to the government who benefited from heavily subsidized exchange rates. These transactions instantly provided colossal earnings since the bonds could later be sold in dollars on international markets.
Chávez’s planning minister, Jorge Giordani, said after the president’s death in early 2013 that such corrupt practices had cost the nation more than $20 billion.
Andrade left the National Treasury and the presidency of Bandes in 2010. According to news reports, Andrade moved to the United States soon after leaving government.