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Big oil traders Glencore, Vitol, name defendants in PDVSA lawsuit on a trading bribe scheme

Energy World

Venezuelan oil company cheated out of $5.2 billion: Boies. Long conspiracy by ‘Helsinge Enterprise' traced in complaint

By Ben Bartenstein and Robert Burnson

Petroleumworld 03 12 2018

Oil trading giants including Glencore Ltd. and Vitol SA paid millions of dollars to a former PDVSA trader to get the inside track on Venezuelan oil deals, according to a lawsuit filed by a trust for Petróleos de Venezuela SA.

The alleged conspiracy, which includes more than two dozen companies and individuals, even has a name worthy of a Robert Ludlum thriller: The Helsinge Enterprise.

PDVSA alleges firms including Lukoil Pan Americas LLC , Vitol , Glencore and Trafigura AG of funneling bribes through several shell companies that were set up by a pair of Venezuelan nationals including Francisco Morillo. Among the officials accused of coordinating the scheme from within PDVSA is company Vice President Ysmel Serrano, a close friend of Venezuelan Vice President Tareck El Aissami dating back to their college days.

“This involves a decade-long conspiracy to corrupt employees, fix bids and bribe officials,” David Boies, the lawyer for the Petróleos de Venezuela SA trust, said in a phone interview Thursday.

Helsinge Conspiracy

The grandiose name comes from Helsinge Inc., an energy advisory and trading firm set up by two Venezuelan nationals in 2004. The two bribed PDVSA employees to help set up a clone of the company's computer servers, according to the 161-page complaint, filed last week in Miami federal court. That allegedly gave the conspirators access to confidential information, including future tender contracts and real-time bids for oil products.

No one was at Helsinge's office Friday in a tower along Miami's main Brickell business corridor, on the same floor as Allianz Global Investors, an operator of pre-schools and a construction firm, among others. The office was part of a Regus Plc-operated workspace, but Helsinge's name neither appears by the elevators -- like most other companies -- nor was it listed next to the door. A Regus receptionist confirmed no one from the company was in.

The cloned server went undetected for eight years, "but the conspiracy started long before that,” said Boies, a veteran U.S. Supreme Court litigator who represented Al Gore in the court case regarding the 2000 U.S. presidential vote count and, more recently, embattled movie producer Harvey Weinstein. “And they did it the old-fashioned way -- with bribes.”

$5.2 Billion

The conspiracy cost PDVSA $5.2 billion in lost revenue, according to Boies. The plot was uncovered by lawyers and a former Scotland Yard detective they hired to investigate, according to the complaint. Some of the information came from a laptop computer hard drive provided by Morillo's estranged wife, Vanessa Friedman, according to the complaint.

Morillo declined to comment by phone. Serrano, who isn't named as a defendant, was at work as normal at PDVSA Friday, according to company spokesmen, who declined to comment on the lawsuit.

Representatives of Lukoil and Glencore didn't immediately respond to requests for comment on the complaint. Trafigura spokeswoman Victoria Dix and Vitol spokeswoman Andrea Schlaepfer declined to comment on the lawsuit.

This isn't Boies's first foray in Venezuela. His firm, Boies, Schiller & Flexner LLP, is also defending the nephews of Venezuelan First Lady Cilia Flores in a federal drug-trafficking case. That defense was funded by Wilmer Ruperti, a Venezuelan shipping magnate who made his fortune under former President Hugo Chavez. Ruperti had worked with Morillo until a feud split the oil traders.

Boies's law firm has also been collaborating with partners in Caracas to secure the release of Joshua Holt, a Utah man jailed for nearly two years on weapons' charges.

A Miami judge assigned to the case on March 5 rejected PDVSA trust's request for a court order temporarily freezing the assets and confiscating the records of some of the defendants named in the complaint. But the judge did direct the defendants not to destroy any evidence.

The case is PDVSA US Litigation Trust v. Lukoil Pan Americas LLC, 1:18-cv-20818, U.S. District Court, Southern District of Florida (Miami).

Story by Ben Bartenstein and Robert Burnson; With assistance by Fabiola Zerpa, Lucia Kassai, and Jonathan Levin from Bloomberg /
03 09 2018

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