Argentina Over costs, money laundering and fraud with no justice

Over costs, money laundering and fraud with no justice

The relationship between chavismo and kirchnerismo materialized with a trust fund that, in 12 years, handled over USD $2.000 million with little transparency, and other bi-national agreements to commercialize products with over costs. The Buenos Aires connection stacked up documents in Justice, where there are 15 cases stuck due to lack of cooperation from Caracas

The Argentinian businessman Juan José Levy never imagined that Chavismo would change his life. He had a pharmacy, a small company that produced medicine in Buenos Aires, till his political connections inside Cristina Kirchner’s government got him close to a business: sell to the Venezuelan state. Since that moment, his life, and most of all his bank accounts gave an unexpected twist.

Levy had declared before the authorities a patrimony of one million Argentinian pesos, around USD $250.000 in 2011. After having proceeded as a lead actor inside the bilateral fund trust between Argentina and Venezuela, the businessman knocked the doors of Argentinian tributary authorities in 2016 to get into the money laundering with 1.400 millions of Argentinian pesos (about USD $93 million at that time) in his accounts, according to the information from the authorities in Argentina.

¿What happened in those five years? Through multiple companies like Laboratorios Elea, Corporación Gulfos and Grupo Núcleo among others, Levy added operations of USD $550 million with Venezuela, selling from medicine, TV decoders, even fabric softeners, always confirmed with the information that appears in different judicial files compiled for Chavismo INC.

Ex – presidents Néstor Kirchner and Hugo Chávez. Photo: La voz.

From the Venezuelan side, some public companies like the National Limited Society of Phones of Venezuela (CANTV) and Venezuelan Industrial Supplies (SUVINCA) received Levy – and other businessmen – to accept triangulated payments via China, connecting through offshore societies in the Caribbean, to end up in secret bank accounts. However, those products came from a much more conventional origin: Buenos Aires.

The bilateral fund finalized when kirchnerismo left power in Argentina in 2016, but the legal investigations continue its long course to try to prove different illegal actions. The legal twists and turns in Argentinian tribunals and mostly, the lack of cooperation with Venezuelan authorities left the Levy case at the edge of closing the case, even when Argentinian judge Marcelo Aguinsky does not have a room big enough to keep all the information about the businessman’s irregular operations.

While the Levy case is walking on a thin line, the justice opened 10 new investigations to determine if a dozen of companies that sold from powder milk and beans to technologic products over charged Venezuela around USD $235 million, just as it was informed by the General Auditing office (SIGEN) in an audit that is already in the hands of justice.

Money laundering, transnational bribery and smuggling are some of the figures that the Argentinian justice is exploring, to give a shape to proof. The judicial hypothesis is clear: there was a fraud to the Venezuela state, from which a group of businessmen close to Kirchner was benefitted, and consequently, the Argentinian officials that made those transactions possible. However, till now the officials from both countries have not rendered any accounts before their local tribunals for those alleged crimes, they are not even being formally investigated.



The Levy case is now close to be filed. After three years of waiting for a response from Venezuelan officials, as part of an official cooperation to advance the file, judge Aguinsky enabled a last option: he asked president Alberto Fernández to take action so Caracas would respond the requests of necessary information to continue with the investigation. There has been no answer in three months.

It has been requested to the Chancellery in repeated opportunities to inform about the international request directed to the Bolivarian Republic of Venezuela, which was received on May 08th, 2018, without any answer till this moment” . This is how the note signed by Aguinsky starts, it is addressed to the Supreme Court of Justice and president Fernández.

I kindly request through you and exceptionally the government of Venezuela to issue the exhort referring to commercial operations of Argentinian individuals and Venezuelan state companies, on which there are suspicions of money laundering, bribery and transnational bribery crimes”, the judge concludes. Afterwards, he enumerated the reiterated requests made to the Venezuelans in order to have an answer – unsuccessfully – about the judicial exhort. International exhorts are not the most efficient way of cooperation due to its long times, which normally go over a year of delay, but it hardly takes more than three years, as it happened in this case.

This is not the first judicial file linked to Chavismo that has difficulties in Buenos Aires tribunals, almost all of them involve directly or indirectly the ex – minister Julio de Vido , who denied before justice that he took bribery on these operations. Another example: the local company Bioart S.A., sold rice to Venezuela for about USD $23 million – through a binational agreement – at a price that would double its value in real market. Judicial sources in Buenos Aires are suspicious that behind this operation it is the Venezuelan minister of People’s Power for Food, Félix Osorio, who functioned as Major General of Army and now he is vice – minister of Education.

There are several hints in between: Juan Manuel De Vido, minister’s son, had an official permission to drive a car property of Bioart, even though he did not appear as employee of the company on the pay roll. On the same line, Vignati brothers, owners of the company, took photos of a private meeting held in Argentina with María Gabriela Chávez, daughter of the Bolivarian leader. Just as it occurred with the binational fund trust case, justice has been waiting for over three years that Venezuela responds the request of cooperation to give continuity to the case.


Vignati brothers, owners of Biart S.A., took photos at a private meeting in Argentina with Chávez’s daughter. Photo: @Maby80

Guido Antonini Wilson’s suitcase is another prominent example, it also suffered complications. There is the suspicion that those USD $800.000 that the Venezuelan tried to enter in Argentina illegally in 2007 were destinated to finance presidential election of Cristina Fernández. The case was about to prescribe in 2018, but finally it was reactivated almost by chance and now, thirteen years after that finding, there will be an oral trial in Buenos Aires. It involves former kirchnerista officials that flew together with the Venezuelan in a private jet.

Argentina is not the only country where cases go forward difficultly. Chavismo INC. identified 86 investigations for corruption with Venezuelan funds in 21 countries around the world. Outside United States, where there are 38 different cases in district courts, there are investigations distributed in Colombia, Brazil, Dominican Republic, El Salvador and Ecuador, among others. Even when the cases have been scandalous and involve more than USD $30.000 million, there are no government officials accused or condemned, according to the estimations on this investigation. There is friendship, affinity and the difficulty to investigate laundering without cooperation, it has delayed the advance.

Despite the actions initiated by Judge Aguinsky before the highest level of politics and justice in Argentina to solve the Levy case, the tribunals are not very optimistic either regarding good news to come. The regret of justice about the future of that case is more notorious in last months.

During an open virtual meeting, president Alberto Fernández expressed to former president “Lula” da Silva that he missed Hugo Chávez. The “friendship” with the Bolivarian leader is a long time one: the current Argentinian president was Néstor Kirchner’s Head of Cabinet when he organized the ALCA counter-summit in Mar del Plata, 2005. While George Bush was negotiating his free trade agreement for the region, those two were going up the stage together with “Lula” and Evo Morales to officialize the launching of ALBA and give 21st Century Socialism more visibility.


Former presidents Kirchner, Chávez and Lula, a friendship that transferred to current Argentinian president Alberto Fernández. | Photo: Ricardo Stuckert (Brazil Agency).

Probably due to this ideologic heritage, Argentina was one of the countries that abstained this year from condemning Nicolás Maduro’s abuses before American State Organization. Just another sample of good bonds kept by kirchnerismo and the Venezuelan regime, even when the subject provokes differences inside the official alliance.

The lack of collaboration from Venezuela regarding the Levy case buried the hypothesis that there was a transnational bribery driven by Argentinian businessmen, so the Venezuelan chavista officials could commit fraud to Venezuela. It weakened the possibility to prove money laundering, by not being able to stablish the precedent crime, a necessary condition for judges of the Cassation Chamber – the highest criminal court – which already warned about the unfeasibility when reviewing the case under this figure, just as stablished by local laws.

A known judicial official suggested that the only accusation that could probably be proven to Levy under the Argentinian Criminal Code is smuggling. “just like happened with Al Capone”, summarized. ¿What do you mean? I mean an accusation that is – argues – easier and maybe the only possible to prove. A more accessible condemn based on the local proof – if Venezuelan silence persists – but this would allow the businessman to avoid jail due to the low penalty.

Rafael Sal Lari , former judge and Levy’s lawyer, affirms that the contracts signed by his customer were “legal and legitimate”, he adds that fluctuations of the criminal cause are consequence of a “biased investigation of prosecutors, who gave a political matrix to the facts”.

The trust fund that moved around USD $2.000 million between 2012 and 2016 was a kind of compensation mechanism from Argentina for all the facilities given to them by the State company PDVSA when the country was not able to find financing in international markets. To equilibrate the scale, Argentina channeled exports of some products needed by Venezuela, such as dairy or frozen poultry. Also, kirchnerismo opened the door to local businessmen, to make businesses with Caracas.

The implementation and functioning of this trust fund was, mostly, a work of Argentinian official José María Olazagasti, right hand of former minister Julio de Vido and strong man of the “parallel embassy” in Venezuela. The communication media gave that name to the business source stablished by the Argentinian minister with Chavismo, which worked more as an influent relationship than diplomatic formalities, because it led directly to Kirchner on one side and Chávez on the other.

In the meantime, Víctor Aular in Venezuela was Finances Vice – President at PDVSA and was in charge of controlling the exchange, information sources confirmed. Aular knew about compensation and exchanges with Venezuelan oil because he was also the official who signed conciliations of payment processes for oil loans granted to Caribbean countries. Those loans were attached – in many cases – to businesses and diplomatic winks, as revealed in the journalistic investigation Petrofraud, published by CONNECTAS in 2019 in alliance with Latin American media.  


The Levy case is a clear example of how, in practice, binational trust fund worked. His companies had signed contracts with up to 300% overprice with chavista’s government to sell products that he did not manufacture. Laboratorios Esme S.A. sold fabric softener at USD $2, but for the Venezuelan state it went up to USD $8.

There are too many examples and comparisons around overpricing on the judicial file. Laboratorio Esme exported a liter of hair shampoo to Chile at USD $0,67, while the same product, invoiced to Suvinca costed USD $1,87. This public Venezuelan dependency also paid higher prices for Argentinian products, purchased by others in its internal market, like the acquisition of adult diapers.

There were more advantages: Venezuela paid in advance 60% of the contracts. The scheme, with minimum differences, repeated with other products until Levy added an invoicing of USD $550 million on sales to Venezuela.

It is false that goods have been sold over the market price. The product price is relative and adjusted to every market. The ones offered and accepted by Venezuela are adjusted to the commercial juncture proper of that country”, Argued Sal Lari, Levy’s Lawyer. He also added: “Venezuela was an absolutely risky customer in an identical political context”.

Former minister Julio de Vido with Venezuela’s ex – president Chávez. | Photo: LPO.

Levy’s standard of living grew up along with Venezuelan contracts, which accumulated. He moved to a private neighborhood, sent his children to the best schools in Buenos Aires, acquired properties in Miami, bought luxury cars, enlarged his production facilities and also invested on a radio station in Buenos Aires. .

Levy does not have any relationship with Olazagasti (ex – minister de Vido’s right hand) beyond any eventual social contact or having randomly coincided on the same flight to Venezuela as passengers, but without that trip being programmed by his company”, his lawyer defended. The casual trip mentioned by his lawyer occurred in March 23rd, 2012. Coming from Caracas, Levy went through Argentinian Migration at 23:49:13 and Olazagasti, key official at the “parallel embassy” at that time, registered his passport exactly two seconds before, according to the judicial information.

Levy knitted a network of societies for the trust fund operations, in fiscal paradises like Panama and the British Virgin Islands – always according to the file statements – which encapsulated bank accounts and properties abroad. He even created a firm in China to purchase goods from a local provider and then inflate the price and sell from his company in China to another of his companies, but with a higher value. That is the way how he intended to evade the overprice accusations, according to the judicial file. To his surprise, it was detected when Levy laundered his patrimony before the tax authorities in Argentina.

Despite the ups and downs in Argentinian tribunals, the levy case opened the door to see other irregularities inside the bilateral trust fund: there were dozens of companies that sold to Venezuela with prices over the market value.

The General Auditing office, by request of prosecutor Pablo Turano, determined that around 15 Argentinian companies summarized a total overprice of USD $235 million in products invoiced to Venezuela. The control organism came to this conclusion after comparing the invoices paid by Venezuela to witness prices of the same products sold in Argentina, prices only variable by freight value.

The official report of the General Auditing office accelerated the opening of 15 different legal cases, each one meant to analyze overprices invoiced by Argentinian companies. On the first proof measures before the judicial recess imposed by Coronavirus, prosecutor Germán Bincaz, boosted ten of those investigations and other 5 denounces were closed, according to official sources.

The prosecutor already requested proof measures over companies Soychú, Cresta Roja, Tres Arroyos and Rasic Brothers, for sale of frozen poultry, that, together, sum up overprices for USD $14 million, according to Sigen’s report.

SanCor dairy company charged powder milk with 23% over the regular price in the local market. It implied overprices of USD $ 95 million, according to the control organism calculations. The company responded that the commercial relationship with Venezuela was not secure and that, before the possibility that the country would not totally pay the products, the prices were higher.


Dairy company SanCor justified over costs with the fragile situation in Venezuela | Photo: La Nación.

Other arguments expressed by the companies when they were inquired by journalists, was the difficulty of logistics and high prices that they had to pay for goods transportation. But, above all, there was always the fear that Venezuela would not pay, even when a great part of the goods was paid in advance.

The new ongoing judicial investigations also include another food company, Paramérica S.A., and from other areas like Unitek and Invap. It was informed by the tribunals. This last case is the most tragic: the company sold radiation equipment for cancer patients, but when Venezuela did not pay, Invap did not continue with maintenance of the equipment (provided in the contract). This situation motivated that hundreds of these cancer patients were affected in their treatments. In its moment, Venezuelan authorities admitted that they had problems with preservations of the equipments.

Justice already required information from the Argentinian fiscal authority about the different operations, also from customs and other public entities to review the sales of those companies during and after having participated on the binational fund trust. There are no news expected till the end of the year, due to the remote work imposed by the sanitary crisis.

However, the investigators are not very optimistic. In first place, because the Chamber of Appeals provided 10 files separately, instead of interpreting that it was all part of the same maneuver and, in consequence, one investigation. “That would have made the case to be heavier”, said one of the magistrates, who preferred not to reveal his name while the cases are still ongoing.

There are more mitigations: the slaps received by the Levy case, the “mother case” of all these incipient files, stablish a negative precedent, they state in tribunals. And there is more: if the crime is founded on overprices, it is one of the irregularities with more difficulties to prove before the courts in Argentina during the last years. Finally, it is necessary to add the lack of cooperation from Venezuela, which local authorities already exclude. A difficult combination to reverse.

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