Dominican Republic The contractor’s clan who hide their fortune in the Caribbean

The contractor’s clan who hide their fortune in the Caribbean

Businessmen close to chavismo, some escaping from justice, landed in the Dominican Republic and dedicated to a millionaire business in one of the great poles of Caribbean tourism, Punta Cana. One of them is the visible face of a USD $100 million project

A clan of Venezuelan businessmen, who were privileged in the past as public contractors during Hugo Chávez and Nicolás Maduro presidencies, slip through the traditional families of the Dominican Republic that control the tourism business in the country to impulse a project of USD $100 million in one the Caribbean golden destinations: Punta Cana. There, the luxury resort and hotel industry attract more than three million tourists every year.

The development powered by the former contractors linked to chavismo counts on approximately 150.000 square meters that include corporative spaces, residential, hotels, night clubs, restaurants, stores, gas stations, an artificial lake and even a dolphinarium. It has been baptized with a name that seeks to add a cosmopolitan shade to the brand: Downtown Punta Cana. It is located in an area that connects to Bávaro, another of the great Dominican touristic poles, at the side of a road that locals call Coco Loco Crossroad.

While Venezuela was submerged in uncertainty and prepared for Chavez’s death in 2013 and Maduro’s raise into power, Luis Francis, instead, was rubbing his hands before giving his greatest hit on the Caribbean. The former contractor from Oils of Venezuela, (PDVSA), the state corporation that one time was one of the largest companies in the world, presented himself as the visible face of the group that develops the touristic project. He even flanked the Dominican president Danilo Medina in a ceremony to initiate the construction of Downtown Punta Cana.

 

Dominican Republic president, Danilo Medina in the inauguration of Downtown Punta Cana.

Francis Moreno is the visible face of a clan moulded during years, which reunited in several properties and Dominican companies a handful of businessmen that amassed great fortunes through contracts with the Venezuelan oil industry. Next to him, and in low profile, there are Urbano Fermín brothers, whose company Cuferca also offered services for years to PDVSA and even formed a mixed company with the state oil company, till they fell in disgrace in year 2017.

Today, Urbano Fermín businesses in Venezuela are under the magnifying glass of judicial power of that country, but in the Dominican Republic they are still active. Brothers Carlos Eduardo, Carlos Enrique y Carlos Esteban were accused in 2017 by the Venezuelan district attorney for an alleged defalcation through the contracts obtained in the Orinoco oil belt, the humongous crude oil reserve located at the Venezuelan orient. Carlos Esteban is detained since September that year in Venezuela, after the district attorney´s imputation for alleged crimes of willful embezzlement, association to commit a crime, money laundering and conspiracy to commit a crime between official and contractor. It was done through Constructora Urbano Fermín C.A. (Cuferca). There are also arrest orders against Carlos Eduardo and Carlos Esteban since then, but that has not broken the entrepreneurial bonds they keep with the Dominican Caribbean.

Meanwhile, Francis Moreno and his sons, put up their faces for the millionaire touristic project since a decade, when they landed in east Dominican Republic.

Chavismo INC. identified 51 interactions with persons of interest, people, companies or institutions in Dominican Republic. Some of them have been investigated by the country’s justice in cases of alleged crimes of money laundering and fraud through processes like Banco Peravia’s one, which involved shareholders of Seguros Constitución. Also, the Dominican Prosecutor, before a request from authorities of United States, activated a search in the country against Samark López. He is the alleged front man of Tareck El Aissami. The search was made in May 2019 and several raids were done in different properties that López had in Punta Cana, but there were no great findings.

The information was obtained after tracking judicial cases, companies and patrimony of persons linked to chavismo in 69 countries. With the information, a data base was built, which shows an approximation to patrimony and relations of these persons. The initiative of transnational investigation from Transparencia Venezuela, local chapter of Transparencia Internacional, the Latin American Platform of Journalism CONNECTAS and the Rebel Alliance Investigates (ARI), in which participated journalists and investigators from Venezuela, Argentina, Panama, Spain, United States, Dominican Republic, El Salvador, Nicaragua, Uruguay and Bolivia. It gathered information that renders account of the magnitude of chavismo operations inside and outside their country: the gears of Bolivarian capitalism in the world.

From an orient to another

Luis Francis Moreno’s business adventure in Dominican Republic was launched in 2010, three years before starting Downtown Punta Cana project. As a family entrepreneurship, the company Construcciones y Minería Virgen de la Altagracia (Conmivial), of which he is president since 2010, was the point of departure for a successful journey on the island. In less than a year, the company started having important contracts in the Dominican east region.

According to accounting reports to which Chavismo INC. had access, Conmivial offered services as contractor for Grupo Punta Cana – the company that transformed that part of the country in one of the largest touristic destinations on the Caribbean – providing materials like concrete and blocks and road constructions for hotels and airports. Also, among their customers was Constructor Norberto Odebrecht for one of the works with overprice investigated in Dominican tribunals: the road Bávaro-Uvero Alto-Miches- Sabana de la Mar, around 112 kilometers of road that costed USD $370 million, and an estimated 30% over cost. For the soil movement on the Miches section, Francis Moreno’s company charged USD $302.000 between March and June 2013.

Conmivial not only has been the business that worked as starting point in Dominican Republic but also the parachute of all investments that they have done in the island: under the name of the family construction company there are: Downtown Punta Cana Services, Dolphin Discovery, Downtown Punta Cana, Downtown Dolphin, Downtown TV, DTRH Downtown, Downtown Hotel Punta Cana and even the Foundation Downtown.

 

Downtown Punta Cana, a project of 150.000 square meters with an investment of USD $100 millions for casino, lake, hotel, mall, residential and sports area. | Photos: Francesco Spotorno.

But those are not the only companies. Two of Francis Moreno’s sons, Luis Eduardo and Luis Ramón Francis Villegas not only are in charge of leading project Downtown Punta Cana, but are also partners of Urbano Fermín brothers in several companies shared in Dominican Caribbean. On the island, they share actions in the companies Transportes y Servicios del Caribe TSC, Concrete del Caribe GUF, Constructions del Caribe and Agregados y Servicios del Caribe ASC.

The property registers reviewed for this investigation reveal joint companies focused on construction and property operations in the east region of Dominican Republic. Those companies later expanded to recreation and soccer academies. Among Francis and Urbano Fermins there are at least 25 companies registered in Dominican lands, without counting the societies shared in Panama.

The Venezuelan businessmen clan that grown besides chavismo, via collection of public contracts, settled their economic empires on the Caribbean thanks to investments, mostly, in real estate businesses.

In good shade

While the Francis Moreno prepared the route for its stellar moment in Dominican republic, the Urbano Fermin were owners of Cuferca, a powerful contractor with which Pdvsa signed contracts without stop for transportation of coke and sulfur, handling of solids and even the rent of heavy load machinery for Petropiar and Petroanzoátegui operations in the Orinoco Oil Belt. The brothers managed to have contracts with Anzoátegui government, located in the oriental Venezuela, for construction of a municipality market in Puerto La Cruz in 2008, that, according to journalistic reports, was not finished.

A report from the Socialist Body of Inspectors, an organ subscribed to the Presidential Office of Venezuela, pointed the strong connection of the Urbano Fermín clan with Jonathan Marín, who was functioning then as Guanta Municipality Major, a town located north east from Anzoátegui. The influence of brothers was such, affirmed the socialist inspectors in their report, that in more than one opportunity, Marín – banned to function in public positions by the Comptroller in June this year due to alleged corruption during his municipality management between years 2009 and 2017 – mediated personally on the labor conflicts kept by workers and Urbano Fermín for infringements.

On the inspection it was written down that those contracts violated the regular procedures to offer services to the state oil industry. For handling and carrying of coke, PDVSA initially contracted the company Energy Coal, but as it had no experience in the oil area, they sub – contracted other companies, among them Cuferca. This was explained by the executive director of the Orinoco Oil Belt himself, Pedro León Torres, to the socialist inspectors while they did the audit. It was recorded in the document.

The clan’s power was increasing and, after four years of services for the Belt companies, in November 2014 Pdvsa and Cuferca sealed the alliance with the creation of a mixed company, Servicios Logísticos Petroleros Orinoco. Three months later, in February 2015, the Urbano Fermín registered their first company in the Dominican Republic. They partnered with Luis Eduardo and Luis Ramón Francis Villegas, sons of Francis Moreno. Chavismo INC. tried to obtain comments from Luis Francis Moreno about his businesses in Dominican Republic but there was no answer at the moment of closure of this publication. Through him, it was also sought to locate brothers Urbano Fermín, with no success either.

Pedro León, former directive of the Orinoco Belt and who during years signed contracts with Cuferca, was detained for alleged crime of Orinoco Belt’s defalcation in September 2017. He was just landing at Porlamar airport, Nueva Esparta state, after arriving from Dominican Republic.

 

Luis Francis Moreno and his sons, Luis José and Ramón, accompanied by Miguel Ricart | Photo: Diario Social RD.

The cat´s friend

The mechanism to escalate in businesses and lever the entrepreneurial influence over the regional governments and the state oil company was a route already transited by his partner Francis Moreno. Before his Dominican leap, he already had a history in Venezuela, one of contracts with PDVSA and, most of all, with Monagas government through his company Construcciones y Asfalto San Antonio (Consanto).

During the mandate of chavista leader José Gregorio Briceño, known as “El Gato”, Consanto entered in the select group of companies benefitted by the government tenders controlled by Briceño between years 2004 and 2012. The problem was that assignment of contracts few times accomplished the procedures demanded by laws, a matter that was evidenced since 2008.

That year, the General Comptroller of Monagas gave the first alarm and said in its yearly report that in 2006 the Institute of Roads and Transport of that state had allocated directly nine contracts in irregular way and that in one of those cases a tender should have been made, no matter that already existed a decree of emergency, due to the elevated amount of the contract. But also, a 50% down payment was paid to Consanto and the company paralyzed the operation without notifying the authorities, just as regulations dictate.

But it was not till 2012 when the sub – commission of the National Assembly Comptroller started to see with magnifying glass the operations of “El Gato” and his circle of favorite businessmen, among which was Francis Moreno. In October the parliamentary instance started to investigate the processes through which the contracts were delivered for a tender of Perimeter Avenue of Caicara de Maturín, Monagas, and the way Maraquero-Crucero of Viento Fresco sector, also in the municipality of Cedeño.

The investigation was not casual. In March that year Briceño criticized, during a tv interview, the handling done by Hugo Chávez’s government to an oil spill produced in Monagas, that polluted the river that supplies water to Maturín, the state capital. The United Socialist Party of Venezuela (PSUV) initiated a disciplinary process against him and then expelled him from Chavismo ranks. On the Globovisión interview, the then governor of Monagas had said to not have problems with Chávez, who ruled Venezuela at that time, but he did have trouble with Diosdado Cabello, president of the National assembly and born in Monagas.

Since Mr. Diosdado Cabello arrived, what he did was to look for everybody who was enemy of “El Gato”, get them into PSUV party to try to disrupt the state government (…) and now he left me this wolf pack here”, said the regional leader during the interview.

After the expulsion, Briceño tried to maintain in Monagas government, by running for independent candidate, but he did not make it. In January 2013 he travelled to Costa Rica, where he requested asylum.

 

A controverted stop

Dominican Republic not only has seen Francis and Urbano Fermín families pass. There are others who have landed on the island to make investments or purchases questioned later, that have seen their businesses intervened, their houses raided or even being judicially investigated.

The list includes businessman Samark López, the alleged front man of Tareck El Aissami, who affronts criminal charges in USA for violation to the law of Foreign Narcotics Kingpin Designation Act. His house, situated in the luxury area of Cap Cana was raided by Dominican police in middle 2019, in the midst of an investigation of which details were never revealed.

Omar Farías Luces from Seguros Constitución; José Luis Santoro and Gabriel Jiménez Aray from Banco Peravia, ended up with their companies intervened, by Dominican authorities. Santoro was detained in Venezuela in 2016 and the country denied extradition requested by Dominican Republic. Jiménez Array was condemned by an USA tribunal to three years of prison in 2018, after confessing that he helped media businessman Raúl Gorrín Belisario to launder through Banco Peravia the money coming from bribery to officials. A written consultation was sent to Gorrín but there was no answer at the end of this edition.

Farías Luces was included on the judicial file due to Banco Peravia’s bankruptcy as accused, and he came to be under domiciliary arrest. But, with a private judicial agreement, he was left outside the file. He was pointed as co-author of alleged active laundering made through the Caribbean bank institution. Chavismo INC. contacted Farías Luces to obtain his version but he did not give any answers. In 2016 his lawyer Erick Hernández said that his represented only have had a relation “in his condition of customer, with operations completely licit” with Banco Peravia.

Another Venezuelan who settled down in the island was Danilo Diaz Granados, one of chavismo’s favorite financial operators. He has lived in La Romana for a decade, in the east region of Dominican Republic, where he appears sometimes in the local social media pages promoting projects with San Pedro de Macorís communities, the province where he resides. The Commerce Chamber of Santo Domingo registers a company under his name: Inversiones Halis, a company dedicated to purchase and sell of properties.

Other visitors linked to chavismo in Dominican Republic were the couple formed by Adrián Velásquez, former aide of the late President Hugo Chávez and the former Treasurer of Venezuela, Claudia Díaz Guillén. In Panama Papers they appear with companies registered in fiscal paradises and linked to Diaz Granados. They resided in the Dominican Republic between 2014 and 2017, when they established their new residence in Spain. The next year, in April, they were arrested due to an international arrest order requested by Venezuela. There was also a parallel judicial investigation followed by Spanish authorities. In both cases they are accused of capital laundering and illicit enrichment. They have denied those charges.

The gateawat to the Caribbean

In March 2012, a week before El Gato Briceño appeared on a tv channel criticizing central government’s handle of the oil spill and his expulsion from the ranks of chavismo, Luis Francis Moreno registered in Dominican Republic a company denominated Reef Bay Investments that would be the definitive link to enter the exclusive world of tourism development on the Caribbean island. Through that company, and also with Inversiones Mi Retiro S.R.L., registered four months later, sealed the alliance with Dominican businessman Miguel José Ricart Nadal, who has been his inseparable partner on the project Downtown Punta Cana. His influent allied centers his businesses on the combustibles distribution in Dominican Republic, he is media actionist and even president of the Nautical Club and who worked as definitive contact to enter to enter the tourist development pole on the Dominican east.

Today, Francis Moreno, the same that few media mentioned during that beginning of the construction act took place and to which President Medina attended, is a businessman with little exposure at national level, but already known in Punta Cana environment. Downtown development is conjugated in present and keeps adding businesses to what was one time a lost place on the edge of a highway, thousands of kilometers from the land in which everything started. Meanwhile, Carlos Eduardo and Carlos Esteban keep their low profile under the shades at their Caribbean refuge.  

 

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