Maltese bank filed suspicious transaction report on Portmann in 2015

Bank of Valletta filed a suspicious transaction report in 2015 over its former client, a wealth management firm now investigated by the US for money laundering from Venezuela.

BOV was banker to Portmann Capital Management up until June 2015, but cut its clients loose when it closed its accounts and filed an STR with the Financial Intelligence Analysis Unit over specific transactions made by the company.

Portmann is owned by Swiss nationals Kurt Portmann and Yves-Alain Portmann, but is registered as a Maltese company.

Portmann have now been sent a minded letter by the Malta Financial Services Authority expressing concern on reports implicating it in the US Homeland Security investigation filed in Florida.

The firm has been asked not to open any new accounts or take on any new clients, to which Portmann has already reportedly complied.

Police investigators on Tuesday also extracted data from the servers of the company, The Times reported, to secure information on wire transfers and other contentious material.

The spotlight has also turned on Austrian bankers Sparkasse, with whom Portmann banked after BOV discontinued its banking relationship in mid-2015, with both the MFSA and the Financial Intelligence Analysis Unit planning an inspection into its internal processes.

TheMFSA had already fined Portmann Capital Management €62,000 earlier this year. According to Portmann’s last filed accounts, the Maltese financial regulator carried out a site visit at Portmann Capital Management in 2016, where the MFSA instructed Portmann to cease providing payment services on behalf of its clients – the activities were deemed by the MFSA as falling outside the company’s investment services licence. Portmann later said it was applying for a payment institutions licence.

The Times of Malta reported last Sunday that the FIAU was planning to fine the company €350,000.

A source privy to the investigations said both the FIAU and the MFSA had been analysing the situation for a long time. “No authority can simply barge in on a private company and shut it down. Many of these investigations take time. It’s a matter of both due process and reputation: being trigger-happy at the first sign of irregularity can send the wrong signal.” 

Portmann has been implicated in the American investigation on a series of Venezuelan officials and collaborators, including President Nicolas Maduro, who are suspected of having laundered US$1.2 billion in funds pilfered from Venezuela’s state oil company, the PDVSA.

Portmann ‘unaware’ it is being investigated by US

A director for the company told MaltaToday that Portmann was not aware that it is the company identified in the Florida court complaint.

Portmann Capital Management was set up in 2011 as a subsidiary of XPCT Limited, whose two shareholders are Swiss nationals Kurt Portmann, a Dubai resident, and Yves-Alain Portmann. It had first registered its bank account at HSBC Malta through the offices of legal firm Ganado & Associates.

Kurt Portmann is the founder of private equity firm Portmann Finances SA of Switzerland, and has served as a director on various energy and oil and gas firms. He is the founder-chairman of London brokers Optiva Securities. Neither Kurt or Yves-Alain Portmann are mentioned by name in the Miami court complaint.

According to the Homeland Security Investigations criminal complaint – which the Miami Herald said concerns Venezuelan president Nicolás Maduro – his stepsons helped launder US$1.2 billion in funds pilfered from Petroleos de Venezuela, of which point a hefty portion was wired to the Maltese intermediary between late 2014 and early 2015.

Using a series of fraudulent bond issues and investment funds, around €511 million in 10 wire transfers was laundered through Malta, according to the criminal complaint.

The eight defendants named in the complaint are accused of taking advantage of their special access to the Venezuelan government’s foreign-currency exchange system, which offers a far superior rate of exchange than the normal market. That access was allegedly used to convert bolivars into dollars and euros as the defendants plundered the country’s oil riches.

While the Maltese private investment firm that allegedly laundered, the ill-gotten proceeds was unnamed, the criminal complaint says it received upwards of €20 million for laundering the money at a 4% service charge.

Money laundering investigation

The alleged money-laundering conspiracy began in December 2014 with the currency-exchange scheme to embezzle the PVDSA revenues. But the defendants’ associate later became a confidential source for the US investigators, who approached Homeland Security investigators in Miami about cooperating in 2016.

According to US wire taps, the organiser of the scheme is Mathias Krull – a 44-year-old German national and Panama resident – who was said to have devised a way of putting US$200 million held in a Maltese financial institution in the name of a straw owner.

The emails show Krull talking about the money’s movements to and from Malta. In the court documents, it is reported that the confidential source asked, “Are these the guy’s sons?” – a reference to Maduro’s stepsons – to which Krull responded, “Nah. Don’t, don’t, don’t ask.”

Krull, who was arrested at Miami International Airport in July, is seen in the emails acknowledging receiving money from the Maltese institution and assuring the confidential source not to worry about the Maltese institution.

The complaint named Venezuelan national Jose Vincente Amparan Croquer, aka ‘Chente’, as a “professional money launderer” who is associated with “‘European Financial Institution 1’ in Malta, a private investment firm, which he uses to launder money.”

Investigators used email search warrants

US investigators used email search warrants to confirm the flow of the funds “from PDVSA to the defendants and other conspirators through European Financial Institution 1” (the Maltese institution).

One email includes an attachment titled ‘Operation 600k’, which contained worksheets detailing the illicit cash flows from Venezuela to Malta.

A work sheet titled ‘Detailed Income from PDVSA’ shows 10 transfers from PDVSA from 29 December 2014 through 3 February 2015 totalling €511,913,270.74.

Another worksheet called ‘Summary of the 600 Operation’ shows that of this money, €20.4 million was assigned to the Maltese ‘European Financial Institution 1’ as a 4% fee; €227 million went to Venezuelan conspirator Francisco Convit Guruceaga, €159 million to Maduro’s stepsons, and €68 million to conspirator Raúl Gorrín, owner of the Globovision television network in Venezuela.

Raúl Gorrín is also said to have sent dozens of US dollar wires through banks in Malta and Austria, including to aviation and yacht services as well as brokerage companies in Miami, Florida.