Banker who facilitated Malta-Venezuela money laundering pleads guilty in US

A German banker believed to have devised an elaborate money-laundering plan to embezzle Venezuelan petroleum funds, has pleaded guilty in a Miami federal court just weeks since his arrest.

Matthias Krull, 44, a German national and resident of Panama admitted that he helped private clients from Venezuela embezzle about $600 million from Petróleos de Venezuela, S.A. (PDVSA), a state-owned oil company, through a foreign currency exchange scheme in 2014. The following year, the embezzlement scheme ballooned to $1.2 billion, according to his plea agreement.

The money laundering scheme reached Malta: according to the Homeland Security Investigations criminal complaint, a hefty portion of this cash was wired to a 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.

Krull was central to this part of the passage of the cash. Now, Maltese police have started a data extraction at the offices of Maltese private investment firm Portmann Capital Management.

The company was identified as the suspect investment firm named in the Homeland Security Investigations criminal complaint, and the Malta Financial Services Authority has ordered it to stop the on-boarding of any new clients and any outgoing transactions from all clients’ accounts held by Portmann. The firm was also fined €62,893 for providing payment services without a licence.

The company is owned by Swiss financier Kurt Portmann and his son Yves-Alain Portmann. MaltaToday is informed Bank of Valletta filed a suspicious transaction report with the FIAU in 2015 before closing the company’s accounts. Portmann last banked with Austrian bank Sparkasse.

Although unnamed, the Miami Herald reported that the co-conspirators named in the Homeland Security Investigations complaint include the stepsons of Venezuelan president Nicolás Maduro, who are accused of embezzling funds from Venezuela’s enormous oil income and exploiting its foreign-currency exchange system to amass illicit fortunes in Europe and the United States: the income from the Petroleos de Venezuela (PDVSA) is the country’s primary source of US dollars and Euros.

Krull, formerly vice chairman of the Swiss bank Julius Baer, admitted joining the conspiracy in or around 2016, when a co-conspirator contacted him to launder the proceeds of the PDVSA foreign-exchange embezzlement scheme. 

Krull used Miami, Florida real estate and sophisticated false-investment schemes to conceal that the $1.2 billion was in fact embezzled from PDVSA. 

Krull also admitted that surrounding and supporting these false-investment laundering schemes are complicit money managers, brokerage firms, banks and real estate investment firms in the United States and elsewhere, operating as a network of professional money launderers.

The Maltese private investment firm that allegedly laundered the ill-gotten proceeds is believed to have received upwards of €20 million for laundering the money at a 4% service charge.

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 included an attachment titled ‘Operation 600k’, which contained worksheets showing 10 transfers from PDVSA from 29 December 2014 through 3 February 2015 totalling €511.9 million.

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.

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