Fairfield Resident Sentenced for 'Massive' Bribery Scheme with Venezuelan Official

A Fairfield man was sentenced to four years in prison for his part in a massive bribery scheme with a senior official in Venezuela’s state economic development bank.

Joseph DeMeneses, 45, a managing director of a defunct Wall Street broker-dealer, was sentenced Friday in Manhattan, along with the CEO of the broker-dealer, Benito Chinea, 48, of New Jersey, by U.S. District Judge Denise Cote.

The men carried out a scheme in which Maria De Los Angeles Gonzalez De Hernandez, a senior official at Banco de Desarrollo Económico y Social de Venezuela, or Bandes, was paid at least $5 million in bribes in exchange for her directing Bandes’ financial trading business to the broker-dealer, according to a press release.

In addition to the prison terms, both men received three years of supervised release and DeMeneses was ordered to forfeit $2.67 million and Chinea $3.64 million. Each man was also ordered to pay a $40,000 fine and a $100 special assessment fee.

“Benito Chinea and Joseph DeMeneses paid bribes to an officer of a state-run development bank in exchange for lucrative business she steered to their firm,” Manhattan U.S. Attorney Preet Bharara said in a statement. “Chinea and DeMeneses profited for a time from the corrupt arrangement, but that profit has turned into prison and now they must forfeit their millions of dollars in ill-gotten gains as well as their liberty.”

Previously, on May 3, 2013, Gonzalez, along with two employees of the broker-dealer, Tomas Alberto Clarke Bethancourt (Clarke) and Jose Alejandro Hurtado were arrested on charges relating to this bribery scheme. On June 12, 2013, a managing director of the broker-dealer, Ernesto Lujan, was arrested on related charges as well. Each of these four defendants has since entered guilty pleas.

Prosecutors said that Chinea and DeMeneses participated in the bribery scheme, along with Gonzalez and Lujan, Clarke, and Hurtado, from at least late 2008 through at least 2012 in which Gonzalez directed trading business she controlled at Bandes to the broker-dealer, and in return, agents and employees of the broker-dealer split the revenue that was generated.

During this time period, the broker-dealer generated more than $60 million in mark-ups and mark-downs from trades with Bandes. Agents and employees of the broker-dealer, including Chinea, DeMeneses, Lujan, Clarke, and Hurtado, devised a split with Gonzalez of the commissions paid by Bandes to the broker-dealer.

To further conceal the scheme, the kickbacks to Gonzalez were often paid using intermediary corporations and offshore accounts that she held in Switzerland, among other places, according to the press release.

Prosecutors said as an example, DeMeneses, Lujan, and Clarke used an account in Switzerland to transfer at least $1.5 million to an account Gonzalez controlled in Switzerland. In addition to Gonzalez receiving the bribe payments, other participants in the scheme, including Chinea and DeMeneses, also received millions in proceeds generated from the scheme.

“These Wall Street executives orchestrated a massive bribery scheme with a corrupt official in Venezuela to illegally secure tens of millions of dollars in business for their firm,” Assistant Attorney General Leslie R. Caldwell said in a statement. “The convictions and prison sentences of the CEO and Managing Director of a sophisticated Wall Street broker-dealer demonstrate that the Department of Justice will hold individuals accountable for violations of the FCPA and will pursue executives no matter where they are on the corporate ladder.”