MIAMI (AP) — It was a deal that brought together oligarchs from some of America’s main adversaries.
“The key is money,” the oil broker wrote in a text message, offering a steep discount on shipments of Venezuelan crude to an associate who claimed to be the front of the owner of Venezuela’s largest aluminum company. Russia. “As soon as you are ready with money, we can work.”
The communication was included in a 49-page indictment unsealed Wednesday in federal court in New York charging seven people with conspiracy to buy sensitive US military technology, smuggle oil and launder tens of millions of dollars on behalf of wealthy Russian businessmen.
The frank conversation between the co-defendants reads like a practical guide to circumventing US sanctions – with Hong Kong front companies, bulk cash withdrawals, ghost tankers and the use of cryptocurrency to conceal illicit transactions under US law.
It also shines a light on how wealthy insiders in Russia and its Venezuelan ally, both excluded from the Western financial system, are making common cause to protect their immense fortunes.
At the center of the alleged plot are two Russians: Yury Orekhov, who worked for a US-sanctioned publicly listed aluminum company, and Artem Uss, the son of a wealthy Kremlin-allied governor.
The two are partners in a Hamburg, Germany-based company that trades in industrial equipment and commodities. Prosecutors allege the company was a hub to circumvent US sanctions first imposed on Russian elites after the 2014 invasion of Crimea. Both were arrested, in Germany and Italy, respectively, on charges including conspiracy to violate sanctions, money laundering and bank fraud.
At the other end of the deal was Juan Fernando Serrano, the CEO of a commodities trading startup known as Treseus with offices in Dubai, Italy and his native Spain. His whereabouts are unknown.
In electronic communications between the men last year, each side boasted ties to powerful insiders.
“It’s our parent company,” Orehkov wrote to Serrano, pasting a link to the aluminum company’s website and a link to the owner’s Wikipedia page. “He is also under sanctions. That is why we (act) from this company.”
Serrano, not to be outdone, replied that his partner was also sanctioned.
“He is one of the influential people in Venezuela. Super close to the vice president,” he wrote, posting a link showing search results for a Venezuelan lawyer and businessman currently wanted by the United States for money laundering and corruption.
None of the alleged partners have been charged in the case and are not identified by name in the indictment. Also, it’s unclear what ties, if any, Serrano really has to the Venezuelan insider he cited.
But the description of the Russian billionaire matches that of Oleg Deripaska, who was indicted last month in a separate New York sanctions case. Part of the profits he allegedly funneled to the United States was intended to support an Uzbek Olympic track and field athlete as she gave birth to their child in the United States.
Meanwhile, the Venezuelan is media mogul Raul Gorrin, according to a US law enforcement aide who spoke on condition of anonymity to discuss an ongoing investigation. Gorrin remains in Venezuela and is on the U.S. Immigration and Customs Enforcement’s most wanted list for allegedly orchestrating a scheme to siphon off $1.2 billion from PDVSA, the Venezuelan state oil company. .
A U.S.-based attorney for Deripaska did not respond to requests for comment. Gorrin declined to comment but dismissed other criminal charges against him as politically motivated.
While US sanctions on Venezuelan oil only apply to Americans, many foreign entities and individuals with business in the United States stay away from transactions involving the OPEC nation for fear of being themselves sanctioned.
For this same reason, Venezuelan oil is selling at a very favorable price – about 40% less than the market price, according to the indictment. But such terms of choice require unorthodox maneuvers.
For example, instead of instantly transferring funds through Western banks, payment must take a more circuitous route.
In a transaction this year cited in the indictment – the $33 million purchase of a tanker full of Venezuelan fuel oil – the alleged co-conspirators discussed funneling payments from a shell company to Dubai , named Melissa Trade, to fictitious accounts in Hong Kong, Australia and England. To conceal the transaction, documents were allegedly forged to describe the shipment as “whole green peas” and “bulky paddy rice”.
But as is often the case in clandestine transactions, cash seems to have been king.
“Your employees can come directly to PDVSA with one of my associates and pay them directly. There are 550,000 barrels… to be loaded on Monday,” Serrano wrote to Orekhov in a November 2021 message.
There has also been talk of depositing millions in cash in a bank in Moscow, Evrofinance Mosnarbank, which is owned by PDVSA. It was a major channel for trade with Russia until it was also hit by US sanctions in 2019. The two defendants also considered a possible mirror transaction in which cash delivered to a bank in Panama would be paid the same day at a branch of the same unnamed institution in Caracas, the capital of Venezuela.
But Orekhov’s preferred payment method appears to be Tether, a cryptocurrency that claims to be pegged to more stable currencies like the US dollar.
“It’s faster than telegraphic transfer,” Orekhov wrote of a planned purchase of 500,000 barrels of oil worth $17 million. “That’s why everyone is doing it now. It’s convenient, it’s fast.
However, financial transactions are not the only problem. Crude delivery comes with its own risks as most shipping companies and insurers will not do business with Venezuela and other sanctioned entities. In recent years, the US government has seized several tankers suspected of carrying Iranian fuel bound for Venezuela.
To obscure the oil’s origins, Orekhov and Serrano discussed asking the Vietnamese tanker they were using to turn off its mandatory tracking system to avoid being spotted while loading at “Disneyland” – a coded reference to Venezuela.
Although the ship is not identified by name in the indictment, internal PDVSA shipping documents seen by The Associated Press show it was the Melogy, a two-decade-old tanker detained and operated by a Hanoi-based company called Thank Long Gas Co.
Vessel tracking data collected by Marine Traffic shows the Melogy went “dark” on December 31, 2021, as it drifted empty off the coast of Venezuela near neighboring Trinidad and Tobago. Almost four months later, on April 18, she resumed transmissions, her hull now fully loaded and steaming towards Asia.
On June 9, the ship then transferred its cargo at sea to a floating storage vessel, the Harmony Star, off Malaysia, satellite images show. That same vessel has been identified as part of a wider oil smuggling ring helping Iran, according to research by United Against Nuclear Iran, a New York-based group that closely tracks crude shipments by countries. sanctioned.
Joshua Goodman on Twitter: @APJoshGoodman