In May 2013, the former chief executive and a former managing director of Direct Access Partners, a now-defunct broker-dealer, were arrested in Miami for attempting to bribe Venezuelan officials. And now, in court on April 14, the two are charged with a host of improprieties, including bribery, money laundering and obstruction of justice.
Former CEO Benito Chinea and former managing director Joseph De Menses are accused of paying $5 million in kickbacks to Maria de los Angeles Gonzales, a vice president of Venezuela’s state-controlled bank Banco de Desarrollo Económico y Social de Venezuela, in exchange for government contracts. The scheme involving Chinea, De Menses, and three other Direct Access Partners employees helped lead to the broker-dealer’s collapse.
At the indictment, both Chinea and De Menses pleaded not guilty to all 16 charges against them. Gonzalez pleaded guilty to separate charges against her in November 2013 and is scheduled to be sentenced in August. The other three Direct Access Partners employees — Ernesto Lujan, Jose Alejandro Hurtado and Tomas Alberto Clarke Bethancourt — pleaded guilty in August 2013.
Perhaps unique to this case is that Chinea and De Menses not only face crimes under the Foreign Corrupt Practices Act (FCPA), but also under the less-used but still powerful Travel Act. As InsideCounsel reported in July 2013, the Travel Act allows prosecutors to pursue bribery-related criminal activity that does not violate federal law at face value. The Travel Act prohibits “traveling in interstate or foreign commerce or using the mail or any facility in interstate or foreign commerce” to further any unlawful activity.
The U.S. has seen an uptick in bribery penalties in 2014 after a slow 2013 in FCPA enforcement. Alcoa and Hewlett-Packard have each paid more than $100 million for FCPA violations, and a host of others have been charged under the Act.
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