CITGO and PDVSA defrauded in the amount of a “few” hundred million dollars

May 22, 2009

In another indication of either the incompetence or the corruption of the Chavez administration, CITGO and PDVSA were defrauded in the amount of US$ 200 to 560 million, depending on the source, by brokerage firm FTC Capital Markets. Both companies sent funds to FTC to be invested in fixed income securities and certificates of deposits, but instead the money was used to cover losses in FTC’s operations and/or invest in higher risk strategies.

Reportedly, Citgo has sued FTC Capital Markets to recover the funds, as FTC gave the company fake statements in order to hide the fraud. The company does not have the capital  to respond for even a small fraction of the amount missing.

Where is the incompetence in all this? Simple, as noted by website Venepiramides, at the end of 2008 FTC Capital Markets had equity of barely US$ 1.1 million and it incurred in losses for 2008 of over four hundred thousand dollars. What was Citgo doing working with such a small outfit and sending hundred of millions of dollars to it? Either those managing the funds were extremely stupid and incompetent or they were getting paid to do so. Obviously, a lot of people failed to do their job and perform the required due diligence. Even local brokerage firms are required to have more capital than FTC did.

This is another example of what happens when there are no checks and balances. Chavez has allowed Rafael Ramirez to run PDVSA at will, losing the old controls and supervision. From suitcases to cases like this, Venezuelans get ripped off by the revolutionary Government everyday. Of course, nobody will be punished for this, so that the corruption, waste and mismanagement will continue.

16 Responses to “CITGO and PDVSA defrauded in the amount of a “few” hundred million dollars”

  1. island canuck Says:

    Is it possible that the two principals involved, a man in NY & a woman in Miami if my memory is correct, are conduits to re-channel this money to people inside PDVSA or other “friends with benefits” .

    Wouldn’t surprise me.

  2. moctavio Says:

    Possible? I would say likely. I don’t say surely because it could also be stupidity, there is a lot of that in the robolution.

  3. Ken Price Says:

    I suspect that, even if Chavez issues accounting information, it will be meaningless. The inmates are running the asylum, and the only requirement for a high position is absolute loyalty to “El Jefe”. Once PDVSA is totally drained of all available cash, it will be replaced by a “new” organization, and the game begins once again.

    Pobre Venezuela, tan lejos de Dios, y tan cerca a Chavez

  4. Robert Says:

    Please let us know if you learn the officers of FTC were from Venezuela. I read about this in the US news- offices in New York, lived in Miami. Bet this case has plenty of twist and turns. The interesting thing is all will be known with the arrests and SEC charges in the states. Who knows what kind of details will come out in trial and the media. Could be more interesting than maletegate!

  5. Omar Says:

    Well Mr. Clamens seems to be an associate with Mr. Moris Beracha in an enterprise called westfalia investments (according to corporationwiki). Arrive to your own conclusions…

  6. GWEH Says:

    yes they are Venezuelans who also specialize in the parallel swap market… I guess tomorrow we will hear about the BCV $1 billion scam … another day, another swindle in Bolivarian Venezuela!

  7. SA Says:

    http://www.securities-analysis.com/nasdr_data.php?eid=4688&tid=8331

    Westfalia Investments, Inc.
    Westfalia Investments, Inc. (CRD #19606, New York, New York) submitted a Letter of Acceptance, Waiver, and Consent pursuant to which the firm was censured and fined $16,000. Without admitting or denying the allegations, the firm consented to the described sanctions and to the entry of findings that it failed to create written records for proprietary short-sale orders showing the present location of the securities in question, whether they were in good deliverable form and the customer’s ability to deliver them to the firm within three business days, or the identity of the individual and firm contacted who offered assurance that the shares would be delivered or that they were available for borrowing by settlement date and the number of shares needed to cover the short sales. The findings also stated that the firm failed to include a symbol indicating that transactions were sell short or sell short exempt in the firm’s ACT reports for short-sale transactions. In addition, the firm effected short sales for NNM securities at or below the current best inside bid when the current best inside bid as displayed by the NNM was below the preceding best inside bid in the security. The firm also effected short sales for securities registered on a national securities exchange at or below the price at which the last sale was reported pursuant to an effective transaction reporting plan. In addition, the firm failed to establish, maintain, and enforce written procedures reasonably designed to achieve compliance with the NASD’s rules including short sales and written records. The firm also failed to maintain records documenting the content of its Firm Element Continuing Education Program and completion of each program by covered registered persons. (NASD Case #C10990179)

  8. SA Says:

    I wonder if this Dominguez( JOAQUIN A. DOMINGUEZ) is related to the Rafael Dominguez below

    List of FTC Brokers:

    1. XXXXXXXXXXXXXXXXXXX Name withheld at the request of person, who was just an employee at the firm.

    2. Enrique Antonio Ocampo

    3. Guillermo David Clamens

    4. Rafael R Dominguez
    ———————————————————————————————

    Detail by Officer/Registered Agent Name
    Foreign Profit Corporation
    WESTFALIA INVESTMENTS, INC.
    Filing Information
    Document Number F95000005979
    FEI/EIN Number 133434260
    Date Filed 12/07/1995
    State NY
    Status INACTIVE
    Last Event REVOKED FOR ANNUAL REPORT
    Event Date Filed 09/24/1999
    Event Effective Date NONE

    Principal Address
    25 COMMERCE DR-2ND FLR
    CRANFORD NJ 07016
    Mailing Address
    25 COMMERCE DR-2ND FLR
    CRANFORD NJ 07016
    Registered Agent Name & Address
    THE PRENTICE-HALL CORPORATION SYSTEM, INC.
    1201 HAYS STREET
    SUITE 105
    TALLAHASSEE FL 32301 US
    Officer/Director Detail
    Name & Address
    Title DCP

    PENALOZA, CARLOS J
    25 COMMERCE DR-2ND FLR
    CRANFORD NJ 07016
    Title CEO

    PENALOZA, CARLOS J
    25 COMMERCE DR-2ND FLR
    CRANFORD NJ 07016
    Title D

    BERACHA, MORRIS
    25 COMMERCE DR-2ND FLR
    CRANFORD NJ 07016
    Title D

    CLAMENS, GUILLERMO
    25 COMMERCE DE., 2ND FLOOR
    CRANFORD NJ 07016
    Title SV

    JOAQUIN A. DOMINGUEZ
    25 COMMERCE DR-2ND FLR
    CRANFORD NJ
    Annual Reports
    Report Year Filed Date
    1996 02/14/1996
    1997 01/15/1997
    1998 03/26/1998

    Document Images

    • Doug Says:

      My name is Doug Tobias and I worked at FTC.I was in no way involved in this whole scheme.Please it is bad enough that I cannot get another job in the industry because I was in this firm but I do not need my name dragged through the mud also
      Thank You

  9. SA Says:

    “MANHATTAN (CN) – Two executives of FTC Capital Markets defrauded Citgo Petroleum and its parent company – Venezuelan-owned PVD Holding – in a “Ponzi-like scheme” involving tens of millions of dollars, the SEC claims in Federal Court.
    The SEC says FTC Capital Markets Chairman Guillermo Clamens and is employee Linda Lopez aka Nazly Cucunuba Lopez, 34, solicited $560 million from Citgo and PVD from April through November 2008 and misappropriated tens of millions of dollars in “unauthorized purchases of securities.”
    FTC, a broker-dealer, promised to use the money for short-term, low-risk investments, but the defendants put it into high-risk securities without investors’ knowledge and prepared phony statements to cover it up, according to the complaint.
    The scheme unraveled in October when PVD requested $41.5 million from its account, which at the time was entirely invested in the illiquid securities, according to the SEC. The defendants allegedly got Citgo to “buy” $42 million worth of FTC bonds from PVD’s account and used the cash to satisfy the withdrawal request.
    Citgo requested a withdrawal of $21.6 million from its account the next day and this time FTC couldn’t pay, the SEC says. Clamens offered several excuses for the failure to remit and then directed Lopez to provide Citgo with a fake wire transfer reference number, but the $21.6 million was never returned, the SEC says.
    Clamens, 45, and Lopez also used money from Citgo’s and PVD’s accounts in August to pay off a Venezuelan bank through another Clamens-controlled entity, Emerging Markets, to conceal a prior fraud in which they sold the bank $50 million in nonexistent notes, according to the complaint. They misappropriated the plaintiffs’ money after the fictitious notes became due, the SEC says.
    A civil lawsuit filed by Citgo and PVD in March accuses the defendants of creating a “slush fund” they used to “finance self-interested, unauthorized and speculative trading in unregistered, risky, illiquid investments in which they had financial interests, the full extent of which remain unknown.”

    http://www.courthousenews.com/2009/05/22/SEC_Whacks_FTC_Capital_Markets.htm

    Does anyone know the name of the bank mentioned above?

  10. revbob22 Says:

    BIV? Stanford?

    Either of those would be the cherry on top.

  11. Arnaldo Garcia Says:

    Well, in the name of justice one must acknowledge that sending all creepy investors to the same bag only adds up to the immense sense of desperation and envy some bloggers and mediocre likes feel at present. Mr Clamens stopped working for Westfalia when it became evident he was not following the same path, as the company shareholders, namely Mr Beracha, et Al. Maybe you should address you queries to them instead of placing nonsense gossips on the web anonymously.

  12. Myme Says:

    Westfalia now called “Global Partners Securities” are boiler room SCAM companies not to be dealt with under any circumcisions or they’ll have your balls…


  13. [...] Hey, remember Guillermo David Clamens and FTC Capital Markets? [...]


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