The Mystery Check For Bs. 300 Million Found In The Hands Of A Former Iranian Minister Of Finance

February 7, 2013

German customs

When reader Arco posted this link as a comment, saying (or translating it): “On the border of Holland and Germany in Dusseldorf, a man from Iran was arrested for having a check for 300.000.000 Bsf (54 million euro) from Banco Venezuela in his suitcase. He could not explain why or for whom he had so much money. He risks a fine of more than a million euro. Check is confiscated.”, I found the news so strange, that I not only went to the web, but contacted Caracas’s two largest newspapers to see if they knew anything about it.

But they didn’t.

Then reader Gold, translated a story in Die Welt and I decided to Tweet it, to see if I could get more info on this mysterious matter. Soon afterwards, El Universal published a note, then El Nuevo Herald and soon afterwards, the Iranian Embassy in Caracas tried unsuccessfully to explain the thing away.

Which made it even more intriguing.

Think about it: An Iranian man arrives in Germany from Turkey, fails to report that he is carrying more than 10,000 euros in financial instruments, a check for Bs. 300 million (more than US$ 60 million at the official rate of exchange) is found in his briefcase and he seems to care little if the check is taken from him.

What is wrong with this picture?

1) A check in Bolivars is useless, unless you are in Venezuela, due to the absolute exchange controls the country “enjoys”

2) Why do you need to bring it from Iran, to anywhere? Why not declare it, given that most countries just want to know that you are carrying it, they seldom do much about it. Why take the risk?

3) Why doesn’t he care?

Easy. First of all, this was not just a “man”. This was Tahmasb Mazaheri, a true insider in post revolution Iran, former member of the Iranian Central Bank, former Minister of the Economy and Financial Matters.

Except that the Iranian Embassy in Caracas, says it is not the same Tahmasb Mazaheri, but somebody else. Then Russian webpage Russia Today, reports that the “true” Mazaheri denies having been detained:

Iran

except that the Iranian Ambassador comes out and says that there was no irregularity in the check and that the man was indeed the former Minister, who is an adviser to the Kaystor company of Venezuela, who is participating in the “Gran Mision Vivienda” by building 10,000 housing units and recently receiving a new contract for an additional 10,000.

Even aporrea.org, got into the act, saying this is much ado about nothing (can’t find post now) and this is Iran’s heroic aid to Venezuela in building housing.

Then,the local Kaystor company (located in Parque Cristal, Los Palos Grandes) says that the important Tahmasb Mazaheri, has been an advisor to Kaystor for the last year and has been visiting the country every two or three months. That having Mr. Tahmasb Mazaheri carry the check is the same as any “messenger” and there is no irregularity, because the check can not be cashed anywhere but in Venezuela.

Except that the laws are the laws and if you have more than 10,000 euros in cash or financial instruments, you have to declare it in Germany and Mr. Tahmasb Mazaheri, was carrying US$ 69 million at the official rate of Bs. 4.3 per $, US$ 56.6 million at the Sitme rate of Bs. 5.3 per US$ and “only” 16.66 million at what I am told the unnamed black market rate is at today.

Thus, we are told that this is Mision Vivienda money, which we don’t know why the checks have to be written in Teheran and carried by such an expensive messenger.

Except that then we learn in El Mundo (by subscription), that Kayson de Venezuela appears in the Sistema Nacional de Contrataciones as “empresa en proceso de descapitalización”, loosely translated as “Company in the process of losing its capital”, i.e. bankrupt.

kayson

and none other than the fascist persecutor of corruption, Diosdado Cabello, says that Kayson built 10,000 housing units and has been hired to build another 7,000, despite being “en proceso de descapitalizacion”.  Diosdado’s explanation agrees with the Iranian’s Ambassador explanation. Even more curious by now…

Which gets curioser (does this word exist? I just needed to use it) when you find from El Nuevo Herald, that the man who was not Minister, but was, who was not caught in Germany, but was, is also a member of the Board of Directors of Venezuela’s Banco Internacional de Desarrollo, an affiliate of the Export-Import Bank of Iran, sanctioned by US authorities in 2008 for providing Iran’s Minister of Defense for ways to bypass sanctions against that country.

So, what is going on here? Well, I don’t know, but I can guess. The biggest business in Venezuela today is arbitrage. Ecoanalitica reported on Monday, that fully 40% (Or US$ 8.7 billion) of last year´s public imports were fictitious, just fake, and that US$ 6.6 billion of private imports were also fake, for a total of US$ 15.6 billion or 28% of the total in fake imports.

What does fake means? It means over billing, it means empty boxes imported as if they were full, it means worthless stuff imported and left abandoned at the ports, it means many other things. (Diosdado: If you are so worried about corruption, you may want to look at this, this is REAL money we are talking about!)

But there are also lots of fake financial transactions that take advantage of the same arbitrage. From here on, I am just guessing: The contract to build the houses is an Iran-Venezuela Government-to-Government deal. The Iranian Minister of XXX comes to Venezuela and signs a deal to build YYY housing units for Bs. ZZZZ billion and appoints a company to execute the contract. Venezuela transfers the ZZZZ billion, in US$, at the official rate of exchange of Bs. 4.3 per US$, to whatever account in the world the Iranians want or need. A fraction, is exchanged at the black market rate and sold to someone in Venezuela to get Bs. for the execution of the project, with the remainder, which today is like 75% of the contract, being used by Iran for whatever purposes it needs “clean” money. Except that the guy who signs the Bolivar checks is a big shot in Teheran, who signs the check and sends it over with his high class messenger to give it to the company that supposedly will build the houses.

There are many variations and possibilities, but I bet my guess is not that far from the essentials of the arbitrage underlying this. Venezuela and Iran are involved in arbitrage and laundering via the excuse of building houses, which in the end is not even that relevant.

And therein lies the need to send a check via Germany, drawn in Bolivars via a local bank…

49 Responses to “The Mystery Check For Bs. 300 Million Found In The Hands Of A Former Iranian Minister Of Finance”

  1. m_astera Says:

    Curiouser-
    The standard form in English is “more curious”.

    As a general principle, the comparative -er suffix attaches to monosyllabic words, and more is preferred with polysyllabic words [e.g. greater, lesser, but not corrupter or famouser]

    Curiouser was coined by Lewis Carroll in Alice in Wonderland in 1865, as the phrase “curiouser and curiouser”.

  2. Humberto Says:

    Miguel, I think you nailed it. Thx.

  3. Bruni Says:

    My English is not good enough to get the meaning of “arbitrage” that you are giving in this post Miguel. Can you elaborate?

    • Romano Kratohvil Says:

      ar·bi·trage
      [ahr-bi-trahzh for 1, 3; ahr-bi-trij for 2] Show IPA noun, verb, ar·bi·traged, ar·bi·trag·ing.

      noun
      1.
      Finance. the simultaneous purchase and sale of the same securities, commodities, or foreign exchange in different markets to profit from unequal prices.

      2.
      Archaic. arbitration.

      verb (used without object)
      3.
      Finance. to engage in arbitrage.

      ——————————————————————————–

      Origin:
      1470–80; < Middle French, equivalent to arbitr ( er ) to arbitrate, regulate (< Latin arbitrārī; see arbitrate) + -age -age

      Dictionary.com Unabridged

    • moctavio Says:

      Remember Oligarco Burguesito? He was an expert at arbitrage. Arbitrage is when you take advantage of the price difference between two markets to make money. In this case, and Venezuela in general, the two markets are the one for the official rate of exchange at Bs. 4.3 and the black market, which now is more than four times bigger. If you can get dollars in the first one and sell them in the second one, you are making money by arbitraging the two, huge amounts of money. That is how people are becoming billionares in Venezuela.

    • m_astera Says:

      Arbitrage is playing with the spread between the stated value of a currency, bond, etc and what the market will pay for it.

      Buy US$ for 4.3 Bs, Sell US$ for 18 Bs. Pocket the difference.

  4. Bruni Says:

    Thank you all for the explanation. I was confused with French. In French “arbitrage” means going through a refereeing process.

    Miguel, Oligarco Burguesito was a great character! I wonder what has happened to him.

    • moctavio Says:

      Oligarco lives in Paris, near the Arc de Triumphe, in Ave. Marceau, he still deals with arbitrage, but has others do the dirty work for him in Venezuela. He looked at business opportunities in Russia and Argentina, but decided they were not worth his time. He is in the import/export business, but mostly imports stuff and exports money. He recently bought a Monet, some water lilies he liked, minor work, but he enjoys it, along with his wine collection. He is learning French.

      • Kepler Says:

        Do you think Boliburguesito really fancies wine? I suppose he does as if, the taste of old whisky will probably linger in his mouth for decades to come.

        I wonder what has happened to the Belorussian houses…according to what I read, they promissed about 5000 flats in 2007 and then a similar amount when bodyguard Maduro and his boss visited Lukashenko for the last time.
        Between the lines I thought I could read Hugo was pissed off because nothing was being bult (but that’s between the lines)

        I wonder if there are some Slavs going around with some Bolivarian check.
        They will probably use blond blue-eyed girls instead of bearded blokes.

      • Bruni Says:

        Why Paris if he does not even speaks French? Why not Spain, or England?…and I didn’t know that Oligarco had some artistic sensibilities and likes wine. I would have thought Oligarco as a Scotch fan.

  5. Morpheous Says:

    And this is just the tip of the iceberg. I’m not wanting to offend anyone but the true is that people that votes for Chavez are not only ignorant but also perfect idiots. To educate this people will take centuries through generations.

  6. CharlesC Says:

    Previosly I had noted that the houses I saw that were built were too close together and too small, and I read that in one case there were no water and sewer facilities. Also no parking places , no open areas for kids to play and people to relax, etc..poorly planning .
    Back to the topic of the check- could this be “advertising to the evil crime lords and countries- hey-look what we are doing for Iran-
    Venezuela is open for business – large quantities is ok. Bring it on!

    • CharlesC Says:

      I clicked too soon- I want to add. Not a word from US government.
      I guess the US government is in a state of transition…

    • m_astera Says:

      The US government just got a wake up call. They were hoping the Sandy Hook fling would give them a free ride to weapons confiscation. It turned out that the people bought ten million new weapons, because they don’t trust the government at all.

      • NorskeDiv Says:

        What? That is related how?

        Not trusting government is an American tradition, and no one is seriously considering weapons confiscation. Background checks is more like it.

      • m_astera Says:

        It could be related in that the Venezuelan people are not allowed to buy firearms or ammunition.

        • Kepler Says:

          Give me a break, Michael. Most people can buy weapons galore in the US.
          What some are discussing is to limit the purchase of big automatic weapons and making check ups more serious.

          And unlike what some US Americans think, I can buy here, in old Europe, many firearms, even if – I concede – I won’t be able to buy the latest UZI or Kalashnikov.

          And yet: I don’t feel like buying one. I know no one inclined to buying a weapon here. Most people don’t feel excited or more “manly”/womanly by carrying a weapon…and the murder rate is a fraction of what you have in the US and a fraction of a fraction of a fraction of what you have in Venezuela.

          • firepigette Says:

            Of course people should mistrust government – it is one of our finest qualities here in the US, but that does not mean that we should be able to buy assault rifles for God’s sake!

            Nevertheless our murder rates have been declining despite the guns!

            To avoid the crazies we need to lock them up like we used to before we gave the mentally ill rights to roam as pleased.

            When we emptied the mental hospitals and closed down State run Mental Hospitals we unleashed the power of the mentally unstable.

            These people need treatment not rifles!

            I am sick of the defenders of the undefendable.

            I

      • m_astera Says:

        Kepler-

        I don’t live in the US, nor in Europe. I live in Venezuela, where the people are not allowed to buy arms. Yet, how many hundred thousand Kalashnikovs or SKS’s were handed out to the barrios by the Chavez government, while denying arms to the middle class? The Marxist goal is always to destroy the middle class, is it not so?

        Perhaps you feel safe with the military and police being the only ones armed, because you unquestionably trust the good intentions of the government. Others might not, because historically, disarming populations has not gone all that well for those disarmed. Need examples?

  7. Arco Says:

    Cool you noticed my post!

  8. EDS Says:

    I agree with MOctavio… Forget about the houses, the food, and the imported stuff that comes to the country. These are the excuses, the fronts, and the façades!! These transactions help to clean millions of USD to buy people around the world and in Venezuela to do dodgy business around the world; Nigeria, Nicaragua, Caribbean countries, OEA perhaps? Don’t know (piensa mal y asertarás) Then, the media and people get distracted (redirected their attention to) to why the houses were not built, why the speculation with imported food, why the scarcity, etc. etc. The “dig deep” is not there; just bloggers like Miguel, Toro or Daniel get it straight. Not even local journalists like Bocaranda are looking at this…lack of knowledge? Fear? poor communication channels?

  9. Kepler Says:

    Miguel, any article you would recommend about money laundering and arbitrage beyond your blog? It’s for Wikipedia. You know newspapers and magazines there are more trusted than blogs…

    Also, for everyone:

    Feel free to improve this
    http://es.wikipedia.org/wiki/FONDEN
    I wrote that. I will try to expand it and translate it into German. Then I will start connecting from as many relevant articles to FONDEN and corruption in Venezuela.

  10. Ken Says:

    I want to throw something in here, it is a little off track but refers to some earlier comments. Regarding firearm possession in the US. The 2nd amendment of the constitution says:
    A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed. It is not a hunting rifle amendment, and quite clearly states that the Federal and state governments cannot infringe upon these rights. Relating this to Venezuela we are observing what happens to constituents when federal constitutions are disregarded. The Magna Carta and the rule of law is the only thing that protects us from despots. When there is a discarded constitution there is no democracy.

  11. Jeffry house Says:

    The Banco Internacional de Desarollo” where this guy is a director, is a wholly-owned subsidiary of Saderat, an Iranian Bank. According to Roger Noriega (who, admittedly, is sometimes over the top on this stuff), writing in 2010: “In 2006, the U.S. Treasury sanctioned Saderat for serving as a conduit for funds to the Lebanese Shiite terrorist group Hezbollah. Only two months ago [July 2010], the European Union froze BID’s assets for its role in supporting Iran’s “nuclear or ballistic missile activities.” Yet Chávez’s government continues to allow BID to move money through Iranian front companies and Venezuelan partners in order to evade international sanctions.”

  12. cecilio Says:

    para muestra un boton. God only knows how much money is being laundered in Venezuela. It pays to be “friends” with the Iranians, Lybians, Syrians, etc, etc. I bet it pays to be “friends” of Chavez, all the money these thugs will last for several generations and their sons, and their son’s sons and their son’s son’s sons will still enjoy all the millions that belong to the people.

  13. ode007 Says:

    Great piece of connect the dots. The more the dots are connected the more obvious the PsU becomes as an Int’nl ” washing machine” & “drug/arms/Depot” remember Noriega, he ended up well. The road blocks Russia/China agreements and the 34% oil supply. Must get that equation out of the way. They are working on this. Short term.. something happens from within and the country changes its path. Santos is not happy sitting at a table on an Island being asked to legalize cocaFarms, but conclusive proof of financial/logistic assistance must lead back to PsU. Lets hope the micro picture can change.

  14. César Says:

    What I can’t understand is why did the airport authorities find the check and how? I mean, a check is just a little piece of paper. How could they find it? I’ve never been searched so thoroughly at an airport as to check every single piece of paper I carry. Then again, I’m not a former Minister of Finance, but still, that shouldn’t be a reason to search extra carefully, unless, of course, they knew they would find something.

  15. m_astera Says:

    I decided to repost this at the end of the thread so it wouldn’t be missed.

    Kepler-

    I don’t live in the US, nor in Europe. I live in Venezuela, where the people are not allowed to buy arms [or ammunition]. Yet, how many hundred thousand Kalashnikovs or SKS’s were handed out to the barrios by the Chavez government, while denying arms to the middle class? The Marxist goal is always to destroy the middle class, is it not so?

    Perhaps you feel safe with the military and police being the only ones armed, because you unquestionably trust the good intentions of the government. Others might not, because historically, disarming populations has not gone all that well for those disarmed. Need examples?

    • m_astera Says:

      Edited to add: The rifles were probably given out to the barrios without ammo. :-)

    • Kepler Says:

      Astera,

      Weapons per se are not the issue in Venezuela. Lots of people had all kinds of weapons – also legally – and yet crime was going up. Everyone I knew with weapons in Venezuela got theirs stolen in all kinds of incidents or were never able to use them when things turned bad.

      You really don’t understand. I said we can buy weapons here. It’s rubbish we can’t. We just have stronger control and there are less people who feel the need to do that.
      And we have a much lower murder rate than anywhere else. Do you get that?

      And please, don’t come with that thing about the US constitution.
      First of all: constitutions should be respected but they can be changed and that stuff was about an amendment. Secondly, that amendment is talking about using arms for a MILITIA. If you knew history of your own country you would understand how armies at that moment were organised, so it was perfectly sensible to mention that as it was not the government who would keep the army but every Joe and John in his isolated cabin in the middle of nowhere had to be ready in case the Brits would attack again or something.
      That doesn’t have anything to do with today.
      And do you think you would really be able to do anything now if you had a bazooka in case The Federal government would take over your land?
      Oh, man! These blokes watch too many Hollywood films

      Examples? What examples? Are you going to tell me that that was the reason why Hitler came to power? Man, man, man…

      • m_astera Says:

        Kepler-

        One thing for sure, I know the history of the USA waaay better than you do. You are using laughable arguments about the 2nd Amendment to the Constitution. Which says “the right of the people to keep and bear arms shall not be infringed”. It had little or nothing to do with fighting off the British again. It had everything to do with combating tyranny from the government. Maybe you should read Tom Jefferson instead of getting your information from CNN.

        The US Constitution is a bastardized document anyway, put in place of the Articles of Confederation. Arggh, why bother? You are too ignorant.

        Hitler? I generally don’t go there, but your ignorance demands it. The gun restrictions in Germany were put in under the Wiemar “republic” a decade before Hitler. If you want a good “example”, see the Armenian genocide.

  16. Kepler Says:

    Firepigette, the US has the highest proportion of incarcerated people in the Western hemisphere and yet the murder rate is also the highest. So? You want to put more in prison?

    • Kepler Says:

      Apologies, that’s OT. Better follow discussion via email, although I don’t think there is any interest for that.

      In any case: the gun CHECK UPS have nothing to do with the Venezuelan situation on security.
      Venezuela’s problems are of a different kind and order in both security and economics

    • m_astera Says:

      At least 75% of the murders in the USA are gang, drug, and ghetto related. There is not a high murder rate in the civilized parts. Matter of fact, I never knew anyone who was murdered, or knew anyone who knew anyone who was murdered, though I grew up mostly in the USA.

      The high rate of incarceration is due to the legal system having been suborned to a profit motive. Judges and prosecutors are elected, and they get re-elected based on how many people they put in prison. You truly have no clue.

      • Kepler Says:

        Most murders everywhere, Michael, are related to “gang, drug and ghetto” (but for Afghanistan and such places in war, of course)

        Your personal experience has little meaning here. There is something called murder rate.

        You need to read what I read. I said leave aside the gun stuff, having guns won’t make people safer…we had plenty of legal guns a few years ago and the murder rate was going through the roof already.

        If you want more guns, why not go back to the USA or perhaps Afghanistan or Congo?

      • m_astera Says:

        Kepler

        Have you ever fired a gun?

    • BoludoTejano Says:

      ….the US has the highest proportion of incarcerated people in the Western hemisphere and yet the murder rate is also the highest.

      Before one discusses murder rates, it would be a good idea to have an idea of what the facts are on murder rates. One place to start would be Wikipedia I observe that the murder rate in the US is far from being “the highest” in the Western hemisphere: 4.8 in the US compared to 91.6 in Honduras, for example. In fact, the US has one of the lowest murder rates in the Western Hemisphere. Internationally, the US ranks about 100th in murder rate.

      I am not interested in a discussion on guns/incarceration rates etc. I simply wanted to point out some facts.

      • Kepler Says:

        Boludo, I chose the wrong word. I meant among “the West”, as Western, industrialized nations.
        Obviously, not only Honduras has a higher murder rate (and it is on the Western hemisphere), but most other countries in America with some exceptions (Canada, Chile, Uruguay).

        The US has clearly a higher murder rate than Western Europe, Australia, New Zealand and Canada.

  17. m_astera Says:

    Kepler

    My personal experience has everything to do with this. I grew up in homes where there were guns. My friends and I when we were in our early teens frequently walked along the roads with loaded rifles. No one paid us any attention. They assumed rightly that we had been trained in firearms safety. Firearms safety training in the US consisted of this:

    Put your rifle or gun down before you cross a fence. Pick it up from the other side, once you are over.

    Assume a weapon is loaded, even if you think it is not. Don’t pull the trigger on an “unloaded” weapon unless you have made sure the chamber is empty and there are no bullets ready to load.

    Last, and most importantly, never point a gun at anything you don’t intend to kill. That means a person, animal, or even a plant.

    No one I knew ever pointed a gun at another person.

    I don’t like the idea of the government being the only ones allowed to have armaments, for offense or defense.

    You know about the genocide of the Armenians, or not?

    • Kepler Says:

      As I said: if you want to discuss, send me an email…or you just want to occupy more space in this thread? As I said: the point is not about prohibition but about check ups and it is not even the point in Venezuela.
      By the way: I suppose you speak Spanish, so we can better carry on the conversation via email IN SPANISH, which is the language you need to use in Venezuela to understand Venezuela.

    • m_astera Says:

      We have been through this gun debate before, Kepler, on private email. If Miguel objects he can delete the conversation.

      As for carrying it on in Spanish, no I don’t think so. This is an English language blog and I’m not going to give you that advantage. I will say that I live in Venezuela, and have for some time, and get along fine. Most of my friends here are Venezuelans. You live in Europe.

      You argument seems to be that the government should be the only ones armed, and we should trust their good intentions. The government is armed, have you noticed? They should be trusted? The people should not be trusted to have arms?

      Waiting for your comment on the Armenian genocide.

      • Kepler Says:

        I will answer to you via email, in Spanish, as you speak Spanish. You can write in English but I suppose your Spanish is good enough to understand what I say.

        Not in this blog as it is already OT.
        Or is your purpose to be read here? What for? In any case, on Armenian and whatever: write an email or else, forget it.

  18. lph banavih Says:

    Me ha agradado bastante esta pagina que titulas The Mystery Check
    For Bs. 300 Million Found In The Hands Of A Former Iranian Minister Of Finance
    | The Devil’s Excrement .


  19. Way cool! Some very valid points! I appreciate you writing this write-up and the rest of the site is really
    good.


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