Expensive Art at Stake as Venezuelan Banker Faces U.S. Bribery Charges

Опубликовано: 07 Март 2024

Herrera-VelutiniVenezuelan banker Julio Herrera Velutini has been charged with bribery in Puerto Rico. (Photo: Kumbalanga, Wikimedia, License)

He’s already facing charges for allegedly bribing a former Puerto Rican governor, and his bank is in liquidation following money laundering fines. Now, Julio Herrera Velutini has another legal concern: the state of his confiscated US$23-million art collection.

Administrators in charge of liquidating his bank’s assets have “stashed” the collection “under conditions that seem inadequate for its proper preservation,” according to a lawsuit recently filed by Herrera Velutini.

Herrera Velutini made the claims against Driven Administrative Services LLC, which has been appointed to administer Bancrédito International Bank and Trust Corporation. Herrera Velutini is the sole shareholder of Bancrédito Holding, the company that owns the Puerto Rico-based bank.

In his lawsuit, which was first reported by Bloomberg Law, Herrera Velutini notes that many pieces in the collection require a “meticulously controlled environment with precise temperature and humidity levels.”

“High humidity can also damage the Artwork by causing mold and mildew to accumulate,” Herrera Velutini warns in legal papers acquired by OCCRP.

The documents note that the collection was valued in 2019 at $22.5 million, but they say it is likely worth more now, especially since “the passing of a famous artist whose work constitutes a substantial portion of the collection.”

The papers do not name the artist, but the collection includes works by Fernando Botero, the Colombian master painter and sculptor who died in September.

In his lawsuit, Herrera Velutini also objects that Driven Administrative Services “appears to be shopping around” the collection, looking for buyers, even though it is not necessary to sell off the art in order to pay creditors.

Driven Administrative Services did not reply to a request for comment.

Puerto Rico’s banking authority ordered Bancrédito into liquidation in January 2023, after fining the institution at least $97,000 for failing to enforce anti-money laundering rules, according to court filings. In September last year, the U.S. regulator, the Financial Crimes Enforcement Network (FinCEN), fined the bank $15 million.

The U.S. regulator found Bancrédito failed to properly report hundreds of millions of dollars in suspicious transactions tied to crimes including a Venezuelan Ponzi scheme, a crypto-currency scam, and drug-trafficking.

In its ruling, which is known as a consent order, FinCEN accused “Executive A” of using the bank to process “suspicious transactions.” The consent order did not name Herrera Velutini, but it included enough detail for Puerto Rico’s El Nuevo Dia newspaper to identify him as Executive A.

A lawyer for Herrera Velutini’s Bancrédito Holding told OCCRP that “all of the examples of purportedly suspicious transactions cited in the Consent Order had a legitimate business purpose.”

Aside from his financial woes, Herrera Velutini is at the center of an alleged bribery scandal that has rippled across the Atlantic Ocean, from Puerto Rico to the U.K.

British opposition politicians have called on the Conservative Party to return £500,000 donated by Herrera Velutini, a dual Venezuelan and Italian citizen who lives in London. The Conservative Party said in an emailed statement that the donations “comply fully with the law.”

The controversy in the U.K. came after U.S. prosecutors arrested Herrera Velutini in August 2022 for allegedly bribing a former governor of Puerto Rico.

Herrera Velutini was charged with “conspiracy, federal programs bribery, and honest services wire fraud.” The allegations have not been proven in court, and Herrera Velutini has said he is not guilty.

In 2020, American prosecutors say, Herrera Velutini paid more than $300,000 for political consultants to work on the unsuccessful gubernatorial re-election campaign of Wanda Vazquez Garced. A lawyer for Vazquez Garced told the Financial Times she was “totally innocent.”

The U.S. Department of Justice said Herrera Velutini made the payments to VazquezGarced in return for her promise to sack the head of Puerto Rico’s financial regulator. VazquezGarced allegedly agreed to replace that official with a person chosen by Herrera Velutini.

The Office of the Commissioner of Financial Institutions, Puerto Rico’s regulator, had been investigating Herrera Velutini’s Bancrédito International Bank.