US Charges 7 Suspects For Smuggling Oil, Military Equips Using Crypto
Oil was sold through a Russian-Venezuelan network to customers in China and Russia while using cryptocurrency to get around banking constraints.
On October 19, the US Department of Justice (DOJ) charged two Venezuelan individuals and five Russian nationals with using cryptocurrency to sell oil barrels from Petroleos de Venezuela, a company under sanctions, to launder money for Russian billionaires (PDVSA).
The news statement claims that the defendants used various proxies and money-laundering strategies, including cryptocurrency transactions, to launder “tens of millions of dollars” while smuggling millions of barrels of oil into Russia and China.
Yury Orekhov, Artem Uss (son of the Krasnoyarsk Krai governor), Svetlana Kuzurgasheva, Timofey Telegin, and Sergey Tulyakov are some of the Russian accused. The Venezuelans Juan Fernando Serrano Ponce, popularly known as “Juanfe Serrano,” and Juan Carlos Soto, who served as middlemen with the Venezuelan state-owned corporation “Petroleos de Venezuela S.A,” were also prosecuted by US officials (PDVSA).
“Serrano Ponce and Soto brokered deals worth millions of dollars between PDVSA and NDA GmbH, which were routed through a complex group of shell companies and bank accounts to disguise the transactions.”
What Mechanisms Did The Criminal Network Use?
Orekhov was named by the DOJ as a co-owner, managing director, and CEO of Nord-Deutsche Industrieanlagenbau GmbH (NDA GmbH), a private corporation situated in Germany that dealt in commodities and industrial equipment.
NDA GmbH was used as a cover for buying American military technology that was then transferred to other firms in Russia that provided defence services. This technology was employed in combat aircraft, missile systems, radars, and satellites, among other military applications.
The leaked evidence states that Orekhov freely acknowledged to Ponce during their talk that he was working for a sanctioned Russian billionaire and used his firm, NDA GmbH, “as a front,” bragging that they would never be found out because to the intermediates they employed.
“There were no worries…this is the shittiest bank in the Emirates…they pay for everything.”
The criminal network also used couriers from Russia and Latin America to deliver substantial sums of money, which were afterwards converted into cryptocurrency to launder their gains.
U.S. Officials Expect to Extradite Suspects:
The defendants, according to Breon Peace, U.S. Attorney for the Eastern District of New York, staged “a complicated conspiracy to illegally acquire U.S. military technology and Venezuelan sanctioned oil” using front businesses and cryptocurrency.
For his part, Michael J. Driscoll, Assistant Director in charge of the New York Field Office of the Federal Bureau of Investigation (FBI), praised the efforts made by the law enforcement officers to dismantle a “sophisticated network” that at least five Russian and two Venezuelan citizens had put together.
In order to facilitate extradition procedures at the request of the United States, Orekhov and Uss are being detained in Germany and Italy, respectively. The defendants may spend up to 30 years in jail in the United States if found guilty.
