NEW YORK, Nov 21 (Reuters) – A cooperating witness in a criminal trial starting next week is expected to testify that a former chief executive of US oil refiner Citgo Petroleum helped a suspected Venezuelan drug trafficker launder money in the mid-2000s, court papers Show.
Prosecutors in the trial of Carlos Orense, who accuse of shipping tens of thousands of kilograms of cocaine to the United States, did not name Citgo in Nov. 4 court papers, describing it only as a wholly-owned US subsidiary of a Venezuelan state -owned company with which Orense had oil drilling contracts.
A lawyer for Hugo Carvajal, a former Venezuelan military intelligence director who is facing separate drug trafficking charges, was quoted by the Miami Herald on Tuesday as saying that the US company is Citgo (PDVSAC.UL) and the CEO was Luis Marin. The lawyer did not respond to requests for comment.
Marin was CEO of Citgo from 2003 through 2005.
During jury selection on Monday for Orense’s trial in New York, US District Judge Vernon Broderick named Marin as one of several people expected to be mentioned at the trial, which could last up to two weeks.
Marin told Reuters he was not aware of the case, and declined further comment.
A Citgo spokesperson declined to comment.
The trial is expected to include testimony that a former Citgo CEO arranged for the company to sign a fictitious contract with a shell firm that took deposits from Orense’s US drug sales and transferred the money to overseas bank accounts, federal prosecutors said in the court papers.
Citgo faces a court-organized auction next year that could break up the company. The forced auction of shares in one of Citgo’s parent companies would raise proceeds to pay Venezuelan-linked creditors owed billions of dollars.
Employees of Citgo – which is owned by state-run oil company Petroleos de Venezuela (PDVSA.UL) – have been accused of wrongdoing in other cases. A former procurement officer pleaded guilty in 2021 to taking bribes. But no Citgo executive has previously been accused of complicity with the drug trade.
VENEZUELAN OFFICIALS ACCUSED OF TAKING BRIBES
Orense is accused of bribing Venezuelan military leaders to ensure safe passage for his drugs. He has pleaded not guilty to three counts of narcotics importation conspiracy and criminal weapons possession.
Venezuela’s information ministry did not respond to a request for comment.
The prosecutors did not name the witness who will testify about the CEO, but in the Nov. 4 filing, they described him as a former member of Orense’s security detail from 2003-2010. A Drug Enforcement Administration agent wrote in a 2021 complaint against Orense that the witness was convicted on US fraud charges in 2015 and is being paid to cooperate with authorities.
In the filing, prosecutors said the cooperating witness is expected to testify that Orense and a former Venezuelan military intelligence chief arranged for an associate of Orense’s to become the US company’s CEO.
Prosecutors wrote that the CEO then arranged for his company to sign the contract with the shell company, which could then evade scrutiny for transferring large sums of money overseas because the funds appeared to be legitimate.
Orense’s lawyers said in court papers that the activity prosecutors described as money laundering as “legitimate business dealings.”
The Miami Herald cited Zachary Margulis-Ohnuma, Carvajal’s lawyer, as saying it was obvious the military intelligence chief that prosecutors were referring to was his client. The paper also cited Margulis-Ohnuma as saying prosecutors were referring to Citgo and Marin.
Margulis-Ohnuma denied the allegation against Carvajal.
“The government is wrong: General Carvajal had nothing to do with corporate decisions at Citgo and never met Luis Marin until years later,” Margulis-Ohnuma said.
Carvajal was extradited from Spain to New York earlier this year. He has pleaded not guilty.
US accusations of official Venezuelan complicity in the drugs trade have long been a source of tension in the frosty relationship between Washington and the socialist-run OPEC member. President Nicolas Maduro himself was indicted in 2020 on US “narcoterrorism” charges, which he called false and racist.
Reporting by Luc Cohen in New York; Additional reporting by Marianna Parraga in Houston and Vivian Sequera in Caracas; Editing by Noeleen Walder and Grant McCool
Our Standards: The Thomson Reuters Trust Principles.
Reports on the New York federal courts. He previously worked as a correspondent in Venezuela and Argentina.