MFSA carried out site visit at Portmann in 2016, fine not yet publicised

The Maltese financial regulator carried out a site visit at Portmann Capital Management in 2016, the firm disclosed in its accounting statements.

The Maltese firm has been implicated in a US investigation on money laundering that reaches up to the highest echelons of Venezuela’s presidency.

The wealth management firm’s last known bankers are the Austrian financial institution Sparkasse, although the firm’s company-in-formation account in 2011 was opened at HSBC Malta, with the services of Ganado & Associates. But the firm’s bankers between 2011 and 2014, and at least up to 26 June 2015, were Bank of Valletta.

While the Malta Financial Services Authority was reported to have fined the company €62,000 earlier this year, the administrative penalty was not publicised on the regulator’s website as required at law.

According to the last submitted audited accounts, the MFSA carried out a compliance visit in 2016, and instructed Portmann to cease providing payment services on behalf of its clients – the activities were deemed by the MFSA as falling outside the company’s investment services licence.

Portmann later said it was applying for a payment institutions licence.

“This decision was based on extensive volumes of payment transactions executed by the company, for its clients, without any licence to offer this service,” a source who spoke to the Times of Malta said. 

The source added that the irregularities occurred over a lengthy period between 2012 and the summer of 2016, covering more than 700 transactions. “The situation was that we were on to them. But you also have to keep in mind, that these money laundering structures are very complex. We are talking about chasing shadows here,” the source said.   

The Times also reported that the FIAU was planning to fine the company €350,000 – although the fine has not yet been publicised on the FIAU website.

Portmann has been implicated in an American investigation through Venezuelan officials, including President Nicolas Maduro, are suspected of having laundered US$1.2 billion in funds pilfered from Venezuela’s state oil company, the PDVSA.

Although unnamed in the complaint, MaltaToday spoke to highly-placed sources familiar with the investigation, a US Homeland Security Investigations criminal complaint filed in the courts of Miami.

A director for the company has told MaltaToday that Portmann was not aware that it is the company identified in the Florida court complaint.

Portmann Capital Management was set up in 2011 as a subsidiary of XPCT Limited, whose two shareholders are Swiss nationals Kurt Portmann, a Dubai resident, and Yves-Alain Portmann.

Kurt Portmann is the founder of private equity firm Portmann Finances SA of Switzerland, and has served as a director on various energy and oil and gas firms. He is the founder-chairman of London brokers Optiva Securities. Neither Kurt or Yves-Alain Portmann are mentioned by name in the Miami court complaint.

According to the Homeland Security Investigations criminal complaint – which the Miami Herald said concerns Venezuelan president Nicolás Maduro – his stepsons helped launder US$1.2 billion in funds pilfered from Petroleos de Venezuela, of which point a hefty portion was wired to the Maltese intermediary between late 2014 and early 2015.

Using a series of fraudulent bond issues and investment funds, around €511 million in 10 wire transfers was laundered through Malta, according to the criminal complaint.

The eight defendants named in the complaint are accused of embezzling funds from Venezuela’s enormous oil income and exploiting its foreign-currency exchange system to amass illicit fortunes in Europe and the United States.

To leverage their profits, the defendants took advantage of their special access to the Venezuelan government’s foreign-currency exchange system, which offers a far superior rate of exchange than the normal market. That access was allegedly used to convert bolivars into dollars and euros as the defendants plundered the country’s oil riches.

While the Maltese private investment firm that allegedly laundered the ill-gotten proceeds was unnamed, the criminal complaint says it received upwards of €20 million for laundering the money at a 4% service charge.

The complaint named Venezuelan national Jose Vincente Amparan Croquer, aka ‘Chente’, as a “professional money launderer” who is associated with a Spanish company that serves as a money laundering front operating as a real estate investment firm”.

According to the criminal complaint, “Amparan also maintains relationships with ‘European Financial Institution 1’ in Malta, a private investment firm, which he uses to launder money.”

US investigators used email search warrants to confirm the flow of the funds “from PDVSA to the defendants and other conspirators through European Financial Institution 1” (the Maltese institution).

One email cited in the criminal complaint includes an attachment titled ‘Operation 600k’, which contained worksheets detailing the illicit cash flows from Venezuela to Malta.

A work sheet titled ‘Detailed Income from PDVSA’ shows 10 transfers from PDVSA from 29 December 2014 through 3 February 2015 totalling €511,913,270.74.

Another worksheet called ‘Summary of the 600 Operation’ shows that of this money, €20.4 million was assigned to the Maltese ‘European Financial Institution 1’ as a 4% fee; €227 million went to Venezuelan conspirator Francisco Convit Guruceaga, €159 million to Maduro’s stepsons, and €68 million to conspirator Raúl Gorrín, owner of the Globovision television network in Venezuela.

The remaining €36.9 million was accounted for as the ‘cost’ of the initial 7.2 billion Bolivars used to obtain the €511 million.

This last transaction was done through a Hong Kong shell company named Eaton Global, which ended up with the right to pay PDVSA about 7.2 billion Bolivars (€35 million) and receive about €510 million – of which about €78.8 million was sent to the Homeland Security’s investigators’ confidential source.

Raúl Gorrín is also said to have sent dozens of US dollar wires through banks in Malta and Austria, including to aviation and yacht services as well as brokerage companies in Miami, Florida.

According to US wire taps, the organiser of the scheme is Mathias Krull – a 44-year-old German national and Panama resident – who was said to have devised a way of putting US$200 million held in a Maltese financial institution in the name of a straw owner.

The emails show Krull talking about the money’s movements to and from Malta.

In the court documents it is reported that the confidential source asked, “Are these the guy’s sons?” – a reference to Maduro’s stepsons – to Krull responded, “Nah. Don’t, don’t, don’t ask.”

Krull, who was arrested at Miami International Airport in July, is seen in the emails acknowledging receiving money from the Maltese institution and assuring the confidential source not to worry about the Maltese institution.

The alleged money-laundering conspiracy began in December 2014 with the currency-exchange scheme to embezzle the PVDSA revenues. But the defendants’ associate later become a confidential source for the US investigators, who approached Homeland Security investigators in Miami about cooperating in 2016.