Chavez wants US to ID money laundering suspects as Venezuela investigates brokerages firms

Chavez wants US to ID money laundering suspects

CARACAS, Venezuela — Venezuela will ask U.S. authorities to hand over information about brokers suspected of laundering money through the South American nation’s parallel currency market, President Hugo Chavez said Wednesday.

Chavez referred to a case in which 16 people were indicted in the United States on charges of laundering at least $7 million in drug trafficking profits through exchanges of Venezuelan currency for U.S. dollars.

Chavez said he believes some of the suspects are Venezuelans, and he suggested some could be linked to the dozens of brokerage firms in Venezuela that have been accused of violating currency trading regulations.

“Have them give us their names,” Chavez instructed his foreign minister during a televised speech. “There are no untouchables here.”

On Tuesday, Venezuelan regulators took over management at 31 of the country’s 107 brokerage companies while investigating what officials say may be illegal currency-trading practices as well as money laundering and management problems.

The president of the securities commission, Tomas Sanchez, said in remarks published Wednesday by the newspaper El Universal that officials believe there has been significant money laundering and “speculative operations” through bond trading. Aides to Sanchez confirmed the statements.

Authorities temporarily halted trading of government bonds Tuesday and said they would seek to control currency exchange rates by setting a range of permitted prices in the bond market.

Chavez is seeking to crack down on currency trading that he blames for soaring inflation and the decline in the value of Venezuela’s currency, the bolivar, on the previously unregulated bond market.

Venezuela maintains strict currency controls and sets official exchange rates, but another route for trading currency has been the bond market, where the bolivar has recently fetched about half the official rate of 4.30 to the dollar for nonessential goods.

In the past two weeks, authorities have intervened in and raided 13 other brokerages on suspicion of irregularities involving currency trading. Executives at the affected companies have not responded publicly to the measures.

During an evening speech, Chavez singled out one of the brokerages that have been seized — Positiva Sociedad de Corretaje — as an example of what the government alleges are shady business practices of some firms.

Chavez said the brokerage “made multimillion-dollar buying and selling operations of bonds since Jan. 1, 2010, without any legal or financial backing of the money, and without state control.”

The firm’s manager, Pedro Ramin, has been arrested, Chavez said.

Analysts say the government’s decision to bar brokerage firms from the formerly lucrative bond market will dramatically reduce their business and could lead many to go out of business.

A coalition of opposition parties fiercely criticized Chavez’s crackdown on brokerages, the government’s decision to halt bond trading and its plans to tighten the Central Bank’s control over the parallel market.

In a statement, the coalition expressed “concern regarding the paralysis of the exchange rules,” saying Chavez’s administration closed the market because “it doesn’t have a clear strategy to reduce the panic that it has caused.”

The opposition parties forecast food shortages in the future, noting that more than a third of Venezuela’s import businesses used the parallel market to obtain hard currency needed to purchase goods from foreign suppliers.

“How can a market that provides 40 percent of the imports that Venezuelans consume be closed for two weeks? The government is now caught up within its own errors,” the statement said.

Associated Press Writer Christopher Toothaker contributed to this report.