What do Derwick Associates and Ricardo Fernandez Barrueco have in common? Al Cardenas and FTI Consulting

London | According to reports from The
Miami Herald, on Friday, October 17 2008, at 10 a.m., 15 shots
were fired at a woman while driving in Carrasquilla, Panama City.
Eight shots hit the woman, one bullet entering her temple and exiting
through her eyelid, causing permanent left-eye blindness. The woman,
miraculously, survived.

This wasn’t
just another example of Latin America’s regular crimes, where robbery
is the common goal, but a planned, targeted, assassination attempt.
The woman was the wife of Luis Castro, a former security consultant
of Ricardo Fernandez Barrueco, the disgraced Boligarch charged with
multiple financial crimes by Hugo Chavez’s regime in Venezuela.

The Herald
claims that Castro requested a formal investigation into Fernandez
Barrueco, his brothers Felipe and Gustavo, as well as other staff and
managers of Fernandez Barrueco’s companies, due to the assassination
attempt on his wife. While Castro’s accusations did not include
evidence about Fernandez Barrueco’s direct involvement, it did
provide a window into the world of this parvenu billionaire, and of
his close connections to the Venezuelan and Cuban regimes. As it
turned, Fernandez Barrueco had been the only Boligarch in Venezuela
to whom Chavez would personally answer calls. The trust that the
caudillo had on him was such, that he was asked to devise an
“economic recovery” plan to kickstart Cuba’s economy, according
to reports from The
Herald. That request would allow him to be in the best of terms
with the Castro brothers, and high officials of Cuba’s dictatorship.

reports commissioned to the ever so chavista-friendly FTI Consulting
at the time, that sought to white
wash Fernandez Barrueco’s image and present him as some sort of
legitimate serial entrepreneur, the truth is rather less
Hollywood-esque: son of a Spanish immigrant, who had the concession
to operate the parking lot of the former Hilton Hotel in Caracas,
Fernandez Barrueco was an absolute nobody in Venezuela’s business
world. In fact, he was an employee of his father, and used to park
cars for a living. In doing so, he got to meet all kinds of people,
among whom Adan Chavez, Hugo’s older brother and mentor. That,
and that only, was the reason why he started getting government
contracts, small at first, more substantial later. He started off
in food-related businesses, then in distribution, through a loan he
allegedly got from Sarkis
Arslanian. By 2002’s general strike, Fernandez Barrueco had a
fleet of trucks and some agribusinesses. He put that to good use by
siding with Chavez, and using his distribution network and
food-producing companies to bypass the general lockout. That brought
tremendous dividends. Fernandez Barrueco became Chavez’s partner of
choice in all imports and sales to MERCAL, Venezuela’s multibillion
populist program of subsidised food. So successful was his bet, that
a 2005 audit, produced by KPGM’s Venezuelan representative, concluded
that the
man was worth $1.6 billion, and had 41 companies in the services,
fishing, distribution, agricultural, food, and forestry sectors. From
parking cars before 1998, to 41 companies and a personal fortune of
$1.6 billion in 2005. Not bad, even Russian oligarchs would be

The 2002 bet
was mutual though: Chavez started using Fernandez Barrueco, and his
dubiously acquired businesses, as proxies to break Empresas Polar,
largest private corporation. By channelling all of MERCAL’s
procurement to Fernandez Barrueco’s companies Chavez thought it would
only take some time to get the best of an empire that, for more than
50 years, has been producing and selling leading food and drinks
brands in Venezuela.

Fernandez Barrueco, as all thugs of his ilk, got greedy, and decided
to diversify into banking. That was to be his undoing. He purchased
four banks: Bolívar Banco, Banco Confederado, Banco Provivienda and
Banco Canarias. Then, he used his contacts to get Venezuelan public
institutions to move some of the State’s money into accounts in these
banks. It was reported that, at one point, Fernandez Barrueco’s banks
held 18% of all Venezuelan
State money deposited in private banks. With those deposits,
Fernandez Barrueco devised a way to fund his operations, which worked
like this:

deposits in balance sheets, so that his banks would look financially
very healthy;

deposits’ funds to back up purchase of bonds by companies under his
control, through his own brokerage firms (U21 & Interbursa);

use bonds as collateral for further loans to his companies without
required guarantees from his banks; or sell bonds to third parties
and syphon the money out of the country;

None of
these operations were shown in balance sheets, so to make it look as
if billions belonging to the State and other clients had never been

Barrueco’s financial creativity -otherwise known as theft,
misappropriation, etc.- departed from other methods used by
bankers aligned with the regime. In the latter’s case, through
well placed government contacts, “bankers” would use legitimate
funds to purchase bonds in Bolivares (bonds’ value would be
denominated at the official exchange rate), flip them internationally
in USD, sell USD in the local black market, and pocket the huge
differential after giving a portion of ill gotten proceeds to
chavista contacts (after all, someone somewhere must decide
allocation of bonds). The latest thing, according to a local source,
is to purchase bonds, sell and transfer locally (all in Bolivares
thus avoiding regulators’ attention), and get paid abroad in USD.

For his
involvement in the method described Fernandez Barrueco was charged,
arrested, and remains in jail since November 2009. The
actual charges are: misappropriation of savers’ funds,
misappropriation of credits, and criminal association. At the time of
his arrest, Fernandez Barrueco’s empire had grown to a multinational
conglomerate of more
than 250 companies in Venezuela, Panama, Curazao, Spain, Ecuador,
Guatemala, U.S.A, UK, even Hong
Kong. His staff would, for instance, issue instructions so that
millions of dollars would be transferred from U21 brokerage firm in
Caracas to HSBC’s
Bristol Branch in the UK, to credit the account of The
Winterbotham Trust (Alrena Moxey as front) to further credit Antora
Finance’s account. In other court documents, it can be read that
Fernandez Barrueco’s Galopy
Corporation International N.V., sole shareholder
of previously mentioned banks, had requested to transfer $60
million worth of bonds from Banco Occidental de Descuento (owned
by Victor Vargas, another Bolivarian “banker”) to a custody
account (no. 026513265700) in Deutsche Bank Trust Co..

F and Broker
F were used as guarantors to multimillion loans given to another
myriad of Fernandez Barrueco’s Venezuela-based companies. Other
named in connection were: Galino,
Holding, and Comercial
Atunera. These companies received $200 million worth of illegal
transfers and deposits, in September, October and November of 2009
only. While Fernandez Barrueco was sent to jail in Caracas, his
brothers were in control of 29
companies in Panama alone.

Consulting, a firm that provides “critical
thinking at critical times” didn’t find any of it of course. That’s how
trustworthy and thorough their work is.

It takes a
great deal of sophistication to mount an operation like the one
Fernandez Barrueco had, for it is impossible for millions of dollars
to be transferred to and fro different jurisdictions -some with
foreign exchange controls- without active collaboration of banks and
authorities willing to turn a blind eye on it. In the case of
Fernandez Barrueco, little can be expected from Venezuelan
authorities and bankers, but how about HSBC, Deutsche Bank,
Metrobank, authorities in the UK, Panama, the U.S., and Spain to name
but a few?

And here is
where further questions about Al Cardenas’s integrity should be made.
Tew Cardenas, his law firm, represented Fernandez Barrueco in
relation to a jet
that was seized by the DEA in Miami in 2007. It was believed that
Fernandez Barrueco was also involved in drug trafficking, although
this charge was never proven in court. He was, however, found to be
guilty of registering a plane under false credentials, reason for
which he agreed to pay more than $1 million. His partner, Arslanian,
denied entry to the U.S. In 2006. As noted above, in 2008 the
wife of Fernandez Barrueco’s security chief was shot at 15 times in
Panama. Then in 2009 the Chavez regime arrested the poster boy of the
Boligarchs. So how come, having seen all of this unfolding in public,
Al Cardenas is now working for Derwick Associates, another group of
Bolivarian “businessmen”? How can Al Cardenas, and FTI
Consulting, defend whatever integrity and credibility they think to
have, in view of their rather indefensible choice of clients?

Not long
ago, I
published about the baffling disconnect between someone who purports
to be an enemy of the Cuban tyrants, someone who has protested
the creeping authoritarianism in Venezuela, someone held in high
esteem in conservative Republican circles, defending the very worse
of criminals from Venezuela, like Fernandez Barrueco, and now
defending people of very dubious and suspect credentials, as Derwick
Associates. There seems to be quite an established network of
support services for Boligarchs in Miami: both Fernandez Barrueco
and Derwick Associates retained Tew Cardenas and FTI Consulting.
In the latter’s case, the company is believed to have also been
involved with Moris Beracha, David Osio, Wilmer Ruperti… a true
who’s who of the lowest class of thugs to have come out of Venezuela
in many years.

One can only
hope that responsible authorities will sometime start asking questions to companies / individuals involved, follow
procedures, and applying current legislations, so that these «businessmen» room of manoeuvre is restricted to the confines of shit holes like Venezuela.

Tomado de What do Derwick Associates and Ricardo Fernandez Barrueco have in common? Al Cardenas and FTI Consulting