Former U.S. Money-Laundering Probe Target Emerges as Key Partner in Venezuela Oil Deal

Venezuelan businessman Alejandro Betancourt, who was previously investigated by U.S. authorities in connection with an alleged money-laundering scheme involving funds from state oil company PDVSA, has emerged as a central private-sector partner in a major U.S.-Venezuela oil arrangement, Reuters reported on September 5.

Betancourt has not been charged in the United States and has denied wrongdoing. Reuters reported that U.S. federal prosecutors in Florida paused their investigation earlier this year. A separate Swiss criminal proceeding remains active, according to the Zurich Public Prosecutor’s Office.

New role in U.S.-Venezuela oil arrangement

Under the oil arrangement announced in late August, the Pentagon’s Office of Strategic Capital holds a 35% economic interest in North American Blue Energy Partners (NABEP), a company controlled by Betancourt. NABEP has been granted 100-year rights to 17 Venezuelan oilfields estimated to contain about 65 billion barrels of reserves.

A U.S. official separately told Reuters that the government’s 35% position was structured through “penny warrants” designed to protect the stake from dilution as the venture raises capital. The State Department also has rights to acquire 20% of NABEP’s oil output at cost and preferential access to the remaining production.

Reuters reported that Betancourt also played an intermediary role in recent U.S.-Venezuela oil negotiations. According to vessel-monitoring data and people familiar with the discussions cited by Reuters, an oil trading arrangement he helped broker in January has resulted in more than 135 million barrels of crude and fuel being exported to the United States, Europe, India and the Caribbean through the end of August.

Earlier money-laundering investigations

Reuters said Betancourt had been investigated in the United States, Spain and Switzerland but had never been indicted. The paused U.S. investigation concerned an alleged scheme involving more than $1 billion misappropriated from PDVSA and allegedly laundered through Miami real estate and bank accounts in Malta and Switzerland.

Switzerland withdrew a request to extradite Betancourt from the United Kingdom in May. The Zurich Public Prosecutor’s Office told Reuters that the withdrawal concerned only the UK extradition process and that the Swiss criminal proceedings remain ongoing.

NABEP’s lawyer said allegations involving Betancourt had been examined in multiple jurisdictions without charges being brought against him. A U.S. official told Reuters that Betancourt currently has no legal problems in the United States and described NABEP as a suitable partner because of its operating record in Venezuela.

The development illustrates the importance of distinguishing historical investigations, ongoing proceedings and actual criminal charges when assessing financial-crime risk around politically exposed or strategically important commercial relationships.