GOV SEIZES USD 2.5 MILLION BELONGING TO LARGEST

C O N F I D E N T I A L SECTION 01 OF 02 CARACAS 000100

SIPDIS


STATE FOR WHA/AND, EB
NSC FOR SHANNON
TREASURY FOR OASIA - GIANLUCA SIGNORELLI
USCINCSO FOR POLAD

E.O. 12958: DECL: 01/08/2014
TAGS: ECON EFIN PGOV VE
SUBJECT: GOV SEIZES USD 2.5 MILLION BELONGING TO LARGEST
FOREIGN EXCHANGE FIRM


CLASSIFIED BY: AMBASSADOR CHARLES S. SHAPIRO FOR REASONS 1.4(B) AND (D)

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SUMMARY
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1. (C) VENEZUELAN CUSTOMS AUTHORITIES SEIZED A SHIPMENT OF
USD 2.5 MILLION IN CASH OWNED BY ITALCAMBIO, THE COUNTRY'S
LARGEST CURRENCY EXCHANGE HOUSE. THE MONEY WAS ABOARD A
FLIGHT FROM MIAMI. ITALCAMBIO PRESIDENT CARLOS DORADO
CLAIMED THE SHIPMENT WAS ROUTINE AND THE SEIZURE IS IN
RETALIATION FOR HIS ANTI-CHAVEZ OPINIONS. HOWEVER,
SUPERINTENDENT OF BANKS IRVING OCHOA SAID ITALCAMBIO IS UNDER
INVESTIGATION FOR VIOLATION OF VENEZUELAN BANKING LAWS.
VENEZUELAN AUTHORITIES AND THE PRO-CHAVEZ PRESS HAVE USED THE
SEIZURE TO PROMULGATE CONSPIRACY THEORIES THAT IMPLICATE THE
USG IN VARIOUS NEFARIOUS SCHEMES. END SUMMARY.

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CASH SEIZED ON ARRIVAL
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2. (SBU) DECEMBER 30 VENEZUELAN CUSTOMS AGENTS AT SIMON
BOLIVAR INTERNATIONAL AIRPORT SEIZED A SHIPMENT OF USD 2.5
MILLION IN CASH THAT ARRIVED ON AN AMERICAN AIRLINES FLIGHT
FROM MIAMI. THE MONEY WAS CONSIGNED TO ITALCAMBIO,
VENEZUELA'S LARGEST FOREIGN EXCHANGE HOUSE AND TRAVEL AGENCY.
VENEZUELAN AUTHORITIES CONTINUE TO HOLD THE CASH AND CLAIM
THAT ITALCAMBIO FAILED TO PROPERLY DECLARE THE SHIPMENT.
AMERICAN AIRLINES PERSONNEL HAVE TOLD US CUSTOMS OFFICERS
THAT THE SHIPMENT WAS DECLARED PROPERLY BOTH ON DEPARTURE
FROM MIAMI AND ON ARRIVAL IN CARACAS.

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ITALCAMBIO: "ROUTINE"
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3. (C) ITALCAMBIO PRESIDENT CARLOS DORADO TOLD ECONCOUNS
JANUARY 6 THAT THE SEIZURE WAS PART OF A PATTERN OF GOV
HARASSMENT OF HIS FIRM IN RETALIATION FOR HIS FREQUENT
ANTI-CHAVEZ STATEMENTS TO THE PRESS. HE SAID THE SHIPMENT
WAS A ROUTINE ACTIVITY DRAWN FROM THE COMPANY'S BANK OF
AMERICA ACCOUNT IN THE US THAT REQUIRED NO SPECIAL ADVANCE
CUSTOMS NOTICE AND THAT FOLLOWED BOTH US AND VENEZUELAN
DECLARATION REQUIREMENTS. DORADO CLAIMED THAT AN OVERZEALOUS
VENEZUELAN CUSTOMS OFFICIAL AT THE AIRPORT HAD REPORTED THE
ARRIVAL OF THE MONEY TO NATIONAL CURRENCY CONTROL
ADMINISTRATION (CADIVI) PRESIDENT EDGAR HERNANDEZ BEHRENS.
HERNANDEZ BEHRENS APPARENTLY, AND MISTAKENLY, CALLED THE
SHIPMENT "CONTRABAND" ACCORDING TO DORADO. GIVEN HIS FIRM'S
PLACE AS AN IMPORTANT CONDUIT FOR LEGAL DISPERSAL OF
CADIVI-APPROVED EXCHANGE TRANSACTIONS, DORADO SAID HE WOULD
CALL ON THE SUPERINTENDENCY OF BANKS (SUDEBAN) AND THE
CENTRAL BANK TO ACKNOWLEDGE THAT ITALCAMBIO'S ACTIONS WERE
LEGITIMATE. HE STRESSED THAT THE MERE IMPORT OF DOLLARS FROM
THE US WAS NOT A CURRENCY "TRANSACTION" THAT FOREIGN EXCHANGE
CONTROLS WOULD GOVERN. THE MONEY, HE SAID, WAS BROUGHT IN
PRECISELY SO IT COULD BE USED IN LAWFUL TRANSACTIONS.

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SUDEBAN: "YES, BUT..."
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4. (C) IN TURN, SUDEBAN SUPERINTENDENT IRVING OCHOA TOLD
ECONOFF JANUARY 6 THAT ON ITS FACE ITALCAMBIO'S ACTIONS WERE
LEGAL. OCHOA SAID VENEZUELA HAS NO LAWS AGAINST THE
IMPORTATION OF PROPERLY DOCUMENTED FOREIGN CURRENCY.
HOWEVER, HE ALSO SAID THAT ITALCAMBIO COULD FACE LEGAL
PROBLEMS IF IT COULD NOT ACCOUNT FOR ALL OF ITS IMPORTED
DOLLARS IN CADIVI-APPROVED OFFICIAL EXCHANGE RATE OPERATIONS.
IF NOT, THEN ITALCAMBIO WOULD HAVE VIOLATED VENEZUELA'S
BANKING LAW ACCORDING TO OCHOA. HE WENT ON TO SAY THAT
SUDEBAN AUDITORS ARE ENGAGED IN DETERMINING IF ITALCAMBIO HAD
FOLLOWED THE LAW IN THIS REGARD. OCHOA NOTED THAT HE WAS
AWARE OF THE IRONY IN INVESTIGATING ITALCAMBIO ON THESE
GROUNDS WHEN INDIVIDUALS EXCHANGE DOLLARS ON THE STREET TWO
BLOCKS FROM HIS OWN OFFICE.

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"AND SPEAKING OF CONSPIRACIES..."
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5. (C) IN DISCUSSING THE ORIGIN OF THE MONEY AND ITALCAMBIO'S
MOTIVATIONS, OCHOA CLAIMED THAT INVESTIGATORS FROM DISIP,
VENEZUELA'S INTERNAL SECURITY SERVICE, HAD TOLD HIM THAT THEY
HAD PROOF THE SHIPMENT WAS A FUNNELING OPERATION FROM THE USG

CARACAS 00000100 002 OF 002

VE THE ACCUSATION;
ECONOFF RESPONDED THAT SUCH A CLAIM WAS ABSURD.

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COMMENT
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6. (C) PRO-CHAVEZ NEWSPAPER DIARIO VEA HAS MADE A PUBLIC
CRUSADE OF THE ITALCAMBIO CASE. IT HAS FLOATED THEORIES THAT
DORADO IS ENGAGED IN ACTIVITIES RANGING FROM BLACK MARKET
CURRENCY EXCHANGE TO MONEY LAUNDERING TO USG-BACKED
"CONSPIRACIES." INDEED, IN ONE BBC WEBSITE ARTICLE CULLED
FROM A DIARIO VEA REPORT, THE EMBASSY WAS ACCUSED COMPLICITY
WITH DORADO IN EFFORTS AT "DESTABILIZATION." THE PRESENCE OF
A CONTRACTED ITALCAMBIO TRAVEL OFFICE IN THE EMBASSY PROBABLY
PLAYS ITS PART IN FUELING SUCH WILD SPECULATION. ITALCAMBIO
IS ALSO THE AMERICAN EXPRESS SUBCONTACTOR IN VENEZUELA. IN
REALITY, ITALCAMBIO'S PROBLEMS ARISE FROM A CONFLUENCE OF
FACTORS: DORADO AS CHAVEZ CRITIC, ITALCAMBIO AS LEGITIMATE
EXCHANGE HOUSE AND PROBABLE CURRENCY BLACK MARKET AGENT, AND
VENEZUELA AS CONSPIRACY THEORY HOTHOUSE. IRVING OCHOA IS A
PRAGMATIST WHO IS LOATHE TO ALLOW SUDEBAN TO BE USED AS A
TOOL OF POLITICAL PRESSURE, BUT IN THIS HIGH PROFILE CASE HE
CANNOT TURN OFF THE SPOTLIGHT. DORADO REMAINS COMBATIVE AND
SAYS HE WILL NOT RESTRICT HIS CRITICISM OF CHAVEZ REGARDLESS
OF THE OUTCOME OF THE INVESTIGATION. AS VENEZUELAN LAW IS AT
BEST MURKY IN THE RELEVANT AREAS, THIS PROCESS WILL BE
PROTRACTED AND FILLED WITH INVECTIVE.
SHAPIRO


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