VENEZUELAN MILITARY INTELLIGENCE CONDUCTS RAID ON

C O N F I D E N T I A L CARACAS 001525

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E.O. 12958: DECL: 04/23/2018
TAGS: ECON EFIN ASEC VE
SUBJECT: VENEZUELAN MILITARY INTELLIGENCE CONDUCTS RAID ON
STANFORD BANK

Classified By: Economic Counselor Darnall Steuart for reasons 1.4 (b)
and (d).


1. (U) According to media reports, Directorate of Military
Intelligence (DIM) officials raided offices of Stanford Bank
in Caracas on Friday October 31. (Note: Stanford Bank, an
affiliate of the Houston-based Stanford Financial Group, is
one of two U.S. banks operating in Venezuela. It is a small
player in the Venezuelan market, accounting for one quarter
of one percent of total banking sector assets. It has 14
offices, five in Caracas and nine in other major cities in
the country. End note.) According to media reports, Reuters
quoted a military prosecutor as saying the raid was "a normal
procedure in an investigation of an old case of spying," and
the state TV channel indicated that three people "who had
formed part of the U.S. government" were being investigated.
Stanford Bank issued a statement saying that the bank had
always strictly complied with Venezuelan law in its 15 years
operating in Venezuela.


2. (C) According to Stanford Bank's security head (strictly
protect),the DIM officials took files and other information
from Stanford offices on October 31 and summoned bank
officials in for questioning on November 1. Per the security
director, the three bank employees under investigation
included a former DEA employee and a former U.S. AIR FORCE
service member, both of whom had worked in Stanford Bank's
Venezuela branch but now worked outside of Venezuela, and a
dual Venezuelan-American citizen. The security director
himself was questioned for eight hours at DIM headquarters on
November 1, with questions revolving around former USG
employees involved with the bank, the bank's use of
counter-surveillance equipment, and deposits of Venezuelan
government officials.


3. (C) According to economist Hugo Faria (strictly protect),
a member of the board of Stanford Bank in Venezuela, the raid
was not carried out on the banks' offices, but rather on the
offices of Stanford Financial Group "advisors" who help
Venezuelan clients manage dollar-denominated assets in
Stanford International Bank, which is located in Antigua.
Faria said there were a number of theories, or rumors,
circulating as to the reasons behind the raid, including the
following: (1) DIM was searching for deposits of "spies";
(2) DIM was searching for any offshore deposits made by Zulia
governor Manuel Rosales; and (3) the raid was related to the
bad blood between Stanford Financial Group and the former
president of Stanford Bank in Venezuela, Gonzalo Tirado.
(Note: Stanford Bank has had a controversial presence in
Venezuela. In addition to the bitter and ongoing legal
dispute between Stanford Financial Group and Tirado, Stanford
Bank in Venezuela has been the subject of money laundering
allegations. End note.)


4. (C) Comment: It will be difficult to find out the true
story behind this raid. The Embassy will continue to monitor
any public actions taken by the Venezuelan government against
Stanford Bank and Stanford Financial Group in Venezuela. End
comment.
CAULFIELD