Financial Adviser Cops To Hiding Ecuadorian Oil Bribes

Jose Larrea, 40, pled guilty to one count of conspiracy to commit money laundering for his role in covering up the bribery of PetroEcuador officials.

Law360 - Cara Bayles 12/09/2018

A U.S.-based financial adviser pled guilty Tuesday in Florida federal court to his role in a bribery and money laundering scheme that allegedly helped an oil services contractor gain $27.8 million in business from Ecuador's state-owned oil company.

Jose Larrea, 40, pled guilty to one count of conspiracy to commit money laundering for his role in covering up the bribery of PetroEcuador officials. In court on Tuesday, he admitted to U.S. District Judge Marcia Cooke that he’d wired more than $1 million from his own U.S.-based bank account to several other U.S.-based accounts between January 2013 and February 2018, according to the U.S. Department of Justice.

The transfers, as well as documents that Larrea is accused of backdating, were allegedly meant to hide payments GalileoEnergy SA, an Ecuadorian oil services contractor, made to PetroEcuador officials. The bribes were meant to help the company keep old contracts and drum up new business, according to an indictment filed in April.

According to that filing, Larrea conspired to “conduct a financial transaction affecting interstate and foreign commerce … knowing that the property involved in the financial transaction represented the proceeds of some form of unlawful activity, and knowing that the transaction was designed in whole and in part, to conceal and disguise the nature, the location, the source, the ownership and the control of the proceeds of specified unlawful activity.”

The indictment, which was entered April 20, alleges that Frank Roberto Chatburn Ripalda, a dual U.S. and Ecuador citizen living in South Florida, and Larrea, a U.S. citizen living in Miami, ushered through more than $3.2 million in bribes to officials of Empresa Publica de Hidrocarburos del Ecuador, known as PetroEcuador, to obtain and maintain contracts for GalileoEnergy.

As part of the alleged conspiracy, which prosecutors say ran from 2013 through 2015, Chatburn Ripalda set up a Panamanian shell company called Denfield Investments Inc. He used Denfield and an escrow agent in the British Virgin Islands, referred to only as an “intermediary company” in the indictment, to funnel and conceal bribe payments to the PetroEcuador officials, prosecutors said.

Chatburn Ripalda also allegedly helped two PetroEcuador officials set up offshore shell corporations and open Swiss bank accounts to conceal the money they illicitly received. The indictment details several wire transfers, ranging from $50,000 to $700,000, that he allegedly made as part of the conspiracy.

The indictment also sought to make Chatburn Ripalda and Larrea forfeit any proceeds or property derived from proceeds obtained through the scheme. The government listed two properties in Miami and Miami Beach that it could take as possible substitute property if property subject to forfeiture couldn’t be located or recovered.

The government’s case has been marked by delays. Larrea was originally supposed to enter a guilty plea on July 3, but he canceled on the eve of that hearing, saying he’d lost confidence in his counsel, an announcement that made it unclear whether he still intended to plead guilty. Larrea’s trial, set to begin Aug. 20, was pushed to April 2019.

Then, Chatburn Ripalda’s arraignment, also set for early July, was delayed after he requested extra time to work out financial arrangements with new counsel.