• America’s best-known lawyer, a couple of fraudsters and a pariah government joined forces to sue the world’s largest commodities trading firms. The evidence is explosive, but the bungled lawsuit has so far come to nothing.

Liam Vaughan and Lucia Kassai, Bloomberg/Businesweek

LONDON/CARACAS
Energiesnet.com 04 21 2023

David Boies had turned 76 and was contemplating retirement when he received a call from an old friend, an investor named Bill Duker, about a potentially lucrative opportunity. Duker had recently agreed to finance an audacious lawsuit, and he wanted Boies, perhaps the highest-profile attorney in the US, to join. Duker told Boies he’d received evidence that the auctions Venezuela uses to sell its oil had been systematically rigged for a decade or more, depriving the economically beleaguered country of billions of dollars. Among the scheme’s beneficiaries, Duker said, were Glencore, Trafigura and Vitol, the three biggest commodity trading houses in the world, with combined annual revenue of a trillion dollars. Duker and his associates planned to sue them, in what would be one of America’s largest private civil actions.

Central to the case, Duker explained, was an old laptop once owned by the conspiracy’s alleged mastermind, Francisco “Squito” Morillo, a scrappy Venezuelan who’d implanted himself as a kind of unofficial intermediary between the state oil company and some of its key customers. The laptop contained a trove of explosive material, including instant message chats discussing confidential information and account statements for offshore companies that had made large, unexplained payments to family members of Venezuelan oil executives. It had reached Duker via Morillo’s bitter rival, Wilmer Ruperti, a medallion-sporting, cigar-puffing Venezuelan tycoon who’d obtained it from Morillo’s ex-wife.

Duker’s invitation came in March 2017, at a difficult moment for Boies. Once feted for helping the government break up Microsoft Corp. and fronting the civil case that ushered in same-sex marriage, Boies had begun to acquire a different sort of fame. Theranos, the blood-testing startup where he sat on the board, had been exposed as a fraud. Soon, Harvey Weinstein, one of his clients, would be unveiled as a sexual predator. In both instances, Boies would be criticized for hounding journalists and whistleblowers in an effort to suppress media coverage. Colleagues at his firm, Boies Schiller Flexner, urged him to lie low, but the older he got, the more he seemed to embrace controversy.

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Still, even for someone of Boies’s constitution, there were reasons to be cautious. For one thing, Duker, a former colleague of Boies’s at Cravath, Swaine & Moore, had lost his legal license and spent three years in prison in the 1990s for inflating fees. And Ruperti, the driving force behind the action, had himself been found guilty of fraud in the UK. If that weren’t enough, the client would be the Venezuelan government of Nicolás Maduro, a regime whose corruption, brutality and hostility to democracy had made it subject to US sanctions.

Boies didn’t blink. “If I were influenced by outside perceptions, I wouldn’t have taken on half the cases I have,” he told Bloomberg Businessweek over the course of two hourlong calls. “This was an extremely important case, not only for the Venezuelan people, whose resources were being looted, but it was also an opportunity to hold accountable corporations who violated every civilized norm of behavior.”

There were other motivations at play, too. Behind the scenes, Boies, Duker and associates of Ruperti structured the suit in such a way that, if they were successful, they’d get two-thirds of the spoils, a possible 10-figure sum. After 50 years of representing multinational corporations, Wall Street titans and presidential hopefuls, Boies was looking at a swan song assignment that had the potential to be his most personally profitable.

The suit landed on the docket in Miami in March 2018. Among the 40-plus defendants accused of insider trading, bribery, racketeering and money laundering were the likes of Glencore Plc and Trafigura Group Pte, as well as senior figures at the companies. The two sides engaged more than 70 lawyers, many of them senior partners at prestigious firms, setting the stage for an explosive trial. But a year later the case was dismissed amid allegations of avarice and incompetence on the part of Boies and his team. With the dismissal died an opportunity to unearth the truth about Venezuela’s auctions and claw back billions of dollars for a country suffering through a humanitarian crisis.

This investigation traces the unraveling of the Boies case and picks up where it left off. Drawing on previously unseen material from Morillo’s laptop, unpublished documents gathered by investigators, leaked financial records and more than a hundred interviews, it tells the story of how Morillo built his empire in the shadows of Venezuela’s socialist regime and how it was ultimately blown apart by a woman who believed she’d been wronged. Many of the people interviewed asked not to be named because of ongoing investigations or fear of repercussions, but their accounts, combined with the available evidence, support the lawsuit’s central claim: that for many years, Venezuela was pillaged for the benefit of Morillo and a handful of his clients at some of the world’s wealthiest companies. So far, no one has been held to account.

Francisco Henrique Morillo was born in 1980 into a wealthy family in the oil-rich Zulia region of northwestern Venezuela. His grandfather and namesake was president of a bank, vice chancellor of a university and a member of the regional Supreme Court. His father was an executive at a construction company. When both passed away in quick succession and his mother remarried, Morillo was sent to Riverside Military Academy in Gainesville, Georgia, where he received a buzz cut and some brutal hazing. He adapted and before long was making money buying cigarettes in cartons at a gas station and selling them for $5 a pack.

Two years later, Morillo returned to Caracas for high school and fell in love with Vanessa Acosta Friedman, a striking, serious girl with blond hair and a steely streak to match his own. With classmates, Morillo could be violent and unruly, Acosta Friedman would tell members of the plaintiff team, but with her he was affectionate, even sensitive.

Morillo’s career path was set during a chance encounter on a golf course when he was 19. Waiting to tee off, he and Acosta Friedman noticed a squat man in his 40s who was angrily hacking up the course. It was Ruperti. The three became friendly, and Ruperti offered Morillo a job at his small shipping company. “They were like an extension of my family,” Ruperti says. (Morillo declined to be interviewed for this story or to provide any comment on a list of facts provided by Businessweek.)

In 1998, the year Hugo Chávez was first elected president, the Venezuelan oil industry was flying, producing 5% of the world’s supply. Ruperti found his way into the action by calling in favors to help a then-modest Dutch outfit called Trafigura—now the world’s second-largest oil trader—secure access to Venezuela’s ports. Impressed, the company hired Ruperti to expand its Caracas operations. Morillo went with him.

Trafigura ended up parting ways with Ruperti after he threw one lavish party too many. Morillo stayed on but continued working with his mentor on the side, including, court records show, on a deal that would land Ruperti in legal strife. In 2002, Ruperti arranged for a Russian firm to lease tankers to Venezuela’s state oil company, Petróleos de Venezuela SA, or PDVSA (pronounced “pay-de-vay-sa”). The Russians thought they were supplying the ships to PDVSA directly, but in reality their contract was with a similar-sounding company Ruperti had set up. By taking in more than he passed on, Ruperti made $60 million, a UK judge found. “Senior management at Novoship and PDVSA, as well as the Russian and Venezuelan governments, were aware of my strategy to hire vessels this way,” says Ruperti, who reached an undisclosed settlement with the Russian company.

It’s hard to overstate how important PDVSA is to Venezuela’s economy; it accounts for roughly 95% of the country’s revenue from abroad. When Chávez came to power, he looked to assert control of the company by replacing its executives with party loyalists. In response, thousands of PDVSA managers walked out and tankers blockaded a crucial shipping channel. During this time, Morillo got a job in PDVSA’s hollowed-out trading department, where he made connections that would underpin his future success. Ruperti, meanwhile, helped the government break the strike by bringing in gasoline from Russia, earning Chávez’s favor and bumping him up the queue for contracts to ship Venezuelan oil around the world.

Morillo was a natural dealmaker: bold and persuasive, with an antenna for a counterparty’s weaknesses and desires. One associate describes him as having a chameleonic quality, as comfortable in Caracas high society as he was talking dirty over a cigarette with a group of traders. He earned the nickname Squito, short for mosquito, because he buzzed around until he drew blood. In 2004, Morillo left PDVSA to start his own business, along with a former PDVSA trader and trained chemical engineer named Leonardo Baquero. They set up shop in Morillo and Acosta Friedman’s apartment, selecting the name Helsinge—a town in Denmark—from a list of suggestions provided by a lawyer. Only later, when a friend told them to say the word out loud in a Spanish accent, did they wonder if they’d made a mistake: In Venezuela, “el singe” sounds like “the f—er.”

Helsinge, which had fewer than a dozen employees, presented itself as a consulting company, one that advised foreign corporations on how to navigate Venezuela’s tricky political terrain and gain access to the country’s oil. It built a client roster that included powerful figures at the world’s biggest commodity traders, including Jose Maria Larocca, Trafigura’s long-standing head of oil, and Tony Maarraoui, Latin America head at Vitol.

As money flooded in, Morillo and Acosta Friedman bought property, chartered jets and ran with fast-living crowds in Caracas and Miami. At one point, Morillo got a side gig as a sales rep for a yacht manufacturer, giving him access to luxury vessels when they weren’t in use. In 2005 the couple married at Quinta Esmeralda, a venue renowned for hosting bashes for Caracas’s bolibourgeoisie. In photos they’re beaming, Morillo’s hair slicked back like a matinee idol’s, Acosta Friedman’s neck draped in diamonds. Before the ceremony, she signed a prenup.

One person not invited to the wedding was Ruperti, who within a couple of years had gone from being a father figure to Morillo to his enemy. Ruperti believed Morillo had been disloyal for striking out on his own; Morillo told friends he’d wanted to be free of the older man’s influence. Traders who once looked to Ruperti to help them secure Venezuelan oil now turned to Morillo instead. A few years after the wedding, the men and their entourages came to blows on the dance floor at a New Year’s Eve party in the Dominican Republic, while a band played the merengue.

As Morillo’s business grew, his relationship with Acosta Friedman fell apart. In 2012 the couple divorced, with Acosta Friedman holding on to their Caracas apartment, which still contained some of Morillo’s things. Believing he’d disguised the true extent of his wealth, she hired lawyers to force him to pay up, without success. She was alerted to the potential value of the laptop, she told Boies and his associates, when Morillo’s friends and enemies alike started inquiring into its whereabouts. Acosta Friedman kept it hidden even after she was rammed off a road by unknown assailants, she said. When two men showed up at her mother’s house asking questions about Morillo in 2016, she decided to pay Ruperti a visit.

By now, Ruperti was extremely wealthy—flanked by bodyguards and living in a mansion beside a golf course. He’d become a recognizable figure in Venezuela, a brooding survivor who famously gifted Chávez a $2 million pair of pistols once owned by Simón Bolívar, the 19th century liberator. When Acosta Friedman came to his door in tears, Ruperti lit a cigar and promised to do everything in his power to help.

One message had the subject line “dude delete these files later please”
 

Six weeks later a nervous Acosta Friedman checked into a sleepy hotel on the island of Aruba, 20 miles north of Venezuela, wheeling a black suitcase. Inside it were Morillo’s laptop, some manila folders and one of Morillo’s old phones. The next day she handed everything to a contact of Ruperti’s, a London police detective turned private investigator named John Brennan, aka Blondie. Blondie, whose hair had long since turned gray, arranged for the items to be cataloged and analyzed in the US. When Boies, a few months later, reviewed the haul that would form the bedrock of his complaint, he was amazed. “In terms of the quality of the evidence, the extent of the misconduct, the amount of money, this was right at the top of anything I’ve seen in my career,” he says. “It really demonstrated a long-running, massive and very sophisticated conspiracy.”

Morillo had conducted much of his early business using Yahoo! Messenger, and his computer contained a cache of chats spanning 2003 to 2008. Businessweek reviewed four months’ worth of conversations from 2006, a voluminous file showing that Morillo was in almost-constant dialogue with both his clients and PDVSA insiders.

In one series of chats from March 14, 2006, Morillo, using the screen name George White, guided three prominent commodity traders—Maarraoui at Vitol, Gustavo Gabaldon at Glencore and Maximiliano Poveda at Trafigura—through auctions for fuel oil and a product called vacuum gas oil, which is used to make gasoline. At 9:51 a.m., nine minutes before the offers were due, Morillo shared details of the bids PDVSA had received for the vacuum gas oil—information PDVSA says is supposed to be confidential. Five minutes later he informed the three traders, via separate chats, of a late bid for the fuel oil.

The traders didn’t enter every auction, but when they did bid, the information Morillo had provided let them know at what price to do so. On March 20, 2006, after learning about offers from BP Plc and two other companies, Maarraoui placed a bid to buy gas oil at 0.8¢ per gallon more than the next-highest bidder. Two days later, Poveda won a liquefied petroleum gas auction after being told about two rival offers and besting them by a cent.

These conversations, a handful among thousands, demonstrate how valuable Helsinge’s service was to its customers—and how potentially devastating it was to the Venezuelan people. If Morillo’s clients had been forced to enter the market blind, they likely would have placed some bids at $5 or $10 per metric ton higher than they needed to, as the chats show their competitors did. Instead the traders were able to win auctions they entered by a dollar or less, saving as much as $1.5 million on a typical 150,000-ton cargo. According to the Boies complaint, they’d pay Helsinge about $300,000 on a shipment of that size. PDVSA declined to provide data to Businessweek on the outcome of its auctions, or to comment for this story, but given that the company conducted dozens of auctions each month as buyer and seller, and that Helsinge was in business for 15 years, it’s conceivable Venezuela lost out on several billion this way.

Morillo didn’t just advise his clients on how to win PDVSA’s oil auctions; he also offered to let them broadly shape the deals. Whenever PDVSA sells oil, it issues what’s called a tender document—a detailed description of its preferences on matters such as delivery date, mode of transportation and terms of payment. Any buyer able to dictate these terms could all but guarantee success by, for example, making sure it’s the only bidder with access to a particular shipping company on a given day.

On Aug. 23, 2005, Morillo emailed a group of Trafigura traders, including the firm’s current executive director, Jose Larocca, saying, “Something you might like…we have the opportunity to write the terms of the ­tender for the crude oil at our convenience as long as everything is justifiable with in [sic] reason.”

“Excellent,” one of the Trafigura traders replied, adding, “If we get to draft the tender we should make sure NONE of the options we suggest are mentioned. We want people to think it’s straightforward…if we publish the options then we give away the advantage.”

Documents indicate Morillo then took Trafigura’s requests and passed them along to a PDVSA insider he was paying. “As soon as you send it back to me, I will foward [sic] it for there [sic] last look and we will do it all over again until [it] is perfect!” Morillo wrote on Sept. 1.

The exchange is included among the evidence held by prosecutors in Geneva who have looked into Helsinge and PDVSA. The Swiss publishing group Tamedia shared it with Businessweek. Trafigura was PDVSA’s biggest customer from 2004 to 2017.

Traders from two oil companies told Businessweek that they’d stopped participating in PDVSA’s auctions because they were sick of losing to the same players. “Putting together an offer takes time. You need to figure out the economics, freight, insurance, the hedge, then submit to your compliance, get signatures from God knows who before you’re able to submit a number,” says one of the individuals, who asked not to be identified. “After a while we just gave up. It became clear to us that something funny was happening.”

Maarraoui, who left Vitol in 2019, didn’t respond to requests for comment for this article. A spokesperson for Vitol wrote, “Vitol’s relationship with Helsinge has been looked into by relevant authorities and no evidence of a corrupt scheme has been found.” Poveda’s lawyer says his client, now at Novum Energy, won’t comment because of ongoing legal proceedings but denies any wrongdoing. Trafigura declined to comment on any specifics but said in a statement, “The attempt to bring a legal action has already been rejected on multiple occasions. In addition, we believe there is no merit in the legal action and will continue to vigorously defend our position.” Glencore declined to comment. Gabaldon did not respond to requests for comment; nor did Morillo’s business partner, Baquero.

While Morillo and his colleagues were offering their services to traders, they were also sending thousands of dollars to PDVSA insiders, documents from the laptop show. Principal among them was Rene Hecker, manager of the commercial and supply unit, which handled PDVSA’s buying and selling. As well as routinely passing along information, Hecker talked to Morillo about the need to encrypt their conversations and about an offshore company he’d set up in Panama. In one message, Hecker sent Morillo banking information for his father-in-law, known as Gigante, writing in the subject line, “chamo elimina estos archivos despues please” (“dude delete these files later please”). Before Christmas 2004, Gigante received two payments totaling $400,000, Morillo’s bank statements show. Hecker, who was not named as a defendant in the US case, didn’t return requests for comment.

The folders Acosta Friedman handed over in Aruba contained formation documents for seven shell companies Morillo and Baquero had set up from 2002 to 2006 in Panama and Barbados. Bank records on the laptop show that these entities took in payments from Helsinge’s clients and made them to Hecker and his peers. By cross-referencing the transactions with the results of PDVSA’s tenders, Boies’s team identified a pattern. In October 2004, for example, Vitol transferred $461,267 to Hornberg Inc., one of Morillo’s Panamanian entities. Two days later, $104,522 went from Hornberg to Hecker’s company in Panama. In the two weeks after the payments, Vitol won five contracts from PDVSA worth a total of $44.2 million. On a single day in March 2005, $49,997 entered Hornberg from Trafigura and $115,000 was paid out to Hecker’s father-in-law. In a two-week period before and after the payments, Trafigura won seven contracts from PDVSA worth $48.6 million.
 

Excited by the evidence in their possession, various combinations of Boies, Ruperti, Blondie (the private investigator) and Duker (the moneyman) met over the summer of 2017 in various offices and on Duker’s 230‑foot sailboat, Sybaris, named for an ancient Greek city famous for its excess. There were a number of issues to be hashed out, not least who the plaintiff should be. One possibility was to bring a suit on behalf of any oil companies that had missed out during the rigged auctions, such as BP Plc or Chevron Corp., but the group decided this would limit the scope of any action and provide little incentive for the Venezuelans to cooperate. The better option, they agreed, was to make PDVSA itself the plaintiff, even if a number of its employees were implicated.

The problem, say members of the plaintiffs’ group, was that both PDVSA and the Republic of Venezuela had a long list of creditors who’d be waiting in line to claim the proceeds from any US lawsuit. Boies instead proposed filing a suit on behalf of a new legal entity, established in New York and named the PDVSA US Litigation Trust. Boies says this was to avoid interference from crooked politicians in Venezuela, but it had the added benefit of keeping any award away from creditors.

First they needed to persuade the Maduro administration to let them bring a claim on PDVSA’s behalf. They’d heard that some members of the regime would dislike the idea of spotlighting the country’s affairs. But Venezuela was in a dire economic situation, with raging inflation and food shortages, and this was an opportunity to recoup a lot of money without doing much.

Ruperti introduced Boies and Duker to Nelson Martinez, Venezuela’s newly installed oil minister, and Reinaldo Muñoz Pedroza, the country’s attorney general. On July 12, 2017, the parties came to an agreement: Blondie, Duker and the lawyers would get 66% of the proceeds, leaving 34% for PDVSA. Boies says he gave PDVSA two other options: funding the investigation itself and paying the legal fees, or funding the investigation and, in lieu of fees, giving his firm its standard contingency of one-third of any recovery. The Venezuelans declined those choices. “The risks inherent in this kind of litigation are high,” Boies says. “You’re not going to get lawyers to take it on unless they get paid or they have a substantial upside.”

The agreement, later published in court, doesn’t contain any details about whether Ruperti or Acosta Friedman, the instigators of the case, would be compensated, or if the Venezuelan officials, Martinez and Muñoz, stood to gain personally from signing the paperwork. Acosta Friedman and Blondie declined to comment for this article. Ruperti says his only motivation is to “help Vanessa” and bring “justice to PDVSA” (though one of his sons, an aspiring lawyer, did get a paralegal job at Boies Schiller Flexner).

Beyond financial arrangements, there was another issue to consider. As striking as the evidence Acosta Friedman provided was, it ended abruptly in 2008. In 2011, Helsinge had been given a license to trade directly with PDVSA, meaning it was no longer solely an adviser to companies such as Vitol and Trafigura but a rival, too. Since then, despite being a relative minnow, it had been involved in deals worth $4 billion. The plaintiffs wanted to find out whether the company’s alleged strategy of paying off insiders had continued.

In October 2017 the group sent a digital forensics expert to PDVSA’s Caracas headquarters, where, with the backing of Martinez, he was given access to a server room under the guise of being a contractor. The expert wrote in an affidavit that on one server he discovered “digital footprints” indicating that two Helsinge employees had gained access to auction data as recently as that spring. (A defense expert wrote that the report failed to offer any “objective support or documentation” for its assertions.)

Meanwhile, Boies Schiller Flexner instructed a Swiss law firm to file a criminal complaint against Helsinge in Geneva. Helsinge, Trafigura, Vitol and Glencore all have Swiss offices; the hope was that the European authorities would find incriminating material they could use to buttress the US suit.

In February 2018 the plaintiffs learned Helsinge was holding a work gathering in Geneva. Morillo and Baquero didn’t show up, but several other Helsinge employees checked into a hotel opposite the company’s office. On Feb. 28, Blondie gave a statement to the city’s financial crime unit, urging them to pounce. Three days later, at 4 a.m., police entered the hotel and started making arrests.

“Jailed? Did I hear jailed?” the judge asked, trying to keep up
 

PDVSA US Litigation Trust’s case was filed in the Southern District of Florida on March 3, 2018. Alongside Morillo and Baquero, it named 42 defendants, including Glencore, Trafigura, Vitol, Colonial Group and Lukoil; individual traders who worked at those companies; and a glut of predominantly Swiss bankers. As well as insider trading, bribery and money laundering, the suit accused the trading companies of routinely underpaying Venezuela for cargoes of oil and then inducing corrupt officials to turn a blind eye. In press interviews, Boies estimated the losses at $10 billion, and several of the 19 counts in the complaint carried the possibility of triple damages.

Among those the Swiss had detained was Helsinge’s bookkeeper, a former Marine in his 70s named John “Jack” Ryan. Under questioning, Ryan told Swiss prosecutors he kept a server containing Helsinge records at his bungalow in Florida. In exchange for his release, he got his husband to send the device to Geneva via FedEx. When the Boies camp learned that critical evidence might be slipping away, they made an emergency application to stop the server from leaving the country, but it was too late—the device was already gone, along with the plaintiffs’ best chance of finding out what Helsinge had been up to for the past few years.

Back in court in Miami, before the proceedings could turn to the matter of whether Helsinge and its customers had committed any crimes, Boies needed to demonstrate that the trust had standing—the legal right to bring a case. In most lawsuits, an injured party files a complaint and the two sides argue over its merits. Here you had an opaque New York vehicle claiming to represent Venezuela’s state oil company, which itself was controlled by a corrupt dictator subject to sanctions. Beyond that, it was unclear from the preliminary filings who controlled the trust and who stood to benefit. In July 2018 the defendants filed a motion to have the case dismissed on the grounds that the trust was illegitimate.

What followed was a kind of courtroom farce, as Boies Schiller Flexner’s increasingly desperate efforts to demonstrate the trust’s bona fides fell apart under scrutiny. Defense lawyers sought to depose Venezuelan signatories to the litigation agreement among the various parties, but none could be pinned down. One had simply vanished. Another, Martinez, the oil minister, had recently been arrested in Venezuela and charged with corruption. “Jailed? Did I hear jailed?” the judge asked, trying to keep up. When PDVSA’s general counsel did finally commit to going to the US to be deposed, two dozen attorneys booked flights and hotels, only for the witness to pull out at the last minute, apparently under orders from Maduro himself.

The plaintiffs’ position was further undermined by how poorly news of the litigation was going down in South America. As part of the discovery process, Boies Schiller Flexner was ordered to hand over the agreement letter laying out the 66%-34% split. It was pilloried on Venezuelan state television. On April 24, 2018, the National Assembly, home to what remains of the country’s opposition, published a decree describing the trust as “a mechanism to divert the funds and resources” of Venezuela.

Maduro, who didn’t respond to requests for comment, demanded the deal be redrawn. Boies and Duker flew to the Dominican Republic to meet the president’s representatives and agree to a new set of terms: The Venezuelans would now get 45% on the first billion dollars recouped, rising to 55% after that. Even so, there were signs that the administration was no longer entirely committed to the suit—or was at least keeping its options open. Infodio, a well-informed blog on Venezuelan corruption, reported that PDVSA continued to hold meetings about prospective deals with one of the defendants, Trafigura, even as the case was being heard.

What was perhaps the fatal blow came in early 2019, when the Trump administration ratcheted up sanctions against Venezuela, declaring PDVSA a “corrupt enterprise.” Defense counsel took the opportunity to bolster its motion to dismiss. Assuming Boies could even demonstrate he had a mandate, the defense said, letting him pursue the case now would “undermine US foreign policy by strengthening Maduro’s hand.”

By March 8, 2019, the judge’s mind was made up. Dismissing the case, he wrote, “While the Court is mindful of the suffering of the people of Venezuela and severity of allegations against Defendants, it cannot create standing where there is none.” In a final indignity, the plaintiffs were ordered to pay $209,732 to the defense attorneys for the time they’d wasted preparing for canceled depositions.

Morillo celebrated the suit’s collapse from Mexico. In his eyes the entire case had been an attempt by his ex-wife and former mentor to get revenge. Regardless, the evidence was out there now, and investigations continued. In Geneva prosecutors quickly procured bank records that offered insights into Helsinge’s more recent activities. Transactions cited by the prosecutors show that Swiss accounts tied to Hecker, the PDVSA inside man, received payments totaling $960,000 from companies that Morillo and Baquero owned, the most recent coming in March 2017. A sister of Vitol executive Maarraoui received in excess of $3 million from the same entities from 2009 to 2012.

Even so, momentum ebbed. In spring 2019 the lead prosecutor on the case left to become a judge. Venezuela’s shifting political situation further complicated matters. After a rigged general election, opposition leader Juan Guaidó responded to rising civil unrest by declaring himself president in absentia. When the US backed him, refusing to have any further dealings with Maduro, Morillo jumped on the development to argue that the investigation should be scrapped, because PDVSA was an illegitimate entity. The Swiss courts ultimately disagreed, but two years had been spent on the issue. A spokesman for the Geneva prosecutor’s office says the investigation, now into its sixth year, is ongoing, declining to comment further.

In the US, the investigations arm of the Department of Homeland Security sequestered the evidence on Morillo’s laptop. Since then, several people tied to the case have been interviewed by the office as well as by various branches of the US Department of Justice. Spokespeople for the agencies declined to comment on the status of any investigations.

Businessweek’s own interviews support some of the allegations in the Swiss and US complaints. Several traders describe Helsinge telling them it could guarantee success in Venezuela’s auctions if they became clients. A defendant in the case, who spoke on condition of anonymity, denies paying bribes—his firm paid Helsinge “consultancy fees”—but says that exchanging information on rival bids and tenders was “the way of doing business” in South America at the time. Similar scandals have been uncovered in recent years in Brazil and Ecuador. Glencore and Vitol have paid a combined $1.3 billion to settle wide-ranging probes into their alleged use of middlemen and bribery globally.

Establishing how much money Morillo and his colleagues made is difficult, but last year the Organized Crime and Corruption Reporting Project ran an investigation called “Suisse Secrets,” based on a leak of Credit Suisse Group AG banking records. Information shared with Businessweek by the OCCRP shows that Morillo and Baquero had a joint Credit Suisse account with a balance of $71 million in 2012. A midranking Helsinge employee had $4 million in her account in 2015. Helsinge-related entities used at least five other banks, records show.

Boies Schiller Flexner unsuccessfully appealed the Florida dismissal in 2019. Then, in May 2021, the firm refiled the complaint with PDVSA, rather than the trust, listed as the plaintiff. The judge rejected the substitution, saying it should’ve been made “much earlier.” An appeal of that decision was rejected by the Eleventh Circuit Court last month, on the grounds that the Department of State still regards Maduro as an illegitimate leader. “It is disappointing that a country that prides itself on the rule of law has made it nearly impossible for a litigant to assert claims of fraud against the people of Venezuela,” says Duker, the litigation’s funder.

Duker and Boies say they hope that a recent thawing in US-Venezuela relations will one day lead the US government to reassess its position and thereby open the door for the suit to be refiled once more. “One thing I can say is, we’re patient,” Boies says.

His willingness to take on clients such as Maduro and Harvey Weinstein continues to have an impact on his firm. Since 2020 dozens of Boies Schiller partners have left, several publicly citing the founder’s perceived lack of ethics and transparency. Boies, now 82, seems unfazed by the criticism, which he maintains has always been more important to the media than to his clients. “People forget how controversial cases are,” he says. “If you take them on and you win them, people forget.”

Today, after two decades of authoritarian rule and six years of sanctions, Venezuela is destitute. A third of the population has fled. Oil facilities have fallen into disrepair. The country remains beset by corruption. Over the past two months, the government has arrested more than 50 PDVSA employees as part of an investigation into graft since 2017.

Helsinge’s old customers, meanwhile, enjoy the fruits of their success. Gustavo Gabaldon, formerly of Glencore, owns an $8 million Manhattan apartment adorned with Venezuelan folk art. Members of his family can be seen on social media celebrating the good life on Caribbean islands. Tony Maarraoui retired from Vitol in Houston four years ago with more than $100 million, according to sources at the company. Trafigura’s Jose Larocca is an Olympic show jumper in his spare time, with a stable of some of the world’s best horses. He now sits on Trafigura’s board. —With Fabiola Zerpa and Hugo Miller

bloomberg.com 04 20 2023