$84 Mn Embezzlement Case Underscores Venezuela Corruption

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Authorities have arrested a former Venezuela bank official accused of embezzling $84 million, while the daughter of the former president is also caught up in a financial crime scandal, two cases that serve to highlight the government corruption wracking the country.

On July 2, Venezuelan national Javier Elias Briceño Scott was arrested in Mexico City for allegedly embezzling $84 million through the government-managed China-Venezuela Fund, of the national bank BANDES, where he worked in executive management. Seven other individuals have been implicated in the case, including the executive manager of the fund and the legal coordinator, reported El Nuevo Herald.

The case comes amidst accusations Maria Gabriela Chavez, the daughter of late President Hugo Chavez, took part in a government purchase fraud scheme worth over $15 million, in which members of the Venezuelan government allegedly purchased corn and rice at significantly above market price.

InSight Crime Analysis

The China-Venezuela fund is just one of several large funds managed under the sole discretion of the president. The lack of transparency regarding how these are managed, as well as missing money, has led to past accusations one major fund — Fonden — was a slush fund used arbitrarily by the executive. 

The idea that high-level employees of the national bank managing one such fund were able to skim off such a large sum speaks to the overall deep corruption present within the Venezuelan government, and raises serious questions regarding the supervision of these accounts. 

According to Transparency International’s 2013 Corruption Perceptions Index, Venezuela is perceived as the second most corrupt country in Latin America after Haiti, with over half of its citizens believing the problem has been getting worse. On an international level, Venezuela ranked 160th out of 175 countries ranging from those perceived as least to most corrupt.

In addition to the government’s secretive financial dealings, the country’s police force and judicial system have been pointed to as particularly corrupt, a phenomenon that has helped fuel instability, violence and organized crime activity. A 2013 World Justice Project report ranked Venezuela’s judicial system as one of the worst in the world

SEE ALSO: Cartel de los Soles Profile

Rampant corruption has also seen the rise of the so-called “Cartel de los Soles,” a term used to refer to corrupt elements of the Venezuelan military involved in cocaine trafficking. In 2013, various members of the Bolivarian National Guard were arrested following the seizure of 1.3 tons of cocaine that had been flown from Venezuela to France on a commercial flight.

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