Sunday , August 1 2021

The fall of fugitive "Batman" puts global oil trading on the ground

To his friend,

Rodrigo Berkowitz lived within his assets in a rental house in the suburb of Houston.

A former oil trader for a state-controlled manufacturer

Petroleo Brasileiro SA bought clothes in sales centers and sent two daughters to public school.

For a family Christmas trip to Orlando, his plan was to drive 960 miles in his black sports utility Honda CR-V – because it was crazy to spend on airline tickets, he said.

So they were shocked when news came in December that the Brazilian Federal Police issued an arrest warrant for about 15 former oil traders and brokers.

While some of the suspects appeared in previous corruption investigations in Brazil, this time a new name appeared: Berkowitz.

Brazilian prosecutors have said that a thirteen-year-old trader was part of a group of former Petrobras employees who have been accused of having taken over $ 31 million bribes from brokers linked to some of the world's largest trading companies; Glencore,

Vitol Group in

Trafigura, between 2011 and 2014

In return, companies received more contracts at reduced prices.

Digging into popular code-name culture, Berkowitz was "Batman", while the former boss used "Phil Collins" and another "Flipper", court documents suggest.

Scandal with car wash

The investigation has grown into a long-standing scandal over the bribery of Carwash in Brazil, which has so far captured many local business leaders, including several Petrobras directors, and politicians, especially former President Luiz Inacia.

Lula da Silva.

Now Berkowitz's case could open the window into an unclear world of commodity trading, where businesses buy and sell billions of dollars of raw materials and fossil fuels, often with little direct regulatory control.

The Brazilian police are striving for government involvement in the United States, Switzerland, the United Kingdom, the Bahamas and Uruguay, which can expose companies to a widespread review.

The United States Department of Justice and the Federal Investigation Bureau joined Brazil's investigation, and the US authorities could open their own probe, said Filipe Pace, head of the Carwash probe, in an interview in Curitiba, Brazil.

The Ministry of Justice has rejected comments on Petrobras.

"We believe that there is extensive evidence available in Brazil to open a US official investigation," Pace said. "We want anyone to prove that he has committed a crime to persecute him in Brazil or in the United States".

"No tolerance"

Vitol said he was working with the Brazilian authorities and that it would be inappropriate to comment on certain accusations.

"Vitol reiterates that it has a policy of zero tolerance of bribery and corruption, and that Vitol, as has already been said, will always cooperate with the authorities in any jurisdiction in which it operates," the company said in a statement.

Trafigura said that the accusations were serious and denied that the management had any knowledge of the alleged scheme. Glencore said that he takes ethics and coherence seriously and is involved in the investigation.

Information Visa

Suspects already work with authorities. Brazil, accused of being a broker for commercial companies that was briefly detained in Florida in December, is working with US authorities and has received a visa for the witness, Pace said.

Former executive and ex-Trafigure board member attempts to obtain a plea bargain in Brazil.

Berkowitz also cooperates with the US authorities and could potentially expose his allegedly unlawful links with commercial companies, depending on the person who knows the inquiries, who asked him not to be called because information is not public.

There is evidence that he was engaged in illegal activities until the Brazilian judge issued an arrest warrant in early December, he said.

Among Petrobras officials targeted by Brazilian prosecutors, Berkowitz was the only one who was still busy when the accusations came in, while others retire after the alleged crimes took place.

"Very proud"

Electronic messages intercepted by Carwash point to close links with executives in Vitol, Pace said.

"He boasts in messages that nobody could negotiate with Vitol, as he did," Pace told Berkowitz.

"He was very proud of what he did."

The trader, who worked for Petrobras for 17 years, was fired on the same day as the arrest warrant was issued, he was prohibited from entering the Houston office in Petrobras, and his belongings were sent to the home box.

The Brazilian authorities now consider him a fugitive. His name was listed on the Interpol red list of persons who will be detained and handed over.

Berkowitz did not respond to phone calls that require comment. Petrobras said that on 5 December he launched an internal investigation that is still underway.

The accusations against Berkowitz did not fit the reputation he had at work in Houston. The rowmen praised his qualifications and organizational skills.

They saw him as a pattern of ethical respect in a company that remained traumatized after some former executives had been sent to jail since Carwash began in 2014.

Normal life

For a fugitive, Berkowitz seems to live normally, according to people who have noticed and asked that they can not be identified. They say they saw him buying food at Target Corp., eating in restaurants and taking the kids to Texas parks.

Berkowitz's father was arrested in Brazil and charged with washing at least $ 910,000 for his son over an offshore account in Uruguay. The Brazilian police followed a bank record of transactions and electronic communications messages.

They include payments from accounts in Switzerland to Uruguay.

His father confirmed financial transactions, but said he was unaware that the result of illegal activities was, according to a petition, filed with the court in the Brazilian state of Paran. His lawyer, Joao Francisco Neto, said his release was approved by the judge until he paid $ 5 million, which the defense contests.

Fuel for vessels

Berkowitz was among the group of traders authorized to negotiate deals for the sale of Petrobras petroleum products. By telephone call, his group could close multi-million dollar contracts with commercial companies, which would then sell the product to end-users.

Berkowitz was primarily responsible for the sale of Petrobras heating oil, a by-product of refining raw materials, which is mainly used for the production of electricity or as a fuel for large ships. This is a volatile market: hurricanes or explosion of refineries can unexpectedly raise prices.

Berkowitz has for many years allegedly taken bribes in return for contracts on commercial companies and a discount on fuel oil in accordance with the accusations of prosecutors on December 19, published on the court's website.

In Vitopol's contracts, for example, the Brazilian police have pursued more than 80 oil and oil products and another product called VGO, or Vacuum Gas Oil, used by the refiners in accordance with the indictment.

Trader's cut

In one of the transactions, participants shared $ 1 per barrel in the bribe – 27 cents for Berkowitz and the rest for his peers, according to prosecutors. Money was, among other things, redirected to offshore accounts in the United States, the United Kingdom, Sweden, Switzerland and Uruguay.

"With large quantities and small differences in prices, millions of bribes could be created," the prosecutors said in a court paper.

The prosecutors say that managers from commercial companies had a "common and unambiguous" knowledge of vaccination.

In Vitol, police and prosecutors say he is the company's leader in the US,

Mike Loya and Tony Maarraoui, who are responsible for Latin America and the Caribbean, were "involved" and "given consent" to the alleged illegal transactions that Berkowitz would create as a trader.

"It's too naive to think that such high-level executives did not know how the industry works and its dirty side and they did not know that they allow bribes," said Pace. Loya and Maarraoui could not immediately get a comment.

Brazil focuses

Loya and Maarraoui are not indicted in Brazil. Pace said his team focused on Brazilians and expects foreigners to be prosecuted by authorities in the US or other countries where they were established. This would be more effective and increase the prospect of a conviction, he said.

Non-governmental organizations active in anti-corruption campaigns call on regulators and the Swiss authorities to investigate the use of intermediaries in order to secure lucrative business in rich-oil countries.

In November, Global Witness invited the United Kingdom, the United States and Switzerland to study the activities of Glencore, Vitola and Trafigure in Brazil.

Meanwhile, Berkowitz left the rental home and moved to a two-bedroom apartment in the same area, according to people they know. The announcement on Facebook shows that the family sells furniture and appliances, including a French door fridge, "because it does not fit into our apartment".

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