Citgo sues Miami firm over millions lost in Venezuela fraud

Full Screen
1 / 2

Copyright 2020 The Associated Press. All rights reserved.

FILE - In this March 4, 2020 file photo, opposition leader Juan Guaido listens during a legislative session being held at a religious, private school in Caracas, Venezuela, an alternative location due to the government continuously blocking their access to National Assembly chambers. Guaid said Monday, May 11, 2020 that two U.S.-based political advisers have resigned following a failed incursion into Venezuela aimed at capturing President Nicols Maduro. (AP Photo/Ariana Cubillos, File)

MIAMI – When the U.S. recognized Venezuelan opposition leader Juan Guaidó as the nation's rightful leader last year it did more than just trigger a bitter feud with socialist leader Nicolás Maduro. Increasingly, it's also unleashing a torrent of lawsuits.

The latest came Tuesday, when the Guaidó-appointed board of Citgo, the U.S. subsidiary of Venezuela's state oil company, filed a lawsuit in federal court in Houston against a former contractor seeking to recover millions of dollars in damages.

The lawsuit accuses José Manuel González and his Miami-based Petroleum Logistics Service Corp. of providing gifts including cash, jewelry, private artwork, chartered flights and even a handpicked Houston apartment to senior executives at Citgo. In exchange, officials paid González $20 million between 2014 and 2018 to provide goods and services to Citgo's parent company, PDVSA, at inflated prices.

"Citgo lost millions of dollars as a result," the lawsuit alleges.

The lawsuit follows a similar complaint filed by Citgo two weeks ago against former Miami congressman David Rivera for allegedly breaking a $50 million consulting contract with PDVSA. The company has also sought a U.S. court order blocking bondholders from exercising collateral rights over the state-owned refiner and invalidating $1.7 billion in debt.

Both lawsuits highlight the increasingly tight relationship between Guaidó and the U.S. Justice Department. As attorneys for the new Citgo board, under subpoena, sift through internal documents trying to get a handle on the company's legal vulnerabilities it's found common cause with prosecutors targeting vast corruption in Venezuela's bankrupt petroleum industry. To date, 28 individuals have been charged as part of the ongoing probe by prosecutors in Houston, Miami and Washington.

Among the many who have pleaded guilty is González, who was arrested arriving to Miami International Airport in 2018 on charges of paying $629,000 in bribes to the former general manager of Bariven, PDVSA’s procurement subsidiary. In pleading guilty to one count of conspiring to violate the Foreign Corrupt Practices Act, González also admitted to funneling kickbacks to officials at PDVSA and Citgo.

The latest lawsuit, reflecting the evidence presented in the criminal complaint against González, does not name the five Citgo officials who allegedly took bribes. But all of them were members of a special department charged with procurement efforts on behalf of PDVSA.