Morgan Stanley and Interactive Brokers are being investigated by several federal agencies, including the SEC and FBI, over $100 million in assets allegedly laundered by a former Venezuelan oil minister, according to a new report in the Wall Street Journal.
The report, citing government documents and people familiar with the matter, says the federal inquiry dates back almost a decade and was accelerated by a whistleblower complaint in 2019. Neither Morgan Stanley nor IAB, the largest online brokerage, is currently accused of wrongdoing.
The probe centers around two Venezuelan men who are cousins: businessman Luis Mariano Rodriguez Cabello and former oil minister Rafael Ramírez.
Rodriguez allegedly helped launder $2 billion in illicit funds on behalf of Ramírez, who is accused of stealing the money from Venezuela’s state-owned oil company using inflated contracts.
Investigators want to know why Morgan Stanley and IAB were involved in handling Rodriguez’s possibly dirty money, despite the US having designated Venezuela a high-risk money laundering country over a decade ago.
According to the Journal, Rodriguez wired $108 million to his Morgan Stanley account between 2014 and 2015. A Treasury Department report found that Morgan Stanley suspected the funds were part of a money-laundering scheme, but Rodriguez was still able to move the funds to a different bank in 2017, after Morgan Stanley shut down his account.
Then, in 2018, an associate of Rodriguez moved the money to an IAB account, despite what investigators think were obvious red flags.
Morgan Stanley declined to comment to the Journal. IAB said it was “committed to compliance with all applicable laws and regulations” but couldn’t comment on any specifics.
Two mysterious Iranian Navy ships heading to the Americas are soon expected to enter the Atlantic Ocean, posing a new problem for the Biden administration, Politico reported.
On Saturday, the outlet reported that the US was surveilling IRNS Makran, an oil tanker-turned-staging base, and a Iranian Navy frigate, believed to be headed for Venezuela.
Iran’s intentions are not clear, but a National Security Council spokesperson told Politico that Venezuela had purchased weapons from Iran in the past year.
On Wednesday, US Senator Marco Rubio tweeted that the incursion was an attempt to “project a message of strength to the Biden administration.”
“This has all the markings of delivery on an arms sale (such as fast attack boats) to #Venezuela,” he said.
A US defense official told Politico that the Pentagon had no plans to deploy US Navy ships to meet the Iranian boats.
‘I warn that nobody should make a miscalculation’
Pentagon spokesperson John Kirby said during a press briefing on Tuesday: “I’m not going to speculate about what the Iranian Navy might or might not do,” Politico reported.
Insider contacted the Department of Defense for comment.
On Monday, Iranian Foreign Ministry spokesman Saeed Khatibzadeh said that nations should not jump to conclusions about Iran’s intentions. “Iran has constant presence in international waters is entitled to this right on the basis of international law,” he said, per Iran’s Tasnim News Agency.
“I warn that nobody should make a miscalculation. Those who live in glass houses must be cautious.”
The approaching Iranian vessels pose a new test for the Biden administration
The Trump administration accidentally slapped sanctions on an Italian restaurant and a graphic design studio before the former president left office, The Guardian reported.
On former President Donald Trump’s last day of office, he ordered that sanctions be imposed on a network of Venezuelan oil firms and individuals associated with the state oil company – Petroleos de Venezuela (PDVSA).
However, an unfortunate mistake meant that two Italian business owners, who shared the same name as a man involved in the Venezuelan oil trade, had their businesses targeted in the crackdown.
Alessandro Bazzoni, the owner of a pizzeria in the Italian city of Verona, discovered that his business was placed on a US trade blacklist after visiting his local bank, The Guardian reported.
“When I heard that my current accounts had been blocked, I thought it was a joke,” Bazzoni told Italian newspaper Corriere della Sera. “These are already difficult times for us restaurant owners, the last thing I needed was to have my accounts blocked.”
Bazzoni told the newspaper that he has not received an apology. He said, however, that he is grateful for his name being removed from the sanctions list. “I thank the new American government for the efficiency with which it intervened,” Bazzoni told Corriere della Sera.
Another Italian man, who is also called Alessandro Bazzoni, had his business targeted too. The US Department of the Treasury blacklisted his company, SeriGraphicLab, according to The Guardian.
The Sardinian business owner, who declined to offer comment, confirmed with the paper that his graphic design studio had been on a sanctions list.
The incidents were a case of mistaken identity. The US government was trying to target another Italian citizen who had been a “core facilitator” of a network designed to help PDVSA, The Washington Post reported.
A man from Venezuela seeking asylum in the United States holds his daughter at the entrance to the Paso del Norte International Bridge after the news that the Migrant Protection Protocols program was halted on February 28, 2020, in Ciudad Juárez.
PAUL RATJE/AFP via Getty Images
The Biden administration is granting Temporary Protected Status to Venezuelans.
Venezuelans are the leading group of asylum-seekers. About 320,000 are eligible for TPS.
TPS protects recipients from the threat of deportation.
Venezuelans who have fled economic devastation and political repression will no longer have to fear deportation from the United States, the Biden administration announced Monday, fulfilling one of the president’s campaign promises.
An estimated 320,000 Venezuelans in the US are now eligible for Temporary Protected Status, as first reported by the Los Angeles Times. TPS is granted to nationals from countries where it would be unsafe to return.
Venezuela has been in an economic and political freefall since the collapse of oil prices in 2014, exacerbated by rank corruption and, since 2019, US sanctions on the country’s all-important petroleum sector. That has led to an exodus from the country – 5.4 million people, according to the United Nations, or nearly 20% of its population – with the vast majority settling elsewhere in South America, namely Colombia, Ecuador, and Peru.
But tens of thousands have also made it to the US. Fom fiscal years 2017 to 2019, the Department of Homeland Security reported that Venezuelans were by far the largest group of asylum-seekers, averaging more than 25,000 per year and exceeding the number from Guatemala, Honduras, and El Salvador, combined.
-Aaron Reichlin-Melnick (@ReichlinMelnick) March 8, 2021
In its formal designation, DHS says Venezuelans are receiving protected status due to the “severe economic crisis” back home, as well as “a prolonged political crisis” sparked by President Nicolas Maduro’s disputed victory in the country’s 2018 election and effective dissolution of its democratically elected legislature.
To apply for TPS, Venezuelans will need to pay $135 in fees and another $410 for a work permit, The Miami Herald reported. Those who enter the US on or after March 8 are ineligible.
The announcement comes days after Colombia, home to nearly 2 million Venezuelan migrants, granted those refugees legal status for the next decade.
Juan Escalante, an undocumented immigrant from Venezuela and digital campaigns manager at FWD.us, which advocates for criminal justice and immigration reform, said he was relieved by the news.
“The chaos, turmoil, and political unrest that has consumed my native homeland of Venezuela is heartbreaking,” he said in a statement, “and the idea that more than 300,000 Venezuelans who have been living in and contributing to the US could be deported to a country where their lives and freedoms would be threatened is terrifying.”
While the last administration claimed to support Venezuelans, it continued to deport them back to a country that it publicly condemned as violent and authoritarian. It was only on January 19, a day before leaving office, that the former president offered legal protections to some 94,000 Venezuelans.
“This shows solidarity with the over 5 million Venezuelans that have fled the country,” Geoff Ramsey, director for Venezuela at the Washington Office on Latin America, a DC think tank, told Insider. He urged the administration to “go even further,” however, and pressure its allies in South America to increase social services for the Venezuelan diaspora elsewhere.
“Far too many other countries have backtracked on their commitments to fleeing Venezuelans,” he said.
Venezuelan President Nicolas Maduro at a military exercise in Charallave, Venezuela, February 10, 2019.
Miraflores Palace/Handout via REUTERS
Iran and Venezuela have grown closer in recent years, as both countries seek to counter the intense pressure campaign that the US has mounted against them.
US officials have said that Iran’s military presence in Venezuela is growing and that if Iranian missiles start to arrive in the South American country, then the US could step in.
US officials have watched warming ties between Iran and Venezuela with concern, expressing alarm over what they say are Iran’s military presence in and arms sales to the South American country.
The Trump administration’s special representative for Iran and Venezuela, Elliott Abrams, is the latest to do so, warning this week that the US would act if Iran sends missiles to Venezuela.
“I’ve made one very concrete statement about this: We will not accept, we will not tolerate, the placement in Venezuela of Iranian missiles that can reach the United States,” Abrams said Thursday during a webinar hosted by George Mason University’s National Security Institute.
“We will not accept it, and if they try to do it, at least in this administration, we will try to interdict it, and if they arrive in Venezuela, they will be dealt with in Venezuela. It is not acceptable to have Iranian missiles in Venezuela that can reach the United States,” Abrams added.
Elliot Abrams, US special adviser for Venezuela, takes questions from reporters at the US Embassy in Lisbon, April 9, 2019.
AP Photo/Armando Franca
The Trump administration has mounted an intense campaign to isolate Iran, but as it failed to extend an arms embargo on Tehran this fall, the administration and its allies accused Venezuela of supporting Iran’s malign activity.
During the announcement of more sanctions on Iran in late September, Secretary of State Mike Pompeo accused Venezuelan President Nicolas Maduro of working with Tehran “to flout the UN arms embargo.”
Days later, Sen. Marco Rubio, an influential advisor to Trump on Latin American affairs, said the expiration of that arms embargo in October could lead to Iran “beginning to share weaponry with the Venezuelan military.”
Rubio added that “many options are on the table” to stop such an exchange, including “physical prevention.”
Adm. Craig Faller, who oversees US military operations in the region as head of US Southern Command, expressed similar concerns this week.
“We see growing Iranian influence in [Venezuela] to include the Quds force, which is alarming and concerning, and some weapons ties,” Faller said at a Defense Writers Group event. Quds force is the external arm of Iran’s Islamic Revolutionary Guard Corps.
Faller said the US is concerned about “what we see as the interactions between Iran and Venezuela.”
“It’s not just oil shipments. It’s arms shipments as well,” Faller added. “We have been tracking that. We saw an uptick in that this year. We’re watching the rate of change very carefully to see if it connects to any other Iranian malfeasance around the globe.”
Maduro at a military exercise in Maracaibo, February 6, 2019.
Miraflores Palace/Handout via REUTERS
Iran and Venezuela, both founding members of OPEC, have longstanding ties, aligning as foes of the US. More recently, Iran has supported Venezuela with gasoline, which Venezuela now struggles to produce after years of mismanagement and neglect of its oil industry.
The US seized several Iranian tankers headed to Venezuela earlier this year, which drew warnings about retaliation from Iran. Another flotilla of tankers, the largest Iran has sent so far, is now reportedly on its way to Venezuela.
Venezuela has in the past received or made deals for Iranian military hardware, such as small arms or drones, but experts doubt a deal for weaponry like missiles is likely because of Iran’s reticence about escalation and Venezuela’s lack of funds.
“Venezuela has increased military purchases from Iran in recent years, but there’s no evidence Venezuela is seeking any kind of missiles that could reach the Unites States, from Iran or anyone else,” said Geoff Ramsey, director for Venezuela at the Washington Office on Latin America.
The Trump administration is also seen as unlikely to take military action against Maduro because of the complexity involved and because of Trump’s seeming aversion to large-scale military confrontations.
Asked on Thursday if he was suggesting “a potential Cuban Missile-style crisis” with Iranian missiles in Venezuela, Abrams said no, arguing his comments would help prevent that.
“We’re not going to tolerate it, and I think that making that statement flatly and clearly will serve as an adequate deterrent, and we will never face that,” Abrams said.
Venezuelan lawmaker Juan Guaidó takes the oath of office as president of the National Assembly in Caracas, January 5, 2019.
Fernando Llano, File/AP Photo
President-elect Joe Biden isn’t likely to make a dramatic shift when it comes to dealing with Maduro, but his election, and leadership changes in Congress, suggests there will be a move away from Trump’s hardline approach.
But Abrams, citing his interactions with some Democratic lawmakers, said Thursday that there had been broad agreement on Trump’s handling of the crisis in the South American country.
“Venezuela policy has been remarkably bipartisan in the last four years,” Abrams said. “When [opposition leader] Juan Guaidó was invited to the State of Union … he stood up in the balcony, everybody rose and applauded, and right behind [Trump] was Nancy Pelosi doing it, so it’s been a bipartisan policy.”
Ramsey said the US has “truly hit maximum pressure” on Venezuela and that its “options are limited at this point.”
“The Trump administration has isolated the Maduro regime in every conceivable forum and sanctioned everything in Venezuela except oxygen,” Ramsey told Insider. “At some point the US government is going to have to look at the massive leverage it has given itself in Venezuela and be realistic about what can honestly be achieved toward the goal of advancing a peaceful, democratic solution.”
