Orlando Castro Llanes
Encyclopedia
Orlando Castro Llanes is a Venezuela
n businessman whose
financial empire of banks and insurance
agencies collapsed in 1994 and was subsequently convicted and imprisoned in the United States
.
, Cuba
, in 1925, and became active in politics. He was head of a wing of Cuba’s Communist Party
until after the 1959 Cuban Revolution
, when he allegedly quarrelled with Fidel Castro
and left the country.
He moved to Venezuela, where he became an insurance salesman. He was successful at this, and rose to control a conglomerate of insurance companies, banks, real estate, and radio stations and newspapers. He was reputed to be one of the wealthiest men in Venezuela. His Grupo Impresas Latinamericanos included the Banco Progreso in Venezuela, the Banco Progreso de Internacional de Puerto Rico, and the Banco Latinamericano in the Dominican Republic
.
(BdV), a bastion of Caracas's old-money elite, and tried to get on its board of director. However, according to Castro, he was never accepted in exclusive political and economic circles and was considered unfit by the Venezuelan elite to lead the country’s most important banking institution. At a stockholders' meeting, when Castro wanted a seat on the board, BdV's chairman suspended the meeting and muffled Castro's protest by shutting off his microphone.
Castro now attempted a hostile takeover of BdV, which was bitterly contested by BdV's management. He worked through his subsidiary Grupo Progreso Latinoamericano, supported by Banco Consolidado of José Alvarez Stelling, and Grupo del Banco Unión.
A small group of shareholders, all members of the Caracas Country Club, joined with the Banco Provincial, the powerful industrial group Grupo Polar
, and Finalven to oppose the takeover. BdV hired Thor Halvorssen Hellum
, Special Commissioner for International Narcotic Affairs in the administration of President Carlos Andrés Pérez
, to investigate rumors of money laundering
by Castro.
Halvorssen concluded that Castro was laundering drug money and was involved in other financial irregularities. He gave his information to friendly members of the Venezualan Congress, who had parliamentary immunity. Castro’s allies started a media campaign to discredit Halvorssen.
froze Banco Progreso accounts at Bank of America International in New York
.
Castro employed his business associate Charles Intriago to counter the allegations. Intriago was Castro’s principal legal advisors on matters related to the United States. Castro Llanes had provided US$80,000 in start-up capital for Intriago’s newsletter Money Laundering Alert. Intriago eventually got US Customs to release the accounts.
Intriago used his government connections to purge law enforcement files of information linking Castro Llanes to drug trafficking. He hired former US officials and investigators, who between 1991 and 1995 approached several different US government agencies for information. They eventually obtained DEA's intelligence files on Castro Llanes, and the names of at least four confidential informants against Castro Llanes for Customs. A former IRS
agent working for Intriago found that some US$4 billion had passed through a Castro account in New York. He gave this information to US Customs agents and was fired by Intriago. New York District Attorney Robert Morgenthau linked Castro to 3,500 offshore corporations in Aruba
, Curaçao
, and elsewhere. The US$4 billion was never tied definitively to drug trafficking.
On the instigation of Intriago – who was a Democratic National Committee
trustee – Castro contributed US$50,000 to the Democratic Party
. He attended the January 1993 inauguration of US President Clinton
and received red carpet treatment from the Clinton Administration. The donation was reimbursed by one of Castro's Venezuelan companies, making the contributions illegal under US law.
, the second largest bank in the country. Castro's enterprises also failed.
Castro fled to the US and settled in Miami. Venezuelan banking regulators seized Banco Progreso in December 1994. Castro was later charged in absentia by the Venezuelan government with bank fraud, embezzlement, and conspiracy. Banco Progreso losses neared US$2.2 billion and dragged down three more banks controlled by Castro.
On April 4, 1996, Castro was indicted in New York by District Attorney Morgenthau, along with his son, Orlando Castro Castro, and grandson Jorge Castro Barredo, on charges of a scheme to defraud in the first degree. The three Castros were convicted on grand larceny charges on February 19, 1997. In April of that year he was sentenced to a term of one to three years in prison. The larceny was defrauding depositors of Banco Progreso International de Puerto Rico of as much as US$55 million. His crime also cost the government of Venezuela more than US$8 million.
Castro Llanes served 25 months in prison, then voluntarily returned to Venezuela. In 2007, Castro convicted of criminal libel against Miguel Henrique Otero, the director of newspaper El Nacional
He was sentenced to two months imprisonemt. However, by Venezuelan laws, he was granted parole for being older than 65 years.
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...
n businessman whose
financial empire of banks and insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
agencies collapsed in 1994 and was subsequently convicted and imprisoned in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
From Communist to capitalist
He was born in HavanaHavana
Havana is the capital city, province, major port, and leading commercial centre of Cuba. The city proper has a population of 2.1 million inhabitants, and it spans a total of — making it the largest city in the Caribbean region, and the most populous...
, Cuba
Cuba
The Republic of Cuba is an island nation in the Caribbean. The nation of Cuba consists of the main island of Cuba, the Isla de la Juventud, and several archipelagos. Havana is the largest city in Cuba and the country's capital. Santiago de Cuba is the second largest city...
, in 1925, and became active in politics. He was head of a wing of Cuba’s Communist Party
Communism
Communism is a social, political and economic ideology that aims at the establishment of a classless, moneyless, revolutionary and stateless socialist society structured upon common ownership of the means of production...
until after the 1959 Cuban Revolution
Cuban Revolution
The Cuban Revolution was an armed revolt by Fidel Castro's 26th of July Movement against the regime of Cuban dictator Fulgencio Batista between 1953 and 1959. Batista was finally ousted on 1 January 1959, and was replaced by a revolutionary government led by Castro...
, when he allegedly quarrelled with Fidel Castro
Fidel Castro
Fidel Alejandro Castro Ruz is a Cuban revolutionary and politician, having held the position of Prime Minister of Cuba from 1959 to 1976, and then President from 1976 to 2008. He also served as the First Secretary of the Communist Party of Cuba from the party's foundation in 1961 until 2011...
and left the country.
He moved to Venezuela, where he became an insurance salesman. He was successful at this, and rose to control a conglomerate of insurance companies, banks, real estate, and radio stations and newspapers. He was reputed to be one of the wealthiest men in Venezuela. His Grupo Impresas Latinamericanos included the Banco Progreso in Venezuela, the Banco Progreso de Internacional de Puerto Rico, and the Banco Latinamericano in the Dominican Republic
Dominican Republic
The Dominican Republic is a nation on the island of La Hispaniola, part of the Greater Antilles archipelago in the Caribbean region. The western third of the island is occupied by the nation of Haiti, making Hispaniola one of two Caribbean islands that are shared by two countries...
.
The fight over Banco de Venezuela
In 1990, he bought a large block of shares in the prestigious Banco de VenezuelaBanco de Venezuela
Banco de Venezuela is an international universal bank based in Caracas. It was the market leader in Venezuela until 2007, when it fell to third place, with an 11.3% market share for deposits; its major competitors are Banesco, Banco Mercantil and BBVA Banco Provincial...
(BdV), a bastion of Caracas's old-money elite, and tried to get on its board of director. However, according to Castro, he was never accepted in exclusive political and economic circles and was considered unfit by the Venezuelan elite to lead the country’s most important banking institution. At a stockholders' meeting, when Castro wanted a seat on the board, BdV's chairman suspended the meeting and muffled Castro's protest by shutting off his microphone.
Castro now attempted a hostile takeover of BdV, which was bitterly contested by BdV's management. He worked through his subsidiary Grupo Progreso Latinoamericano, supported by Banco Consolidado of José Alvarez Stelling, and Grupo del Banco Unión.
A small group of shareholders, all members of the Caracas Country Club, joined with the Banco Provincial, the powerful industrial group Grupo Polar
Empresas Polar
Empresas Polar is a Venezuelan corporation, that started as a brewery founded in 1941 by Lorenzo Alejandro Mendoza Fleury in Antímano, Caracas. It is the largest and best known brewery in Venezuela, but has since long diversified to an array of industries, mostly related to food processing and...
, and Finalven to oppose the takeover. BdV hired Thor Halvorssen Hellum
Thor Halvorssen Hellum
Thor Halvorssen Hellum —commonly known as Thor Halvorssen—is a Venezuelan-Norwegian businessman who served as CEO and President of the Venezuelan state-owned telephone company, CANTV and later as Special Commissioner for International Narcotic Affairs in the administration of President Carlos...
, Special Commissioner for International Narcotic Affairs in the administration of President Carlos Andrés Pérez
Carlos Andrés Pérez
Carlos Andrés Pérez Rodríguez , also known as CAP and often referred to as El Gocho , was a Venezuelan politician, President of Venezuela from 1974 to 1979 and again from 1989 to 1993. His first presidency was known as the Saudi Venezuela due to its economic and social prosperity thanks to...
, to investigate rumors of money laundering
Money laundering
Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources. The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount...
by Castro.
Halvorssen concluded that Castro was laundering drug money and was involved in other financial irregularities. He gave his information to friendly members of the Venezualan Congress, who had parliamentary immunity. Castro’s allies started a media campaign to discredit Halvorssen.
Money laundering accusations
In March 1991, after the allegations of money laundering were made public, the US Customs ServiceUnited States Customs Service
Until March 2003, the United States Customs Service was an agency of the U.S. federal government that collected import tariffs and performed other selected border security duties.Before it was rolled into form part of the U.S...
froze Banco Progreso accounts at Bank of America International in New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
.
Castro employed his business associate Charles Intriago to counter the allegations. Intriago was Castro’s principal legal advisors on matters related to the United States. Castro Llanes had provided US$80,000 in start-up capital for Intriago’s newsletter Money Laundering Alert. Intriago eventually got US Customs to release the accounts.
Intriago used his government connections to purge law enforcement files of information linking Castro Llanes to drug trafficking. He hired former US officials and investigators, who between 1991 and 1995 approached several different US government agencies for information. They eventually obtained DEA's intelligence files on Castro Llanes, and the names of at least four confidential informants against Castro Llanes for Customs. A former IRS
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
agent working for Intriago found that some US$4 billion had passed through a Castro account in New York. He gave this information to US Customs agents and was fired by Intriago. New York District Attorney Robert Morgenthau linked Castro to 3,500 offshore corporations in Aruba
Aruba
Aruba is a 33 km-long island of the Lesser Antilles in the southern Caribbean Sea, located 27 km north of the coast of Venezuela and 130 km east of Guajira Peninsula...
, Curaçao
Curaçao
Curaçao is an island in the southern Caribbean Sea, off the Venezuelan coast. The Country of Curaçao , which includes the main island plus the small, uninhabited island of Klein Curaçao , is a constituent country of the Kingdom of the Netherlands...
, and elsewhere. The US$4 billion was never tied definitively to drug trafficking.
On the instigation of Intriago – who was a Democratic National Committee
Democratic National Committee
The Democratic National Committee is the principal organization governing the United States Democratic Party on a day to day basis. While it is responsible for overseeing the process of writing a platform every four years, the DNC's central focus is on campaign and political activity in support...
trustee – Castro contributed US$50,000 to the Democratic Party
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...
. He attended the January 1993 inauguration of US President Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
and received red carpet treatment from the Clinton Administration. The donation was reimbursed by one of Castro's Venezuelan companies, making the contributions illegal under US law.
US conviction and imprisonment
In 1994, the Venezuelan banking system collapsed – after the breakdown of President Perez’s regime in 1993 and the failure of Banco LatinoBanco Latino
Banco Latino was a Venezuelan bank based in Caracas, and at the time of its 1994 failure was the country's second largest. It had a good relationship with the government, such that ministries moved their accounts to the bank, and the army and the state-owned oil company PDVSA entrusted their...
, the second largest bank in the country. Castro's enterprises also failed.
Castro fled to the US and settled in Miami. Venezuelan banking regulators seized Banco Progreso in December 1994. Castro was later charged in absentia by the Venezuelan government with bank fraud, embezzlement, and conspiracy. Banco Progreso losses neared US$2.2 billion and dragged down three more banks controlled by Castro.
On April 4, 1996, Castro was indicted in New York by District Attorney Morgenthau, along with his son, Orlando Castro Castro, and grandson Jorge Castro Barredo, on charges of a scheme to defraud in the first degree. The three Castros were convicted on grand larceny charges on February 19, 1997. In April of that year he was sentenced to a term of one to three years in prison. The larceny was defrauding depositors of Banco Progreso International de Puerto Rico of as much as US$55 million. His crime also cost the government of Venezuela more than US$8 million.
Castro Llanes served 25 months in prison, then voluntarily returned to Venezuela. In 2007, Castro convicted of criminal libel against Miguel Henrique Otero, the director of newspaper El Nacional
El Nacional
El Nacional is a Venezuelan publishing company under the name C.A. Editorial El Nacional, most widely known for its El Nacional newspaper. It, along with Últimas Noticias and El Universal, are the most widely read and circulated daily national newspapers in the country, and it has an average of...
He was sentenced to two months imprisonemt. However, by Venezuelan laws, he was granted parole for being older than 65 years.
External links
- Index of articles, Orlando Castro Llanes, Ashenoff and Associates, Inc.
- The New York criminal case of Orlando Castro Llanos, Ashenoff and Associates, Inc.