February 13, 2019 / 3:35 PM / 3 months ago

Exclusive: FBI investigating top Vitol executives in Americas - sources

RIO DE JANEIRO/HOUSTON (Reuters) - The FBI is investigating energy trading firm Vitol’s top two executives in the Americas in connection with a Brazil bribery case, two sources with direct knowledge of the matter said, deepening the U.S. role in a probe of foreign oil firms’ dealings with state-controlled Petrobras.

An exterior view of the Vitol Group trading commodities company building is pictured in Geneva October 4, 2011. REUTERS/Denis Balibouse/Files

The FBI’s targeting of the Vitol executives is the second recent sign that U.S. authorities are stepping up their involvement in the trading fraud case, the latest twist in Brazil’s sweeping “Car Wash” corruption probe.

That significantly increases dangers for Vitol, the world’s largest independent oil trader, and other major trading firms like Trafigura and Glencore, also ensnared in the case.

Miguel “Mike” Loya, Vitol’s U.S. head, and Antonio Maarraoui, the company’s head for Latin American and the Caribbean, are under investigation by the U.S. law enforcement agency, the sources told Reuters, speaking on condition of anonymity.

Vitol said it has a zero tolerance policy for bribery and corruption. Trafigura and Glencore have declined to comment on the U.S. investigation, with the latter reiterating past statements that it is cooperating with Brazilian authorities. Trafigura said it takes the allegations seriously.

All of the companies have been suspended from business dealings with Petroleo Brasileiro SA since Brazilian prosecutors accused the three trading firms in December of paying more than $30 million in bribes to its employees.

Petrobras declined to comment specifically on any FBI involvement, but said in an email that it remains committed to cooperating with investigators. The company previously said it was a victim of the alleged scheme.

U.S. prosecutors and their Brazilian counterparts have worked together on Car Wash cases in the past, including on forcing Brazil construction conglomerate Odebrecht to pay a record $2.6 billion fine in a 2016 leniency deal.

‘KNOWINGLY’ INVOLVED

Loya and Maarraoui, both Houston-based, have not been charged in Brazil. They also have not been charged in the United States and it is unclear whether the U.S. Justice Department will bring charges.

Neither Loya nor Maarraoui responded to requests for comment via email.

Brazilian prosecutors previously said Loya and Maarraoui “knowingly and voluntarily” arranged to bribe Petrobras employees using middlemen with whom the pair had direct.

A Brazil federal police investigation includes several emails between Loya, Maarraoui and a group of middlemen, along with personal meetings, which often took place in Houston.

Brazil prosecutors have said Loya and Maarraoui arranged for the middlemen to move illicit funds through U.S., European and offshore bank accounts. That money that was funnelled to Petrobras employees, who in turn gave Vitol sweetheart deals on massive trades involving petroleum derivatives and fuel storage, they said.

Loya, part of a large and successful family in the energy business, joined Vitol as a trader in 1992 and became president of its Americas operation in 1999. He was considered to be in the running to lead the parent company a year ago.

Coming from modest means in El Paso, Texas, Loya graduated from the University of Texas at El Paso and got his MBA at Harvard. He played rugby in college and now co-owns the SaberCats, a Major League Rugby team in Houston.

BIG TARGETS

The European firms - Vitol is based in London, the two others in Switzerland - are powerhouses in commodities trading and are by far the largest firms yet caught up in the Car Wash probe.

They have investments in strategic energy and commodity infrastructure around the world including Brazil. Together they control about 10 percent of the world’s daily oil consumption and have revenues larger than Argentina’s gross domestic product.

John Marzulli, a spokesman for U.S. Attorney for the Eastern District of New York Richard Donoghue, declined to confirm or deny that an investigation into the men is underway by the office. The FBI’s media relations office said by email that it “neither confirms nor denies the existence of investigations.”

Last week, Reuters reported that the U.S. Justice Department was investigating a former U.S.-based oil trader for Petrobras who already is charged in Brazil with taking part in the alleged corruption scheme involving commodity companies Vitol, Glencore Plc and Trafigura AG.

A sign is pictured in front of the Vitol Group trading commodities building in Geneva October 4, 2011. REUTERS/Denis Balibouse/Files

The trader, Rodrigo Garcia Berkowitz, 39, is cooperating with U.S. authorities in the investigation and may face charges in the United States, sources said.

Brazilian prosecutors have followed a pattern of first charging less important figures in schemes, then flipping them to turn state’s witness and testify against more powerful figures.

The Car Wash investigations began in 2014 when a money laundering scheme was discovered at a gas station in the Brazilian capital Brasilia, leading to black market money dealers’ links to top executives at Petrobras. It is the first major push against corruption and impunity for the rich and powerful in Brazil, and has profoundly shaken the political and business communities in Latin America’s biggest economy.

Reporting by Brad Brooks in Rio de Janeiro and Gary McWilliams in Houston; Additional reporting by Julia Payne in Geneva; Editing by Will Dunham and Chris Plumb

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