(Bloomberg) -- A private banker who until last month was one of Julius Baer Group Ltd.’s wealth managers for Venezuela has been arrested for his alleged role in a billion-dollar scheme to launder funds from the nation’s state oil company PDVSA.
Matthias Krull, a German citizen, was charged for his alleged role in using Florida real estate and false-investment schemes to launder money stolen from PDVSA, the U.S. Justice Department said on Wednesday.
Authorities in the U.S. and Switzerland are probing how billions of dollars were embezzled from PDVSA, or Petroleos de Venezuela SA as it is formally known. Switzerland in 2016 seized $118 million in bank assets linked to a Venezuelan businessman who has admitted to bribing PDVSA officials to steer about $1 billion in energy-supply contracts.
A Colombian national wanted on the same charges as Krull was arrested Wednesday and six suspects from Venezuela, Portugal and Uruguay remain at large, the DoJ said.
The conspiracy began in 2014 with a currency exchange scheme crafted to divert $600 million from PDVSA obtained from bribery and fraud, according to the DoJ. By May of 2015, the “conspiracy had doubled in amount to $1.2 billion embezzled from PDVSA,” reads its July 25 complaint.
Swiss financial regulator Finma opened an enforcement proceeding against Julius Baer, Swiss newspaper NZZ reported in April. Finma said it’s aware of the arrest and is in contact with the bank. It also confirmed it has a number of enforcement proceedings related to money laundering in South America under way and some of them are tied to PDVSA. It declined to name the targets of its probes.
Krull, 44, was arrested on Tuesday night in Miami and made an initial court appearance on Wednesday. He is scheduled to have a pretrial detention hearing on July 30, and a preliminary hearing on Aug. 8. Oscar Rodriguez, his Miami lawyer, declined to comment, saying it was too early in the proceedings.
The German banker was a senior relationship manager at Julius Baer based in Panama at the time of the alleged money laundering. Just weeks ago Julius Baer said some bankers had left amid a strategic realignment of Baer’s Latin American unit. The exits from Switzerland’s third-biggest wealth manager included Krull, Bloomberg reported.
Geneva-based rival Gonet & Cie has since announced that it hired Krull. Pascal Pupet, a spokesman for the bank said Krull has not joined Gonet yet and was due to do so at the end of the year.
--With assistance from Jan-Henrik Förster.
To contact the reporters on this story: Patrick Winters in Zurich at firstname.lastname@example.org;Hugo Miller in Geneva at email@example.com
To contact the editors responsible for this story: Dale Crofts at firstname.lastname@example.org, Jan Dahinten, Anthony Aarons
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