Venezuelan forex sting operation
Rosemont Finance Corp is a Miami based Money Services Business (MSB) that acts as a clearing house for casa de cambios in Venezuela. Rosemont controls a bank account with Bank of America widely used for unofficial foreign exchange transactions; US dollar versus Venezuelan bolivars. Rosemont’s account was frozen by US authorities after is was linked to suspicious activity and money laundering. This freeze more or less led to a stop in the USD/Bolivar parallel exchange circuit and may have caused a shortage in US dollars in Venezuela. The Venezuelan government of President Hugo Chavez fixes the bolivar at 2.15 per dollar. On the parallel market, the dollar now trades near 6 bolivars. This spread in exchange rate is seen as a reflection of the political risk of doing business in Venezuela. Rosemont commented that just a small number of transactions was targeted by investigators. Allegedly one of the founders of the company, Vyasulu, was engaged in wiring almost a million dollars from Boston to Miami, whilst undercover law enforcement agents told him the money was generated by drug trafficking. Generally this is not a situation you want to be in. The available data do not reveal exactly why Vyasulu was targeted in the first place, but usually law enforcement starts such an operation when there is some suspicion that you may be involved in shady business to start with. The fact that US authorities decided to “sting” an MSB owner who acted as a key player in the Venezuelan parallel market suggests the Department of Justice may be out to publicly prove the illicit nature (or criminogenic environment) of the ’Black Market Peso Exchange’ and its US-based participants.
