BrokerDealer Crime Beat-Brokerage Execs Plead Guilty in Bond Bribery Deal

white-collar-crime blog update profiles brokerdealer firm, Direct Access Partners, pleading guilty after a scheme to bribe an offical at a Venezuelan development bank for more business. This update is courtesy of Traders Magazine article, “Former Direct Access Partners Execs Sentenced in Bribery Scheme“, with an excerpt below.

Two former top executives with institutional brokerage Direct Access Partners, a firm that shut down in December of 2013 after its clearing firm, Goldman Sachs, stopped clearing its trades, have opted to plead guilty for indiscretions regarding its bond trading business.

DAP’s former chief executive, Benito Chinea, and former managing director, Joseph Demeneses, each pleaded guilty one count of conspiracy to violate the FCPA and the Travel Act in connection with a scheme to bribe an official at a Venezuelan development bank, Banco de Desarollo Economico y Social de Venezuela (BANDES), in exchange for the official’s directing BANDES’ trading business to DAP.

Chinea, of Manalapan, New Jersey, and Joseph DeMeneses, of Fairfield, Connecticut, were each sentenced to four years in prison. They were also ordered to pay $3,636,432 and $2,670,612 in forfeiture, respectively, which amounts represent their earnings from the bribery scheme.

“These Wall Street executives orchestrated a massive bribery scheme with a corrupt official in Venezuela to illegally secure tens of millions of dollars in business for their firm,” Assistant Attorney General Caldwell said in a media statement. “The convictions and prison sentences of the CEO and Managing Director of a sophisticated Wall Street broker-dealer demonstrate that the Department of Justice will hold individuals accountable for violations of the FCPA and will pursue executives no matter where they are on the corporate ladder.”

Three other DAP employees and the BANDES official pleaded guilty last year for their participation in the bond trading matter.

DAP itself filed for bankruptcy.

New York-based Direct Access Partners started out in 2002 as a New York Stock Exchange floor brokerage and grew rapidly over the years in both equities and fixed income. Sources tell Traders the firm has 130 employees.

To read the entire article from Traders Magazine, click here.

BrokerDealers Plead Guilty to Bribery blog update courtesy of Reuters.

Two Brokerdealer executives based out of New York have plead guilty to being a part of a Venezuelan bribery scheme.

c40cd2c24ec2908a36d325e671e2Two former executives of a defunct New York broker-dealer pleaded guilty on Wednesday to charges stemming from their involvement in a foreign bribery scheme involving their employer and a Venezuelan state economic development bank.

Benito Chinea, the former chief executive of Direct Access Partners LLC, and Joseph Demeneses, a onetime managing director at the firm, each pleaded guilty to a conspiracy count in federal court in Manhattan.

Chinea, 48, admitted that in 2011 discussed how to make a bribe payment to the head trader at state-owned Banco de Desarrollo Económico y Social de Venezuela, known as Bandes.

“I knew it was improper and wrong and in violation of U.S. laws to make an agreement with others to make a bribe payment,” he said.

The pleas by Chinea and Demeneses, 46, were the latest to stem from a broad U.S. investigation into foreign bribery involving Direct Access Partners and Venezuelan state economic development banks.

Prosecutors said the men participated in a scheme from 2008 through 2012 involving payments to the head trader and senior official at Bandes, Maria de los Angeles Gonzalez de Hernandez.

Prosecutors have previously said the kickback scheme generated more than $60 million in fees for Direct Access through the bond trading business Gonzalez directed to the firm in exchange for $5 million in kickbacks.

Direct Access’s parent company filed for bankruptcy after charges were first unveiled in May 2013.

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