Ex-BrokerDealer Earns 3 Yr Jail Sentence for Bribe Plot

brokerdealer jail

Law360, New York (December 15, 2015, 6:16 PM ET) — A former employee of New York broker-dealer Direct Access Partners LLC was sentenced in federal court on Tuesday to three years in prison for his role in a $60 million bribery scheme involving a Venezuelan state-owned bank.

U.S. District Judge Denise Cote sentenced Jose Alejandro Hurtado during a hearing in Manhattan court. Hurtado pled guilty in August 2013 to violating the Foreign Corrupt Practices Act, money laundering and obstruction of justice, among other criminal charges.

Prosecutors have said Hurtado and others at DAP funneled millions of dollars in bribe payments to a senior official at Banco de Desarrollo Economico y Social de Venezuela, or BANDES, in exchange for bond-trading business. Hurtado personally received about $11.9 million in profits from the scheme, according to prosecutors.

Hurtado, one of six people charged in the case, will receive credit for the nearly 17 months he spent in prison following his arrest. Direct Access Partners ceased operations in May of 2013 after the criminal charges and a related SEC suit. It was forced into bankruptcy by creditors on May 30.

“I’m here to apologize about this terrible situation and the pain I have caused everyone,” he said prior to the sentence, fighting back tears. “My behavior gave a terrible reputation to the financial industry and to future generations.”

The other DAP officers and employees who were charged in the case are Benito Chinea, Joseph Demeneses, Ernesto Lujan and Tomas Alberto Clarke Bethancourt.

All of the defendants have pled guilty. Chinea and Demeneses were each sentenced to four years in prison, Lujan and Bethancourt were each sentenced to two years in prison, and Gonzalez is scheduled to be sentenced Jan. 15.

For the full story from 360Law, please click here

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


Brokerdealer.com 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.