Post by anenro on Aug 28, 2023 20:49:57 GMT 4
The Joker Broker: Doing Business with the World’s Foremost Vendor of Nonexistent Oil
Francisco Javier González Álvarez’s life is shrouded in secrecy, but we know this: He was born December 3, 1949, in La Laguna, in the Canary Islands, off of Spain. The next 45 years are a bit of a blank—nothing to indicate he would become the world’s...
Arturo Díaz Jr. needed a buyer. He had turned 1,000 acres of his family’s Puerto Rico waterfront into a luxury housing development called Coco Beach, but the real estate bubble had burst, and the banks were on his case. At 91, having led a successful career in construction, he was ready to be rid of his share of the $200 million white elephant. So, when a friend named Miguel Lausell said he was working with a billionaire who might want to buy, Díaz was ready to talk.
Lausell was an old acquaintance, and his reputation was solid: Harvard Law, a former phone company president, a Democratic Party fundraiser. He was working for an oil-trading start-up, Madasi Oil, representing a much larger Aruban oil company called Arevenca. So Lausell and his partner, Marcos Da Silva, the CEO of Madasi, met with Díaz. They said the president of Arevenca, a billionaire named Francisco Javier González Álvarez, was interested in the property. Díaz called for his helicopter and gave the Madasi partners a tour.
While Díaz was focused on real estate, Lausell was pushing another offer. Díaz’s main business was Betteroads Asphalt, a paving contractor. Lausell wanted to know whether Betteroads wanted 100,000 barrels of asphalt from Arevenca. At $88 a barrel—well below the market price of about $100—it was a steal. While he waited to work out the details of the property sale, Díaz bargained down the price and prepared to pony up $7.8 million for a tanker of Trinidadian tar.
Díaz liked the idea of building a relationship with someone who could pay $300 million for his share of Coco Beach, so he ignored the various warning signs surrounding the asphalt deal—the fact, for example, that Arevenca wanted the money wired in cash to a numbered Swiss bank account, a practice more common once a relationship is already established. Another warning sign: Arevenca wasn’t a familiar name. But Díaz didn’t imagine Lausell would steer him wrong.
In July, Díaz’s company, Betteroads, wired $2 million. An additional $5.8 million followed in August.
The tanker never arrived.
By September, Díaz knew something was seriously wrong. Betteroads went to the law, but no one was arrested. After a year of discussions, Betteroads sued Madasi and Arevenca in Puerto Rico. This year, Betteroads has pursued criminal charges in Spain. But the Díaz family has yet to recover a cent, and likely never will. (Madasi is also suing Arevenca in US court.)
Arevenca, it turns out, was a sophisticated version of what some traders call a “joker broker.” They are all over the web, offering, say, the entire world’s production of jet fuel or Russian diesel, at a discount—call now! With each con running to the millions of dollars, it only takes one successful job to pay for years of effort. It’s low-risk work. In a dozen interviews I conducted with the FBI, money-laundering experts, oil traders, and industry executives, no one could identify a US prosecution for sales of nonexistent oil products. Few victims go public, fearing the stigma of looking like a sucker. There are enough victims to feed a vast ecosystem of joker brokers, in which Díaz had come up against perhaps the king of them all: Arevenca’s founder, Francisco Javier González Álvarez.
Francisco Javier González Álvarez’s life is shrouded in secrecy, but we know this: He was born December 3, 1949, in La Laguna, in the Canary Islands, off of Spain. The next 45 years are a bit of a blank, and González declined repeated interview requests. Former confidants offer little about his past, other than that he was married at least once. He had at least two kids. Nothing to indicate he would become the world’s foremost vendor of nonexistent oil.
The paper trail of his shady dealings starts in Venezuela in 1994, when he was 44. That’s when he registered a gravel company called Arenera de Venezuela, CA. That’s Arevenca for short.
One of González’s first dubious projects was when he told people he would build the San Francisco Javier port complex on Venezuela’s Caribbean coast. Court records show that he said it would include 800 warehouses, a five-star hotel, a mall, and a heliport. Construction would cost $1 billion. A contractor started to clear land, but the state halted work for lack of permits. The contractor has been in court since 2001, trying to collect on its bill.
Big dreams stymied, González appears to have gone for small-time cheats. In 2004, an American sued to recover two Venezuelan ranches he had sold González after payment never arrived. A helicopter pilot, a renovation contractor, and a lawyer all sued González for unpaid bills.
Then, out of nowhere, González was calling Arevenca an oil company. In 2006, González allegedly made himself out to be an agent for Venezuela’s state oil firm and sold cargoes of diesel to a Nigerian company.
Most legit oil trades are like buying a home—two sides agree on a price. The buyer puts the money in a sort of escrow and sends out inspectors. Once the oil is delivered, the money moves. A buyer who wires cash up front to a new vendor is asking for problems.
Like Díaz, that’s what the Nigerians did. Like him, they had reason to trust: They would later claim that the Venezuelan embassy itself told them to work with Arevenca. As with Díaz, the oil never arrived. The Nigerians sued for $600 million in New York but never served Arevenca. The other defendant, Venezuela’s state oil company, got the case dismissed in August.
Then, in 2009, González went to the West African country of Côte d’Ivoire and promised to build the world’s biggest oil refinery on the Ivorian coast. Arevenca’s shady record was still buried in court documents. Unsuspecting local reporters covered the news. Global financial outlets Bloomberg and Economist Intelligence Unit ran with the story. The news coverage, portraying Arevenca as a legitimate business, gave the company an aura of respectability.
González has never been convicted, though he is facing criminal charges in Spain over the Betteroads affair. But the law is a weak counterweight to his sales prowess.
Like small-time email scammers offering a Nigerian royal fortune, González dazzles his marks with promises of wealth. Make this little deal now and get a big payoff down the road. He pursues those who need something. Maybe he can offer it himself, or maybe they’re impressed by the politicians González eagerly poses with in photos. He adds legitimacy with an impression of panache: fancy cars, a sleek website, favorable press. He’ll provide bank recommendations if pressed, but that’s rarely needed. And when it is, those recommendations may be fake.
Suhey Villadiego fell for it. When González showed up on the Caribbean island of Curaçao in 2009, she was hired to work as a sort of unpaid assistant. She was already in the brokerage game herself and wanted to learn from González’s methods: She said she had previously done oil deals involving off-market Venezuelan crude. To go big-time, she needed a line of credit so she could buy and sell cargoes of fuel—or at least pretend to.
As González negotiated to purchase an old, filthy oil refinery from the Curaçaoan government, he bought his 22-year-old girlfriend a Cartier watch. But when it was time to pay for the refinery, he offered only a fake letter of credit, Villadiego told me in an interview last year. Another time, he sought to withdraw a $200 million false wire transfer from a Curaçaoan bank. The bank managers didn’t fall for the pressure, she said.
Villadiego wasn’t so lucky. She loaned Arevenca $70,000 from selling her house so they would get her that line of credit.
“I started giving them money in January and gave more in March,” Villadiego said. “I started asking for my money back in October. I was hysterical in November. This was money for my children.” She never saw her cash again. Police told her to sue Arevenca, but she no longer had the funds for a lawyer. Villadiego was scammed—but it was her sense of hope that made her a mark.
Marcos Da Silva, the founder of Madasi, recalls how González gave an impression of great wealth and respectability. To start, González flew Da Silva and his partner, Lausell, to the Arevenca offices in Aruba on a private jet.
Arevenca took up the second floor of one of the more distinguished buildings along the waterfront of Aruba’s capital, Oranjestad. A company flag fluttered out front, and the company name was fastened to the salmon-colored facade. The interior was decorated in handsome furniture. For Lausell and Da Silva, the scene imparted confidence. They had ambled into joker-broker headquarters, but photos show them grinning like they had hit the jackpot.
“He’s a playboy,” Da Silva said, describing to me Gonzalez’s white, short-sleeve shirt, open at the neck, and white linen pants. He presided over a glass-topped conference table, explaining how things would be done. “You look at him, you see a big magnate guy. You know the guy from Virgin? Branson? You see him, he’s like that.”
Framed photos decorated the walls, Da Silva said—González in a Saudi headdress, González with Suriname’s president, Dési Bouterse.
“Man, I believed,” Da Silva said. “I believed in him. Let’s be clear. I believed he had product, just like the Díazes believed, and everyone believed.”
Francisco Javier González Álvarez’s life is shrouded in secrecy, but we know this: He was born December 3, 1949, in La Laguna, in the Canary Islands, off of Spain. The next 45 years are a bit of a blank—nothing to indicate he would become the world’s...
Arturo Díaz Jr. needed a buyer. He had turned 1,000 acres of his family’s Puerto Rico waterfront into a luxury housing development called Coco Beach, but the real estate bubble had burst, and the banks were on his case. At 91, having led a successful career in construction, he was ready to be rid of his share of the $200 million white elephant. So, when a friend named Miguel Lausell said he was working with a billionaire who might want to buy, Díaz was ready to talk.
Lausell was an old acquaintance, and his reputation was solid: Harvard Law, a former phone company president, a Democratic Party fundraiser. He was working for an oil-trading start-up, Madasi Oil, representing a much larger Aruban oil company called Arevenca. So Lausell and his partner, Marcos Da Silva, the CEO of Madasi, met with Díaz. They said the president of Arevenca, a billionaire named Francisco Javier González Álvarez, was interested in the property. Díaz called for his helicopter and gave the Madasi partners a tour.
While Díaz was focused on real estate, Lausell was pushing another offer. Díaz’s main business was Betteroads Asphalt, a paving contractor. Lausell wanted to know whether Betteroads wanted 100,000 barrels of asphalt from Arevenca. At $88 a barrel—well below the market price of about $100—it was a steal. While he waited to work out the details of the property sale, Díaz bargained down the price and prepared to pony up $7.8 million for a tanker of Trinidadian tar.
Díaz liked the idea of building a relationship with someone who could pay $300 million for his share of Coco Beach, so he ignored the various warning signs surrounding the asphalt deal—the fact, for example, that Arevenca wanted the money wired in cash to a numbered Swiss bank account, a practice more common once a relationship is already established. Another warning sign: Arevenca wasn’t a familiar name. But Díaz didn’t imagine Lausell would steer him wrong.
In July, Díaz’s company, Betteroads, wired $2 million. An additional $5.8 million followed in August.
The tanker never arrived.
By September, Díaz knew something was seriously wrong. Betteroads went to the law, but no one was arrested. After a year of discussions, Betteroads sued Madasi and Arevenca in Puerto Rico. This year, Betteroads has pursued criminal charges in Spain. But the Díaz family has yet to recover a cent, and likely never will. (Madasi is also suing Arevenca in US court.)
Arevenca, it turns out, was a sophisticated version of what some traders call a “joker broker.” They are all over the web, offering, say, the entire world’s production of jet fuel or Russian diesel, at a discount—call now! With each con running to the millions of dollars, it only takes one successful job to pay for years of effort. It’s low-risk work. In a dozen interviews I conducted with the FBI, money-laundering experts, oil traders, and industry executives, no one could identify a US prosecution for sales of nonexistent oil products. Few victims go public, fearing the stigma of looking like a sucker. There are enough victims to feed a vast ecosystem of joker brokers, in which Díaz had come up against perhaps the king of them all: Arevenca’s founder, Francisco Javier González Álvarez.
Francisco Javier González Álvarez’s life is shrouded in secrecy, but we know this: He was born December 3, 1949, in La Laguna, in the Canary Islands, off of Spain. The next 45 years are a bit of a blank, and González declined repeated interview requests. Former confidants offer little about his past, other than that he was married at least once. He had at least two kids. Nothing to indicate he would become the world’s foremost vendor of nonexistent oil.
The paper trail of his shady dealings starts in Venezuela in 1994, when he was 44. That’s when he registered a gravel company called Arenera de Venezuela, CA. That’s Arevenca for short.
One of González’s first dubious projects was when he told people he would build the San Francisco Javier port complex on Venezuela’s Caribbean coast. Court records show that he said it would include 800 warehouses, a five-star hotel, a mall, and a heliport. Construction would cost $1 billion. A contractor started to clear land, but the state halted work for lack of permits. The contractor has been in court since 2001, trying to collect on its bill.
Big dreams stymied, González appears to have gone for small-time cheats. In 2004, an American sued to recover two Venezuelan ranches he had sold González after payment never arrived. A helicopter pilot, a renovation contractor, and a lawyer all sued González for unpaid bills.
Then, out of nowhere, González was calling Arevenca an oil company. In 2006, González allegedly made himself out to be an agent for Venezuela’s state oil firm and sold cargoes of diesel to a Nigerian company.
Most legit oil trades are like buying a home—two sides agree on a price. The buyer puts the money in a sort of escrow and sends out inspectors. Once the oil is delivered, the money moves. A buyer who wires cash up front to a new vendor is asking for problems.
Like Díaz, that’s what the Nigerians did. Like him, they had reason to trust: They would later claim that the Venezuelan embassy itself told them to work with Arevenca. As with Díaz, the oil never arrived. The Nigerians sued for $600 million in New York but never served Arevenca. The other defendant, Venezuela’s state oil company, got the case dismissed in August.
Then, in 2009, González went to the West African country of Côte d’Ivoire and promised to build the world’s biggest oil refinery on the Ivorian coast. Arevenca’s shady record was still buried in court documents. Unsuspecting local reporters covered the news. Global financial outlets Bloomberg and Economist Intelligence Unit ran with the story. The news coverage, portraying Arevenca as a legitimate business, gave the company an aura of respectability.
González has never been convicted, though he is facing criminal charges in Spain over the Betteroads affair. But the law is a weak counterweight to his sales prowess.
Like small-time email scammers offering a Nigerian royal fortune, González dazzles his marks with promises of wealth. Make this little deal now and get a big payoff down the road. He pursues those who need something. Maybe he can offer it himself, or maybe they’re impressed by the politicians González eagerly poses with in photos. He adds legitimacy with an impression of panache: fancy cars, a sleek website, favorable press. He’ll provide bank recommendations if pressed, but that’s rarely needed. And when it is, those recommendations may be fake.
Suhey Villadiego fell for it. When González showed up on the Caribbean island of Curaçao in 2009, she was hired to work as a sort of unpaid assistant. She was already in the brokerage game herself and wanted to learn from González’s methods: She said she had previously done oil deals involving off-market Venezuelan crude. To go big-time, she needed a line of credit so she could buy and sell cargoes of fuel—or at least pretend to.
As González negotiated to purchase an old, filthy oil refinery from the Curaçaoan government, he bought his 22-year-old girlfriend a Cartier watch. But when it was time to pay for the refinery, he offered only a fake letter of credit, Villadiego told me in an interview last year. Another time, he sought to withdraw a $200 million false wire transfer from a Curaçaoan bank. The bank managers didn’t fall for the pressure, she said.
Villadiego wasn’t so lucky. She loaned Arevenca $70,000 from selling her house so they would get her that line of credit.
“I started giving them money in January and gave more in March,” Villadiego said. “I started asking for my money back in October. I was hysterical in November. This was money for my children.” She never saw her cash again. Police told her to sue Arevenca, but she no longer had the funds for a lawyer. Villadiego was scammed—but it was her sense of hope that made her a mark.
Marcos Da Silva, the founder of Madasi, recalls how González gave an impression of great wealth and respectability. To start, González flew Da Silva and his partner, Lausell, to the Arevenca offices in Aruba on a private jet.
Arevenca took up the second floor of one of the more distinguished buildings along the waterfront of Aruba’s capital, Oranjestad. A company flag fluttered out front, and the company name was fastened to the salmon-colored facade. The interior was decorated in handsome furniture. For Lausell and Da Silva, the scene imparted confidence. They had ambled into joker-broker headquarters, but photos show them grinning like they had hit the jackpot.
“He’s a playboy,” Da Silva said, describing to me Gonzalez’s white, short-sleeve shirt, open at the neck, and white linen pants. He presided over a glass-topped conference table, explaining how things would be done. “You look at him, you see a big magnate guy. You know the guy from Virgin? Branson? You see him, he’s like that.”
Framed photos decorated the walls, Da Silva said—González in a Saudi headdress, González with Suriname’s president, Dési Bouterse.
“Man, I believed,” Da Silva said. “I believed in him. Let’s be clear. I believed he had product, just like the Díazes believed, and everyone believed.”