The economic crisis and high crime rates in Venezuela have forced thousands out of their homeland and, given the alleged advantages that the Peruvian government offers Venezuelan immigrants, such as stay permits and recognition of university degrees, many take the four-day ride to a better future. Although for some the promise comes through in the form of dignified living conditions, many Venezuelans are exploited in 12-hour working shifts, earning minimum wage.
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The second was taken in London at a 2010 demonstration, and the third was taken at a street protest in 2016, during the Republican National Convention in Cleveland.
That’s why Anderson Ruiz (not his real name) resorted to unorthodox survival strategies.
“The money comes fast, but it’s hard to hear the girls talk of how much they despise what they do. They’re in need and this is their best option to send money home.”
His work consists on getting a Peruvian client in touch with a Venezuelan woman. That alone is 50 soles, as much as an average working day, in 15 minutes. In turn, the girls charge 300 soles per hour. The operation takes place mostly in well-to-do areas of the Peruvian capital.
According to Anderson, several hotels in the city have special employees charged with letting pimps know if any new Venezuelan women have arrived so they can make their proposals. There are even nascent businesses around prostitution, such as renting furnished apartments specifically for Venezuelan women.
“So you have Peruvian friends who understand the situation of Venezuelan women and ask you whether one of them would like to earn some extra money. They always ask you about it.”
Peruvian friends understand the situation of Venezuelan women and ask you whether one of them would like to earn some extra money.
Anderson travelled from Aragua de Barcelona to Lima on the first week of December 2017, with a suitcase full of ideas and enthusiasm. He’s an industrial security technician, and he worked on that for several years in a prestigious Venezuelan company. His first job in Peru was as a bearer in a shipping company: he unloaded containers from 9:00 a.m. to 9:00 p.m. every day. He got tired of the routine in a month and resigned.
In recent months, Peruvian news have been filled with stories of native citizens being laid off in favor of Venezuelans. There are even job offers exclusively for Venezuelans, because employers can save money in terms of wages and labor benefits. Anderson had messy living conditions, he slept on the floor in a gym where a friend of his worked.
He currently lives in a hostel along with many of his countrymen. Noticing that men cruised through women’s quarters several times a day, he started talking to them and confirmed they were working as prostitutes — and thus his business came to be.
Anderson says that the business is profitable thanks to the physical traits of Venezuelan women. His phone is always ringing and his wallet’s filling up. The customers tend to be businessmen living in the capital; he describes a recent case, that of Ámbar, a friend of his who’s been in Peru for several months. She needed $1,000 to bring her daughter from Caracas, but she couldn’t afford that with her previous job on a basic salary barely covering daily expenses, transport, food and rent. She would send whatever money she had left after that to her family.
The meeting was set for the day following my message and it was just this simple: Anderson gave me her number, I sent her a text to set the appointment.
A hostel employee approached her offering 300 soles for an hour of pleasure. Ámbar found herself on a tight spot. Eventually, he became her first customer, and monetary benefits were evident immediately.
Anderson was “her agent.” He helped her with photoshoots and arranged a few contracts. When he talks about new customers, her sadness is evident. Meanwhile, Ruiz doesn’t see any chances of finding a better job where his rights are respected — but he doesn’t refuse the earnings produced by his mediation.
With the money he gets, he helps his family, who ignores the origin of the money, and he’s been paying off what he had to borrow to leave Venezuela.
Like any fixer, he sends customers a link to a website (not safe for work, explicit images), so they can pick the woman they want. That’s how I got in touch with Brunela, identified with a Venezuelan flag in the webpage. She charges 300 soles an hour, available between Monday and Sunday, only for dates in the Lima district.
Her reply was laconic, straight to the point. The meeting was set for the day following my message and it was just this simple: Anderson gave me her number, I sent her a text to set the appointment, as in any other transaction.
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There are currently seven Venezuelans offering their escort services on the website.
“The families of many women here have no clue of what they’re doing for a living. One of them has a husband and a daughter in Trinidad & Tobago and they’ll soon arrive [in Lima]. She still hasn’t figured out how to tell them.”
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Starting in 2014, members of the country's elite and public officials embezzled more than $1 billion from Venezuela's state-owned oil company. The scheme exploited the country's foreign exchange system.
Former German banker Matthias Krull is expected to hand himself in to the Miami Detention Center on April 29 to begin serving 10 years in prison.
Krull was sentenced to prison last October, after pleading guilty to participating in a scheme to launder dirty money from Venezuela through several countries, including the USA.
Seven other people were indicted with Krull in August 2018, including 'former officials, professional third-party money launderers and members of the Venezuelan elite.'
But what does a German national, who lived in Panama and was employed by Swiss bank Julius Bär, have to do with such a scheme?
Die Zeit journalist Ingo Malcher met Krull in Florida in January and published an exhaustive article about the case.
Speaking to DW, he explained that Krull was just one piece of a much bigger puzzle, which revolves around Venezuela's state oil company PDVSA – Petróleos de Venezuela, S.A. – the country's main source of income and foreign currency, specifically US dollars and euros.
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A number of prominent members of the Venezuelan elite were involved in the scheme. They played the country's currency system to gain money illegally – totaling $1.2 billion (€1.07 billion) in fraudulent sums.
Among them, according to US investigators, are Raúl Gorrín, a Venezuelan billionaire who owns the news network Globovision, and three stepsons of Venezuelan President Nicolas Maduro, also referred to as 'los Chamos.' The three have not been indicted.
As the citizens of Venezuela suffered from the severe economic crisis, fraudsters profited from the chaos
Playing Venezuela's currency exchange system
How did the embezzlement work? It took advantage of Venezuela's currency exchange rules.
'There are two exchange rates in Venezuela: the national currency, the bolivar, and the US dollar,' Malcher told DW. 'The rate of the bolivar to the US dollar is fixed by the central bank.'
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But not everyone can convert bolivares into dollars, and vice-versa. Only a few companies can operate an official conversion from bolivares to dollars – including PDVSA.
All those who don't have access to official exchanges must operate on the black currency market, which has very different rates than the official ones.
Bolivares have a much higher value at the official exchange rate than at the black market rate – and the group of fraudsters reportedly exploited both the official and unofficial currency exchange systems.
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'The fraudsters had dollars,' Malcher explained. 'With the dollars, they bought bolivares on the black market. They then gave a loan to PDVSA, which paid them back at the official exchange rate' – which resulted in them having many more dollars than what they started out with.
This allowed the group to increase their initial investment tenfold.
The operation began in December of 2014, and was meant to embezzle $600 million (about €534 million). By May 2015, the group had been able to double the amount to $1.2 billion (€1.07 billion).
The complex money-laundering scheme
This is when Krull came into play. According to investigators, starting in 2016, he was tasked by one of the co-conspirators to launder a portion of the embezzled money. He reportedly was able to clean $60 million (€53 million), and received $600,000 (about €534,000) in commissions for it.
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Krull was not the only person involved in money laundering for the group – an operation which involved different means and countries.
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'A great many different models were chosen,' Malcher told DW. 'We know that a very large part of the money first went to Malta, namely to shell companies which had 'nominee shareholders,' strawmen to whom the companies belonged – but only on paper.'
'From Malta, they then reportedly invested this money in different businesses. For example, they invested in bonds issued by a company, or they reportedly invested on a grand scale in real estate in Spain. Or they transferred it through so many banks that the sender was no longer recognizable,' Malcher said.
Money laundering's destination countries
In February, after a tip-off from US investigators, authorities in Bulgaria blocked transfers from a series of suspicious bank accounts that received millions of dollars from PDVSA.
The case appears to not be directly related to Krull's scheme. The bank accounts were opened by an individual with multiple citizenships, including a Bulgarian one, at a small, unnamed Bulgarian bank.
According to Malcher, people looking to launder money usually look for countries with weak banking supervision and stable currency to clean their dirty funds.
'Countries like Bulgaria, but also countries like Germany, are target countries for this kind of money,' Malcher explained. 'If you have to hide money gained through corruption somewhere in the world, of course, a lot of countries come to mind.'
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Investigators are now looking at all transfers in and out of the suspicious accounts.