A former employee of Vitol, the world’s largest oil trader, is about to face trial in the United States this week for alleged bribery of officials in Ecuador to secure a $300 million contract from the state oil company Petroecuador.
Javier Aguilar, aged 49, is the first individual to be prosecuted in the United States as part of a comprehensive Justice Department investigation into commodity trading firms engaging in corrupt practices to win contracts from state-run companies in Latin America.
This scandal has had far-reaching implications, affecting energy markets from Mexico to Brazil.
The process begins with jury selection on Tuesday in a federal court in Brooklyn, with opening statements scheduled for Wednesday.
Commodity traders, dealing in raw materials, often work in regions where corruption is prevalent, exposing them to potential violations of the Foreign Corrupt Practices Act (FCPA), a U.S. law prohibiting bribery of foreign officials.
Federal prosecutors allege that Aguilar, an energy trader based in Houston, paid nearly $1 million in bribes to senior Petroecuador manager Nilsen Arias and an unnamed Energy Ministry official.
The bribes were intended to assist a state-owned Middle Eastern company in securing a 30-month contract to market fuel oil for Ecuador in December 2016.
Vitol was involved in purchasing the fuel oil from the Middle Eastern firm and marketing it.
The company receiving the bribes is not explicitly named in court documents, but it has been previously reported as Oman Trading International, now integrated into Omani state oil company OQ, which declined to comment on the matter.
Prosecutors claim that Aguilar had Vitol transfer money to shell companies controlled by his associates, who then routed the funds to Arias and the unnamed official.
To make these transactions appear legitimate, Aguilar had Vitol enter into what prosecutors deem “sham” agreements with these shell companies.
Arias and the associates involved, Lionel Hanst, Antonio Pere, and Enrique Pere, have already entered guilty pleas and may testify against Aguilar.
Aguilar has pleaded not guilty to multiple charges, including conspiracy to violate the FCPA, violating the FCPA, and conspiracy to commit money laundering.
His defense argues that he had no reason to suspect the legitimacy of the transactions described as sham contracts with shell companies.
They also claim that the Pere brothers portrayed themselves as “knowledgeable consultants” in Ecuador’s oil market.
In December 2020, Vitol admitted to bribing officials in Brazil, Mexico, and Ecuador, agreeing to pay $164 million to resolve investigations in the U.S. and Brazil.
Separately, global energy trader Gunvor is preparing for a potential fine of up to $650 million to resolve U.S. investigations related to its business dealings in Ecuador.
A former Gunvor employee, Raymond Kohut, already pleaded guilty to money laundering conspiracy in 2021 in connection to this scheme.
If convicted, Aguilar could face over a decade in prison, with the actual sentence determined by U.S. District Judge Eric Vitaliano, taking various factors into account.
Aguilar also faces charges in federal court in Houston concerning the alleged Pemex scheme, where he has entered a not guilty plea.