Corruption expert professor accused of laundering $2.5 million from Venezuela

Professor took 10 per cent commission from scheme, reports say

Bagley has written books on drug trafficking in Latin America and has been quoted in international publications (CBS Miami)

For years, professor Bruce Bagley was a go-to expert for journalists reporting on drug trafficking, money laundering and corruption in South America.

In 2016, for instance, he was asked about two nephews of the Venezuelan president who had been charged with drug trafficking.

“The nephews are just the tip of the iceberg,” Mr Bagley, who teaches international studies at the University of Miami, told Univision. “Corruption is rampant in power circles in Venezuela.”

Now federal prosecutors have accused Mr Bagley of being more than an academic observer in the criminal world that he spent his career studying.

Federal prosecutors announced he had been arrested on money laundering charges for his involvement in a scheme to hide the origins of more than $2.5m (£1.6m) in proceeds from bribery and corruption in Venezuela.

They said he kept about 10 per cent of the money for himself as a commission.

Prosecutors did not say whether the accusations against Mr Bagley were connected to other open investigations.

Neither did they provide details about the bribery scheme. The indictment says only that the corruption was “in connection with public works projects in Venezuela”.

Mr Bagley, who did not respond to telephone and email messages, appeared in federal court in Miami on Monday, where a magistrate judge set a $300,000 (£231,000) bond. He was expected to post bail and be released later in the day, his lawyer, Daniel Forman, said.

Mr Forman said that it was too early to comment on the evidence against Mr Bagley, adding that he was still getting familiar with the accusations laid out in the indictment.

Investigators in the US have increasingly targeted Venezuelan money-laundering schemes in recent years, focusing on officials whom they suspect of graft and the people connected to them. In the past two years, US officials have imposed numerous sanctions against Venezuelan politicians, accusing them of embezzlement, corruption and drug trafficking.

In July, US officials accused Venezuela’s president, Nicolás Maduro, of being involved in a corruption scheme in which his relatives, business partners and officials siphoned off massive sums of money that had been meant to help feed starving Venezuelans.

Mr Maduro’s administration has long denied any wrongdoing, saying in the past that accusations from US officials are part of an “economic war” to bring down his government.

Bagley has published about organised crime in Latin America frequently (University Press of Florida)

Mr Bagley has studied organised crime in Latin America for decades and has been published frequently on the subject. He edited an academic book released in 2015 entitled Drug Trafficking, Organised Crime, and Violence in the Americas Today.

Another book he edited, on the relationship between countries and organised crime, was released in May.

He was scheduled to teach a class on drug-trafficking in the Americas at the University of Miami this spring, but a spokeswoman said Mr Bagley had been placed on administrative leave after the indictment against him was made public.

Over the years, he has been quoted numerous times in media reports about drug trafficking, including in New York Times articles about the international drug trade and stories from NPR about the ongoing political crisis in Venezuela.

In addition, Mr Bagley also consulted on drug trafficking and money laundering for the United Nations, the FBI, the Drug Enforcement Administration and several Latin American governments, according to a professional biography published online by the University of Miami.

In 2005, Mr Bagley started a company, Mr Bagley Consultants, in Florida, according to public records.

According to prosecutors, Mr Bagley opened a bank account in Florida under his company’s name in 2016.

But there was hardly any activity in the account until a year later, when he started receiving massive deposits from bank accounts in the United Arab Emirates and in Switzerland.

Those accounts ostensibly belonged to a food company and a wealth management firm but were actually controlled by a Colombian national whose money came from “the proceeds of foreign bribery and embezzlement stolen from the Venezuelan people”, according to the indictment.

Mr Bagley knew the source of the money and entered into “multiple sham contracts” in order to conceal it, according to the indictment.

After each deposit, Mr Bagley would go to his bank and get a cashier’s check for about 90 per cent of the money, which he would then give to an unnamed individual, the indictment said. The rest of the money was wired to Mr​ Bagley’s personal bank account.

In October 2018, the bank closed the company’s account because of suspicious activity, according to the indictment.

But Mr Bagley opened another account in his name that December and continued the scheme until April 2019, receiving at least 14 illegal deposits.

Though Mr Bagley lives in Florida and the supposedly laundered funds were sent to Florida banks, prosecutors said they were prosecuting the case in Manhattan because the money passed through New York City as it came from abroad.

Mr Bagley was charged with two counts of money laundering and one count of conspiracy to commit money laundering. He was expected to be summoned to appear in federal court in Manhattan to face the charges. If convicted, he could face up to 20 years in prison.

Geoffrey S. Berman, the US attorney in Manhattan, said in a statement that the money Mr Bagley had laundered was “stolen from the citizens of Venezuela”.

“Today’s charges of money laundering and conspiracy should serve as an object lesson for Bruce Bagley, who now faces a potential tenure in federal prison,” Mr Berman said.

The New York Times