Miami judge blasts Venezuela's top airline for 'fraud'

MEDELLIN, Colombia — Two Venezuelan businessmen once convicted in the U.S. as unregistered agents of the late Hugo Chavez have scored a major victory in a Miami courtroom in a bitter fight for control of the South American country's largest private airline.

While Avior Airlines has largely been grounded by U.S. sanctions and the coronavirus pandemic, the investors hope to recover at least some of its assets, including a regional airline in neighboring Colombia.

A Miami circuit judge this week rejected a suit by Jorge Añez that alleged his Florida-based partners had overcharged Avior for parts and services.

Judge Michael Hanzman found that Añez had no authority to represent Avior, saying there was overwhelming evidence he cooked the company's books and formed an "illegitimate board of friendlies" to seize the struggling airline.

Ruling on the previously unreported lawsuit, he found that Añez had lied in testimony and tried to use the U.S. legal system to perpetrate "fraud."

"Mr. Añez's claim of 100% ownership of Avior is a complete fabrication, which reeks of afterthought and was concocted only after ......a dispute over the operations of Avior," the judge wrote.

Neither Añez, his lawyer nor Avior's President Juan Bracamonte responded to repeated email and phone requests for comment.

The partner Añez tried to force out is an investment group that includes Carlos Kauffmann and Moises Maionica. Both men were sentenced in 2008 to more than a year in U.S. federal prison for their role in a political scandal involving a suitcase full of $800,000 in cash sent to Argentina aboard a Venezuelan government plane.

The two Venezuelan businessmen testified that they had been sent by then-President Chavez's spy agency to Miami to offer hush money to an FBI informant to keep quiet about the cash shipment, which was allegedly destined to finance the campaign of former President Cristina Fernandez de Kirchner.

Upon completing their sentences, both men remained in the U.S. and resumed their careers.

In 2010, they paid $5 million for a 50% share in Avior and its affiliates and helped transform it from a near-bankrupt carrier with a single aircraft to one serving routes throughout Venezuela as well as Miami and Latin America.

As foreign carriers abandoned Venezuela over payment disputes with the socialist government of Nicolas Maduro' — Chavez's successor — Avior for a while managed to fill the void, boosted by heavily subsidized jet fuel, a highly favorable exchange rate for its ticket sales in dollars and unmet demand from wealthier Venezuelans who still could afford to travel.

But as the U.S. has imposed stiff sanctions on Venezuela, the airline has once again come upon hard times.

In 2019, it lost its profitable route to Miami as the U.S. imposed a flight ban on Venezuelan airlines in its bid to force Maduro from power. It's also been blacklisted by European regulators due to safety concerns. Meanwhile, the coronavirus has grounded its fleet of 26 aircraft for months.

The company's highest-valued asset, an Airbus 340-300, was recently turned over to Maduro's government to pay off old debts and fees, according to Kauffmann. This summer the same plane, its tail number changed and now operated by state airline Conviasa, flew from Caracas to Tehran, flight tracking records show.

According to the judge's order, relations between Añez and his partners began to sour in late 2018. A few weeks later the two sides decided to part ways, with Añez agreeing to purchase the half of the airline he didn't already own for $37.5 million.

But the deal was never executed and instead Añez maneuvered to appoint an "illegitimate board" comprised of his son and longtime lawyer, according to the judge's order. He also filed the Miami lawsuit against his partners, accusing them of using a Florida-registered company they also owned to overcharge the airline by several millions of dollars for parts, supplies and maintenance.

In his order, Judge Hanzman didn't determine the merits of Avior's underlying claims, just whether Añez, as the purported 100% shareholder of the airline, had the authority to initiate legal proceedings.

He found that Añez in testimony tried to disavow the existence of a company ledger that listed the Miami investors as shareholders and replace it — after filing his lawsuit — with a bogus ledger where his partners were excluded.

"Testimony by Mr. Añez is emblematic of a disregard for the truth and a willingness to commit perjury and not engage the evidence in a credible way," the judge wrote.

Kauffmann said that even as he and Maionica have tried to move beyond his past, Añez thought that with his lawsuit he could pressure them into selling their shares and taking full control of the company for practically free.

"He thought that because of our background we would be afraid to defend ourselves in American courts and that it would be a handicap," Kauffmann told the AP.

The two sides are also fighting in a parallel arbitration at the International Chamber of Commerce.

Kauffmann concedes that there's little worth fighting for and that reclaiming the company in Venezuela is a lost cause so long as Maduro remains in power. Still, emboldened by the Miami ruling, he hopes to use the judgment to salvage what he can of Avior's investment in neighboring Colombia, where it operates a regional airline, Gran Colombia de Aviacion, out of the city of Cali.