Bulgaria Investigates Bank Transfers From Venezuela's PDVSA

(Bloomberg) -- Bulgarian officials blocked a bank account as part of a money-laundering probe after a tipoff from U.S. authorities about "millions of euros" transferred from the sanctioned Venezuelan state oil company, Petroleos de Venezuela S.A.

The State Security Agency froze a trust account opened by a lawyer with multiple citizenship, including Bulgarian, and is preparing to check with all other Bulgarian banks for similar transfers, Chief Prosecutor Sotir Tsatsarov told reporters in Sofia Wednesday. The U.S. imposed sanctions on the Venezuelan company, known as PDVSA, as it seeks to loosen President Nicolas Maduro’s grip on power in the oil-rich South American country.

The U.S. provided information for the investigation, underscoring “the critical need to stop the illegal transfer of funds to support the illegal authorities in Venezuela,” U.S. Ambassador to Sofia Eric Rubin told reporters. “Our government is working very closely with Bulgaria and other countries in the EU to ensure that the wealth of the people of Venezuela is not stolen,” he said.

Part of the money has already been transferred on to banks outside Bulgaria, Tsatsarov said. The transfers were made with justifications including the funding of a sports federation in Venezuela, food purchases and other activities that “obviously have nothing to do with reality,” he said. Prosecutors are still collecting information before opening a money-laundering case.

A representative of Bulgaria’s central bank didn’t immediately respond when contacted by Bloomberg. After the country endured the 2015 collapse of its fourth biggest bank, which toppled the government and the resignation of the central bank governor, its lenders are undergoing asset quality reviews by the European Central Bank. The Black Sea state is seeking to join the pre-euro exchange mechanism known as ERM-2.

To contact the reporter on this story: Slav Okov in Sofia at sokov@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, Michael Winfrey, Andras Gergely

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