Morgan Stanley Took Millions from Venezuelan Businessman Accused of Money Laundering

Morgan Stanley, Interactive Brokers, and other financial advisory firms are being investigated by U.S. authorities for managing roughly $100 million belonging to Venezuelan businessman Luis Mariano Rodriguez Cabello, The Wall Street Journal reported.

Rodriguez, the cousin of former Venezuelan oil minister and ambassador to the United Nations Rafael Ramírez, has been accused of laundering $2 billion in the U.S. on Ramírez's behalf and Rodriguez is currently under investigation by U.S. and international agencies.

Ramírez has served as a lead figure in Venezuela's energy sector since at least 2002 when he was appointed to lead the energy ministry by former president Hugo Chávez. He faces allegations of having taken money from state accounts through fraudulent insurance contracts with the country's national oil company, according to the Wall Street Journal.

Rodriguez's accounts reportedly displayed "red flags for potential money laundering activities," the Journal said. According to the WSJ report, the so-called "red flags" included "previous scrutiny from regulatory and enforcement officials and the fact that the source of the funds was Venezuela, which has been classified for more than a decade by the U.S. government as a high-risk jurisdiction for money laundering."

According to the Wall Street Journal, the FBI, the Securities and Exchange Commission (SEC) and other federal agencies are now investigating why Morgan Stanley and the other firms would agree to take on Rodriguez's accounts when there were possible indications they could be connected with money laundering.

Under federal banking laws, financial institutions are barred from allowing their services to be used in illegal matters. To maintain compliance, they are expected to vet their customers and the individual's relationships, source of funds, and financial transactions.

Morgan Stanley, Interactive Brokers, and the other firms have not been accused of wrongdoing, WSJ reports. Interactive Brokers told the paper it is "committed to compliance with all applicable laws and regulations" but could not comment on specific accounts or customers. Morgan Stanley did not reply to WSJ or Newsweek when asked for comment.

Additionally, the Wall Street Journal reported it reached out to the SEC and the FBI, as well as Rodriguez and Ramírez, but did not get a response. The Journal report said that in previous statements addressing his allegations of wrongdoing, Ramírez has called the accusations "unsubstantiated and politically motivated."

Venezuelan President Nicolás Maduro, who served alongside Ramírez under Chavez and now faces a disputed presidency, has called Ramírez corrupt, the Wall Street Journal said.

According to the report in the Journal, "former U.S. officials" said the accusations true or not, served as a ploy to distract from the U.S.-issued charges of drug trafficking and conspiring with terrorists that Maduro is currently facing.