Former Pemex chief Emilio Lozoya bound over for trial on money laundering charges

Federal judge Artemio Zúñiga Mendoza bound Emilio Lozoya over for trial for carrying out transactions involving illegally obtained resources; however, the former Pemex chief won’t be imprisoned.

Last night, the federal judge determined that the Attorney General’s Office ( FGR ) provided enough evidence to presume that Lozoya Austin laundered money obtained through the purchase of Agronitrogenados , a fertilizer, which resulted in the loss of MXN 8,000 million for Pemex.

Federal prosecutors asked the judge to keep Lozoya in police custody while he remains in hospital. Lozoya will have to wear an electronic bracelet and turn in his passport.

The judge agreed to the FGR’s request; this means Emilio Lozoya will remain in the hospital during his trial and not in jail.

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Nevertheless, the judge forbade Lozoya from leaving Mexico and ordered him to turn in his passport and visas. He will also have to cover the fees to wear an electronic bracelet so that authorities monitor him.

Meanwhile, the Attorney General asked for six months to carry out an investigation, including obtaining information regarding bank accounts in the Virgin Islands, as well as enough time for the Financial Intelligence Unit to provide information regarding Tochos Holding. The judge granted the request.

During the hearing, prosecutors accused the former Pemex chief of money laundering in connection with the purchase of fertilizer plant Agronitrogenados. According to authorities, Emilio Lozoya used bribe money to purchase a luxurious home in Mexico City. The case also involves his sister Gilda Lozoya Austin and businessman Alonso Ancira.

Before the federal judge defined Lozoya’s legal situation, his defense stated the former Pemex boss was asking the FGR to reach a plea bargain ; this means the defendant will cooperate with prosecutors in exchange for a shorter prison sentence.

Lawyer Miguel Ontiveros said the Lozoya Austin himself asked for a plea bargain in a bid to “speak the truth, tell the truth, and finally have justice.”

During his first hearing, Emilio Lozoya’s said he had been “used” by “an organized apparatus of power” during his tenure at the head of the state-owned company from 2012 to 2016.

Lozoya did not identify that group, but the wording appeared to suggest he was ready to spill the beans on top officials in the administration of President Enrique Peña Nieto . The hearing wasn’t open to the public.

According to an informal synopsis of the session provided by the court system, Lozoya’s lawyers said they would not argue against the prosecution’s request to the judge that Lozoya is bound over for trial on money-laundering charges.

Sources said Lozoya agreed to cooperate with prosecutors and will act as a protected witness in return for possible sentence reductions or elimination of charges.

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President Andrés Manuel López Obrador said Lozoya’s trial “is a before and after” moment in what he describes as the main priority of his administration: fighting corruption .

The court opened proceedings via a video link because of COVID-19 pandemic restrictions and the fact that Lozoya has been under treatment in a hospital.

Lozoya said he had been “systematically intimidated, pressured, and used,” though he did not say by whom. There had been speculation he may have felt pressure to raise money for Enrique Peña Nieto’s presidential campaign.

The hearing focused on charges in a 2013 case in which a Mexican firm, Altos Hornos de Mexico, sold an overpriced old fertilizer plant to Pemex after allegedly paying Lozoya around USD 3.4 million in 2012.

Meanwhile, Lozoya's lawyer said he would present evidence that will show his client is innocent.

The lawyer said: "as Mr. Emilio Ricardo Lozoya Austin has said, he is working with the Attorney General's Office to reach a plea bargain and this means there is a clear and direct will to collaborate with the Attorney General's Office to evidence what he (previously) said: the existence of an organized power machinery where he was used as an instrument (...) he is innocent."

López Obrador said the new owner of the plant has since offered to repay as much as USD 200 million related to the purchase. The president said Mexico hopes to get back some of the money from bribes and crooked contracts, and he criticized the fact that Mexican corruption cases often play out in U.S. courts, and that money recovered in those cases also often remains in the United States. He said he has instructed Mexican diplomats to try to get some of it returned to Mexico.

Odebrecht

allegedly kicked in an additional USD 6 million once Peña Nieto was in office. Some of that money was allegedly used to bribe federal lawmakers into voting for his signature energy reform package, known as the Pact for Mexico, which opened the country’s energy sector to greater private investment.

“Mr. Lozoya is letting it be known that there were these bribes and that the money was used to buy the energy reform and that the money was divided among the parties’ legislators,” López Obrador said last week. He had opposed the energy overhaul.

The president also said the case “will help a lot, I repeat, in banishing corruption from Mexico.” He called graft a bigger problem for Mexico than the COVID-19 outbreak.

“I am convinced that it is Mexico’s main problem. It is not a pandemic ... it is a plague,” President López Obrador said.

Emilio Lozoya is due to appear in court via video link today regarding the Odebrecht case.

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