The corruption trial of Guayaquil Mayor Aquiles Alvarez entered its closing phase on Sunday, when an Ecuadorian criminal tribunal resumed hearings to receive final defense evidence and closing arguments in a case centered on an alleged subsidized-fuel diversion scheme.
The proceeding, known as the Triple A case, is one of two trials Alvarez is currently facing. It has run for more than four months, gathering dozens of witness testimonies, technical expert reports and documentary evidence submitted by the Attorney General's Office, the Hydrocarbons Regulation and Control Agency (ARCH), state oil company Petroecuador and the defense teams of 22 defendants, both individuals and companies.
The alleged scheme
Prosecutors contend that companies linked to Alvarez and his brothers Antonio and Xavier formed a structure to sell subsidized fuel in market segments for which it was not authorized. According to the investigation, the operation shifted diesel and gasoline between the automotive, industrial and domestic maritime sectors and international shipping markets, causing an estimated $61.5 million in losses to the state, corresponding to 22.7 million gallons of fuel.
A central figure in the defense phase was Jose Ricardo Cevallos Avellan, a former manager and shareholder of Fuelcorp S.A., who also testified as a protected prosecution witness. Cevallos described what he called the cambiazo, a mechanism by which subsidized fuel designated for one market segment was sold in another where prices were higher.
He explained that diesel is technically the same product regardless of end use, and said the only distinction between segments was the state subsidy attached to some of them. He argued that the entire regulatory structure existed for a single purpose: the subsidy.
Cevallos also described the corporate structure of companies including Copedesa, Corpalubri, Flonape and Ternape, saying the Alvarez brothers made the commercial decisions and that related companies systematically benefited from the price differential generated by subsidies. He cited fuel sales to foreign firms, including Chopituna S.L. and Atuneros de Paraguana C.A., as evidence of the alleged diversion of subsidized diesel toward international shipping markets.
Evidence and denials
The prosecution built its case on computer forensic reports, financial analyses and document examinations drawn from electronic invoices issued by the Internal Revenue Service, Petroecuador dispatch records and fuel commercialization logs. Investigators also presented surveillance reports on two vehicles, a Chevrolet Cruze and a Toyota Hilux, which according to computer forensic experts recorded fuel loads that exceeded their tank capacity.
Alvarez took the stand and denied any involvement in an illegal fuel scheme, saying the prosecution had not produced a single invoice or dispatch document proving the alleged crime. He also criticized the absence from trial of Nicole Bermudez, a former ARCH official whose complaint launched the investigation.
ARCH executive director Christian Puente disputed that characterization, saying forensic experts had in fact analyzed the invoices and Petroecuador dispatch records in detail. He added that Bermudez's testimony was irrelevant to establishing whether a crime occurred, since her role was limited to reporting a suspected irregularity that the prosecution then investigated independently.
The tribunal, presided by judge Jorge Sanchez Pico alongside judges Clara Soria and Victor Barahona, will move into deliberations after closing arguments conclude before issuing a verdict.
