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Betteroads sues Venezuelan company for fraud, seeks $13.8M

Betteroads owns and operates an asphalt terminal in Guayanilla.

Betteroads Asphalt Corp. and sister subsidiary Betterrecycling have filed a civil suit against Venezuelan company Arenera de Venezuela Compañía Anónima (Arevenca), as well as several of its subsidiaries and its executives, seeking $13.8 million in damages over an aborted transaction the plaintiff claims was fraudulent from the start.

In the lengthy lawsuit filed last week, Betteroads asked the San Juan Superior Court to require Arevenca to return $7.8 million it paid in July 2011 to purchase 100,000 barrels of asphalt, which, after several months of stalling, the Venezuelan company never delivered.

The companies founded by local businessman Arturo Díaz-Marquez about 50 years ago produce, sell and apply asphalt for different uses in Puerto Rico and the U.S. Virgin Islands. Díaz also owns the 1,000-acre property where the luxury Coco Beach project sits in Río Grande.

In July 2011, the parties agreed to a transaction whereby Betteroads would buy 100,000 barrels of asphalt at $80 per unit, for a total of $8 million from Arevenca.

The deal required Betteroads to pay a $2 million deposit, which it wired on July 15, 2011. The rate was subsequently reduced, putting the final sale price at $7.8 million. In August 2011, Betteroads wired the outstanding $5.8 million pending for the asphalt.

A back-and-forth of emails ensued through which Betteroads inquired about the asphalt shipment that Arevenca repeatedly said was en-route. However, the lawsuit details how Arevenca changed its story several times regarding where the product would ship from and when it would arrive to Puerto Rico.

Arevenca ultimately never produced the asphalt purchased, prompting Betteroads to issue an ultimatum in July 2011: either supply the asphalt on or before Oct. 3, 2011, or return the $7.8 million it paid, by the following day.

Because the asphalt shipment never arrived, Betteroads and Betterecycling were forced to shut down their operations temporarily late last year, according to the lawsuit.

“The co-defendants in common and concerted agreement deceived and misled Betteroads with the purpose of defrauding and stripping it of its assets,” Betteroads claimed in the lawsuit that detailed the fraudulent deal.

The lawsuit names a long list of defendants, including well-known attorney Miguel Lausell, who represented Arevenca in a second deal proposed, but that also never took place.

Among other things, Betteroads claims Lausell took advantage of his friendship with the Díaz family and represented himself as a realtor to possibly broker a sale of the Coco Beach property to the Venezuelan company. At one point last year, Arevenca CEO Francisco González had reportedly deposited $150 million into a Swiss account to be used to pick up the property, allegedly upon Lausell’s recommendation.

“As part of the fraudulent scheme designed by the co-defendants, they told Betteroads that it would beneficial to them to buy the asphalt, as that way, Arevenca would buy the Coco Beach project in Río Grande,” the lawsuit states.

Aside from asking the court to require Arevenca to return the $7.8 million paid, Betteroads is also seeking $3 million in lost revenue, $2 million to cover the subsequent increase in the cost of asphalt, and another $1 in interest, additional expenses and lost sales.

Betteroads owns and operates an asphalt terminal in Guayanilla, with it states in its website is the largest facility of its kind in the Caribbean. It also has several plants throughout the island.

Author Details
Author Details
Business reporter with 30 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other segments of Puerto Rico’s economy.

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