World March 14, 2026

U.S. Prosecutors Oppose Venezuelan State Funds Being Used for Maduro's U.S. Defense

Manhattan prosecutors say Treasury exemption allowing Venezuelan government to cover legal fees was revoked after an administrative error

By Sofia Navarro
U.S. Prosecutors Oppose Venezuelan State Funds Being Used for Maduro's U.S. Defense

U.S. federal prosecutors told a Manhattan court they oppose allowing Venezuela’s government to pay legal fees for former President Nicolas Maduro and his wife Cilia Flores in their U.S. criminal case, arguing Washington has not recognized them as legitimate officeholders for years and that a prior Treasury exemption was issued in error. The dispute centers on whether Venezuelan state funds may be used for defense costs after the Treasury Department revoked an exemption that briefly permitted such payments.

Key Points

  • U.S. prosecutors argue Venezuela should not use state funds to pay for Nicolas Maduro's U.S. criminal defense; they said the Treasury exemption that briefly allowed such payments was an "administrative error".
  • Maduro and his wife Cilia Flores were captured on January 3 in a U.S. military operation at their Caracas home; both plead not guilty and remain jailed in Brooklyn awaiting trial.
  • The dispute raises questions about the application of U.S. financial sanctions and recognition of foreign leadership, with market and sovereign risk implications for government, legal services, and financial sectors.

U.S. prosecutors in Manhattan argued on Friday that Venezuelan government funds should not be used to cover the U.S. criminal defense of ousted President Nicolas Maduro, saying the United States has not treated him as Venezuela's legitimate leader for some time.

The argument responds to a motion last month from Maduro's attorney, Barry Pollack, who asked U.S. District Judge Alvin Hellerstein to dismiss the indictment against Maduro. Pollack's filing said the U.S. Treasury Department had revoked, without explanation, an exemption to U.S. financial sanctions that previously allowed Venezuela's government to pay for Maduro's legal costs. He contended the revocation interfered with Maduro's Sixth Amendment right to counsel and noted that "Venezuelan law and custom" require the government to cover the expenses of the president and his wife.

In a separate court filing last month, an official from Venezuela's attorney general's office indicated the government was prepared to pay for the defense. Prosecutors with the Manhattan U.S. Attorney's Office countered on Friday, saying the exemption that briefly permitted state-funded legal fees had been granted in error and was an "administrative error."

The prosecutors noted that Maduro and his wife, Cilia Flores, retain the ability to use personal funds to pay for their legal representation. Flores' counsel, Mark Donnelly, had also urged Judge Hellerstein to dismiss charges against her related to the financing of her defense.

In their filing, the prosecutors emphasized that while both defendants assert an entitlement to funds under the Venezuelan constitution, they also were surely aware that the U.S. Government did not consider them to be legitimate officeholders. The prosecutors added that one purpose of the U.S. sanctions was to pressure Maduro and Flores to leave power.

The Venezuelan communications ministry, which handles press inquiries for the government, had not provided a response to a request for comment at the time of the filing.

Maduro and Flores were seized on January 3 during a U.S. military operation at their Caracas residence, and both have pleaded not guilty to the charges they face in the United States. They are currently detained in Brooklyn while awaiting trial. Their legal teams did not immediately reply to requests for comment.

Judge Hellerstein is scheduled to address the dispute over legal fees at a hearing on March 26 in Manhattan.

The charges against Maduro allege drug trafficking and stem from accusations that he rigged re-election votes in 2018 and 2024, claims he denies. Following Maduro's capture, his former vice president, Delcy Rodriguez, has been administering the country. In a separate court filing on March 11 in an unrelated matter, a State Department official stated that the U.S. recognizes Rodriguez as Venezuela's sole head of state.


Context and procedural posture

The immediate dispute before the court concerns whether an exemption to financial sanctions, which briefly allowed Venezuela's government to disburse funds for legal expenses, should affect the indictment or the defendants' access to counsel. Prosecutors frame the Treasury action as a mistake and maintain that the defendants can rely on private resources for representation. The court will consider these competing contentions at the March 26 hearing.

What is at stake

  • Access to state-funded legal representation for defendants accused of serious federal crimes in the United States.
  • Interpretation and enforcement of U.S. financial sanctions and the scope of Treasury exemptions.
  • Recognition of foreign leadership by the U.S. Government and its impact on legal and diplomatic determinations.

Risks

  • Uncertainty over whether the court will permit state-funded legal fees could prolong defense litigation and affect legal costs - impacting legal services and related financial planning.
  • The contested recognition of legitimate leadership in Venezuela by the U.S. government may complicate diplomatic and financial interactions, creating risk for entities exposed to sovereign actions or sanctions.
  • Potential shifts in interpretation or enforcement of Treasury exemptions create regulatory uncertainty for financial institutions handling transactions related to sanctioned states.

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