At 15.50 hours on 17 April 1941, U-123 fired a single G7a stern torpedo at the unescorted and neutral Venezuela and hit her amidships south-southwest of Rockall. The U-boat had spotted the modern and fast ship at 04.30 hours and decided to attack it because she was not following the routes for neutral vessels, the mistake was only noticed after the attack. After it was observed that the crew abandoned ship in lifeboats, the U-boat fired at 16.00 hours a coup de grâce which was a dud and at 16.03 and 16.26 hours two torpedoes that hit in a hold and the engine room and settled slowly. Because the ship remained afloat another torpedo was fired at 17.27 hours, which also was a dud but when the U-boat surfaced two hours later after reloading the torpedo tubes the ship was not longer visible.

Aboard the Venezuela were eight passengers from the Finnish motor merchant Caroline Thordén, which had been sunk by German He115 aircraft of KFlGr 706 near the Faroe Islands on 26 March.