U.S. sanctions target food subsidy scam in Venezuela, charges businessman

WASHINGTON (Reuters) - The United States imposed sanctions on Thursday on 10 people and 13 groups in a Venezuelan food subsidy scheme the U.S. Treasury said lined the pockets of President Nicolas Maduro, his stepsons and others as ordinary Venezuelans suffer food shortages.

The Treasury Department said Colombian national Alex Nain Saab orchestrated a vast corruption network for food imports and distribution in Venezuela and profited from overvalued contracts, including the food subsidy programme.

Saab bribed Maduro’s three stepsons to win no-bid, overvalued government contracts, said Sigal Mandelker, undersecretary for terrorism and financial intelligence.

“Alex Saab engaged with Maduro insiders to run a wide-scale corruption network they callously used to exploit Venezuela’s starving population,” Treasury Secretary Steven Mnuchin said in a statement. 

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“Treasury is targeting those behind Maduro’s sophisticated corruption schemes, as well as the global network of shell companies that profit from” the country’s military-controlled food distribution programme, he said.

Separately, the U.S. Attorney’s Office for the Southern District of Florida said on Thursday it had charged Saab and another Colombian businessman with money laundering related to a 2011-2015 scheme to pay bribes to take advantage of Venezuela’s government-set exchange rate.

Venezuela’s Information Ministry did not immediately respond to a request for comment. Saab could not be reached for comment.

The U.S. Treasury said Saab became involved with the food subsidy programme in 2016, when he set up a corporate structure to acquire food outside the country and ship it to Venezuela.

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Saab reaped profits and imported only a fraction of the food needed for the subsidy programme, it said.

Treasury alleged the individuals hit by sanctions had enriched themselves through government contracts, including Maduro’s stepsons Walter, Yosser and Yoswal Gavidia.

Saab also began in 2018 to help the Venezuelan government liquidate gold mined in Venezuela and convert it to foreign currency, Treasury said. The gold was then flown to destinations including Turkey and the United Arab Emirates, it said.

The United States imposed sanctions on the Venezuelan gold sector last year. U.S. envoy to Venezuela Elliott Abrams estimated on Wednesday that Maduro’s government had sold roughly $1 billion in gold in 2019.

(Reporting by Doina Chiacu and Lesley Wroughton; Additional reporting by Vivian Sequera and Luc Cohen in Caracas; Editing by Tom Brown and Peter Cooney)

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