BOGOTA, Colombia (AP) – The U.S. on Thursday imposed sanctions on a Colombian businessman and three stepsons of Venezuelan President Nicolas Maduro for allegedly forming part of a network that stole hundreds of millions in dollars from food import contracts at a time of widespread hunger in the crisis-wracked South American nation.
The network targeted by Thursday’s actions was allegedly run by Alex Saab, a businessman who has been in the radar of U.S. authorities for two years after amassing a large number of contracts with Maduro’s socialist government.
The U.S. Treasury Department alleges that Saab utilized a network of shell companies spanning the globe – the UAE, Turkey, Hong Kong, Panama and Mexico – to hide huge profits from no-bid contracts obtained through bribes.
“Saab engaged with Maduro insiders to run a wide-scale corruption network they callously used to exploit Venezuela’s starving population,” said Treasury Secretary Steven Mnuchin. “They use food as a form of social control, to reward political supporters and punish opponents, all the while pocketing hundreds of millions of dollars through a number of fraudulent schemes.”
Some of Saab’s contracts were allegedly obtained by paying bribes to Yoswal, Yosser and Walter Flores, the children of first lady Cilia Flores from a previous relationship. The three men, commonly known as Los Chamos – Venezuelan slang for “the kids” – are also under investigation by prosecutors in Miami for allegedly forming part of an scheme to siphon $1.2 billion from Venezuela’s state-owned oil company, two people familiar with the U.S. investigation told The Associated Press.
U.S. officials believe Saab’s rise began a decade ago after signing an agreement to build social housing for the Venezuelan government. In 2011, he appeared on Venezuelan state television alongside Maduro, the late President Hugo Chavez and then-Colombian President Juan Manuel Santos.
From there, he and his partner, fellow Colombian Alvaro Pulido, entered the food business through a Hong Kong-based company, Group Grand Ltd., which was among the 13 entities sanctioned Thursday. Despite having no known track record in the food business and a rudimentary webpage, the company quickly amassed hundreds of millions of dollars’ worth of contracts to import food on behalf of the government’s hallmark social program.
The imported food was used to stock so-called CLAP boxes, a Spanish acronym for Local Committees for Supply and Production, which are distributed to Venezuelans as part of Maduro’s response to an “economic war” he says is being waged by the U.S. and opponents seeking to oust him from power.
As Venezuela has fallen deeper into political and economic turmoil, the CLAP program has become a tenuous lifeline for millions of citizens suffering from shortages and hyperinflation that reached 130,000% last year. But critics accuse Maduro of essentially weaponized food, distributing the boxes primarily to government workers and supporters. The allegations have fueled calls from several Latin American governments, Canada and France for Maduro to be tried at the International Criminal Court for crimes against humanity.
As Saab and Pulido’s influence grew, they drew the attention of the Trump administration, which has made a priority of going after top Venezuelan officials where it hurts them most: their wallets.
Led by Marshall Billingslea, the assistant Treasury secretary for terrorist financing, U.S officials have spent two years pursuing the Saab-Pulido network, traveling throughout the region to gather banking and trade information from allied nations.
But even as the pressure on the two men was building, U.S. officials say their network morphed into new areas, including the import of medicine, the shipment of oil and smuggling gold from illegal mines in southern Venezuela to buyers in Europe, Africa and the Middle East.
“Alex Saab is involved in almost every dirty business in Venezuela,” said Carlos Paparoni, an opposition lawmaker who has investigated the businessman since 2017. “Today’s sanctions will help make sure that the money belonging to the Venezuelan people is never stolen again.”