New US sanctions target Venezuelan food subsidy scam

The United States has imposed sanctions on 10 individuals and 13 groups in a food subsidy scheme that lined the pockets of Venezuelan President Nicolas Maduro, his stepsons and others, as ordinary people in Venezuela suffered from food shortages that are still ongoing.

The US Department of the Treasury said that Alex Nain Saab, a citizen of Colombia, orchestrated a vast corruption network for importing and distributing food in Venezuela. He profited from overvalued contracts, including the government’s food subsidy programme. 

Saab bribed Maduro’s three stepsons to win no-bid, overvalued government contracts, the Treasury added.

“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.

“[The] 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.

Mnuchin said Maduro’s government uses “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”.

‘Reaped substantial profits’

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

That government programme is called “Los Comites Locales de Abastecimiento y Produccion” (the Local Committees for Supply and Production) and is commonly known as CLAP.

“Saab reaped substantial profits and imported only a fraction of the food needed for the CLAP program,” said the Treasury, which added that the individuals sanctioned – including Maduro stepsons Walter, Yosser and Yoswal Gavidia – enriched themselves through government contracts.

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

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