Business partners of Álex Saab – an accused money launderer and ally of Venezuela President Nicolás Maduro – have been indicted by US prosecutors on charges of being part of a multi-million dollar graft scheme in which Venezuelan officials got kickbacks for overpriced food and medicine contracts.
The five people charged in the indictment -- unsealed on October 21 -- include Saab’s longtime associate, Colombian businessman Alvaro Pulido, alias “Cuchi,” who was accused of laundering proceeds from Venezuela’s Local Storage and Production Committees (Locales de Abastecimiento y Producción — Clap) food and medicine aid program. Saab, who was previously charged in another corruption scheme with Pulido, is not named in the indictment. But two companies he and Pulido are alleged to have controlled received hundreds of millions of dollars, prosecutors allege, and Saab appears to be an unidentified co-conspirator in the indictment.
Also indicted was Jose Gregorio Vielma-Mora, the former governor of the Venezuelan state of Táchira, who is accused of receiving kickbacks from the scheme. Pulido’s son and Carlos Lizcano, another Colombian involved in the food business, were also charged.
SEE ALSO: Profile of Álex Saab
According to prosecutors, Vielma-Mora and two other unnamed Venezuelan government officials agreed to award food contracts to companies owned by Pulido. In October 2016, the company owned by Pulido and Saab – Hong Kong-based Grand Group Limited – was provided a contract of $340 million to import and distribute 10 million Clap food aid boxes meant for poor Venezuelans.
The boxes were purchased at the inflated price of $34 each, which allowed for Vielma-Mora and other Venezuelan government officials “to obtain millions of dollars” in kickbacks, according to prosecutors.
An associate of Pulido’s who is also indicted created dozens of shell companies and bank accounts in Antigua, the United Arab Emirates and Panama to receive the bribes. Between December 2016 and April 2018, Vielma-Mora and another co-conspirator received more than $17 million in bribes, some of it into Florida bank accounts, prosecutors allege.
In 2017, Group Grand Limited was contracted to provide an additional 10 million Clap food boxes for nearly $370 million. The company also received two contracts worth a total of about $150 million to import and distribute medicine through the Clap program, according to the indictment.
An Antigua account in the name of Group Grand Limited received nearly $34 million from Venezuela’s National Development Fund (Fondo de Desarollo Nacional – Fonden) in July 2017, prosecutors say. Between January and March 2018, an account in the United Arab Emirates held in the name of Asasi Food – another company of Saab’s and Pulido’s – received a wire transfer of $105 million from Venezuela’s economic development bank (Banco de Desarollo Economico y Social De Venezuela – Bandes). The bank also transferred 239 million euros to the UAE account between January and May of 2018.
The money was “payment on the corruptly obtained food and medicine contracts,” prosecutors said in the indictment.
After being extradited from Cabo Verde, Saab made his first appearance in front of a US federal court judge on October 18 to face money laundering charges in the separate case, in which Pulido is also charged. His arraignment has been set for Nov. 1
InSight Crime Analysis
Though Saab's involvement in corruption surrounding Venezuela’s Clap food aid program has been alleged, the indictment lays bare how government officials funneled hundreds of millions of dollars in aid to companies owned by Saab and his associates at a time when Venezuelans were suffering. It also provides a glimpse for the first time of high-level officials allegedly involved.
Though only the former governor of Táchira is charged, the indictment suggests that two of Venezuela’s top finance officials took part in the corruption scheme. The officials are unnamed, but it is clear they retained their positions until recently.
SEE ALSO: Alleged Money Launderer Álex Saab Facing US Justice Triggers Fallout from Venezuela
One is described as a high-level functionary who worked at Venezuela’s Ministry of Finance, Fonden, and Bandes between 2014 and 2020. The other is also described as a high-ranking official in the Ministry of Finance and Bandes between 2017 and 2020. It’s unclear what their roles were, exactly, but they met with Pulido, Saab and Villema-Mora to “obtain their support and approval” for the awarding of the food contracts, according to the indictment.
Also noted in the indictment – albeit in little detail – is Pulido’s and Saab’s alleged involvement in refining and selling gold on behalf of Venezuela to help the country pay off debts to foreign companies, including two of their own: Group Grand Limited and Asasi Food.