Three of Venezuela President Nicolas Maduro's stepsons were sanctioned by the United States Thursday for their role in a scheme that profited in the millions of dollars from the country's food subsidy program. Photo: Venezuelan government/EPA EFE
July 26 (UPI) -- The U.S. Treasury Department applied sanctions against a slew of individuals and entities, including three stepsons of Venezuelan President Nicolas Maduro and a Columbian businessman, for running a "network of corruption and nepotism" to profit from the country's food subsidy program.
Announced Thursday, the sanctions target Maduro's stepsons Walter, Yosser and Yoswal, their cousin Carlos Erica Malpica Flores and Colombian Alex Nain Saab Moran for profiting from food imports intended for Venezuela's poor.
"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. "Treasury is targeting those behind Maduro's sophisticated corruption schemes, as well as the global network of shell companies that profit from the former regime's military-controlled distribution program."
Mnuchin said the program, called Local Committees for Supply and Production, or CLAP, an acronym of its Spanish name, was used by the corruption network to benefit Maduro and his family at the cost of Venezuela.
"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," he said.
The collapse of the Venezuelan economy has caused a mass exodus of some 4 million people and widespread hunger and severe food shortages in the past few years. According to a Human Rights Watch report, 80 percent of households are food insecure, two-thirds of its population had reported losing weight and almost 12 percent was undernourished.
CLAP, which was founded in 2016, was supposed to provide subsidized food ration boxes to the country's poor.
Saab, who met Maduro's three sons in 2011 after winning government contracts to build low-income housing, used his relationship with them to gain a foothold in the government and secure further lucrative contracts, including the food subsidy program.
He became involved in CLAP in 2016, and with his business partner, Alvaro Enrique Publido Vargas, concocted a scheme to acquire food from a foreign distributor and ship it to Venezuela at great profit.
"Under Maduro's watch, Saab reaped substantial profits and imported only a fraction of the food needed for the CLAP program," according to the Treasury Department.
Several shell companies were established as part of the scheme to siphon money from commercial contracts, which also made it more difficult for U.S. financial institutions to identify the corrupt businesses related to CLAP, it said.
In total, 13 entities and 10 individuals were sanctioned and all are now barred from the U.S. financial system. All properties or interest in properties residing in the United States are blocked and U.S. citizens are prohibited from all dealings with those listed.
"Today, the United States sanctioned 10 individuals, including three of Maduro's stepsons, and 13 entities, disrupting a broad corruption network that has taken food off the tables of Venezuelans for years," Secretary of State Mike Pompeo tweeted. "Venezuela deserves a government for the people not against them."
