Alex Nain Saab Moránis is a Colombian businessman who illicitly obtained money from multiple millionaire contracts with the Venezuelan government. Saab was involved in two government-funded programs: Gran Misión Vivienda Venezuela, which was designed to build houses for the poor in Venezuela and Comité Local de Abastecimiento y Producción, “the CLAP program,”¹ for delivering food to low-income families.

Gran Misión Vivienda Venezuela

Through Gran Misión Vivienda Venezuela, Saab was in charge of importing prefabricated materials to construct houses from Ecuador to Venezuela. The number of houses built was lower than planned, and the houses were built with poor quality materials purchased at very low prices. However, the invoices showed a much higher price. To achieve this goal, Saab bribed many government officials from different government agencies: Comisión de Administración de Divisas (CADIVI), Servicio Nacional Integrado de Administración Aduanera y Tributaria (SENIAT) and Guardia Nacional Bolivariana.

Saab and his accomplices took photos of the same construction material, but in different places, to pretend that there were different purchases. In other words, they had several false invoices but only one purchase of construction materials. Through several false invoices and by showing photos of different materials, Saab obtained the foreign exchange that CADIVI granted and the SENIAT authorization to purchase those materials. SENIAT is a government agency that is responsible for authorizing imports of products; it also manages tax payments for products that are purchased inside and outside of the country.²

The CLAP program

The other way to obtain illicit money was through the CLAP program (local supply and production committees). Saab used this program to buy and import low-quality, low-nutrient food to be delivered to Venezuelan families. However, many people who live outside of Venezuela do not know that the CLAP program offers boxes with food, but these are not free. The government sells these to families, and they need to pay in advance to have the box delivered to each family within a community. These boxes contain pasta, rice, flour, canned sardines and oil from unknown brands. The CLAP program had several contractors, including Saab, who took advantage of the program to launder a lot of money by purchasing low-quality food at inflated prices. The food was stored in a shell company called Group Grand Limited, S.A. of C.V., which is registered in Mexico and serves as a storage location for imported food, including the CLAP program boxes that are sent to Venezuela.³

Building the scheme

In 2010, Alex Saab met Nicolás Maduro when he was the foreign minister of Venezuela through Piedad Córdoba, a former Colombian senator.⁴ In 2011, during a majestic event held in Caracas, the former President of Colombia Juan Manuel Santos and the late President of Venezuela Hugo Chávez signed an agreement for the construction of houses, and it was there that Alex Saab received 530 million dollars for the Gran Misión Vivienda Venezuela program. Chávez created this program that same year.⁵

CADIVI authorized approximately 408.8 million dollars, which arrived at the Banco Central del Ecuador and from there, the money was sent to the accounts of the Fondo Global de Construcción (Foglocons) in the Banco Amazonas, Banco del Austro, Banco del Pacífico and Banco Territorial. Subsequently, Foglocons transferred a good amount of money to the U.S., and a total of 56.3 million dollars was distributed through transfers between various recipients, such as Financiera de Panamá, a company in Peru, an American firm related to health, various individual accounts and the account of Foglocons’ lawyer, Jorge Zavala Egas.⁶ Foglocons also made millionaire transfers to Miguel Angel Loor Centeno, president of the professional soccer league of Ecuador, while he was a representative of the company Prymera Asesores, S.A. from Panama.⁷

On some occasions, Foglocons asked CADIVI that part of the approved money be sent to other recipients, such as the North International Bank in Antigua and Barbuda, Saab’s accounts in Switzerland and the Global Bank of Commerce in Antigua and Barbuda. Saab’s ex-wife, Cynthia Certain, received 150,000 dollars from these transfers in a bank account in Panama.⁸
On the other hand, ELM Import also made a transfer of 159 million dollars to Foglocons.⁹

After the death of Hugo Chávez in 2013, Maduro won the Venezuelan presidency and continues with the dictatorial regime and the creation of programs to supposedly help the poorest. In 2016, Maduro created the CLAP program to ensure families have access to food.¹⁰ This program also served Saab to launder money through the use of foreign currency that CADIVI granted to buy and import food required for that program. It is estimated that Saab laundered approximately 350 million dollars with the CLAP program alone.¹¹

Through Gran Limited Group and the Government of the Táchira State—directed by José Gregorio Vielma Mora at that time—Alex Saab requested dollars to import food products for the CLAP program. In 2016, the Maduro government approved 340 million dollars to the Group Grand Limited, which is led by Alex Saab and contributed by Fondo de Desarrollo Nacional (FONDEN), a government agency dedicated to guarding and managing the resources allocated for investment projects. In 2017, Corporación Venezolana de Comercio Exterior (Corpovex) transferred 425 million dollars to the Group Grand Limited¹²

Group Grand Limited is a company managed by Alex Saab and is registered in Mexico and Hong Kong. Saab used this company to buy food packages from the Mexican company Jaifar Comercial. On March 2, 2017, Group Grand Limited transferred 5.5 million dollars to Jaifar Comercial from the Global Bank of Commerce of Antigua and Barbuda to Banco del Bajío in Mexico, a transaction that was registered as suspicious and included in the DEN-UIF-40-2018 complaint. Subsequently, the Mexican Financial Intelligence Unit filed a complaint against Saab’s companies with the prosecutor's office in Mexico for selling overpriced, poor-quality food for the CLAP program.

In July 2017, Group Grand Limited signed another agreement with Corpovex for approximately 425 million dollars. Shortly after, the company signed two more agreements for 154.4 million dollars to import medicines from India.¹³

On April 6, 2018, Group Grand Limited issued a letter signed by Andreína Fuentes Mazzei to the president of the Venezuelan Foreign Trade Corporation (Corpovex), Giuseppe Yoffreda Yorio, major general of aviation, requesting the “cession of financial rights corresponding to contract number CPVX-CJ-CONT-0086-2017” in favor of Mulberry Proje Yatirim Anonim Sirketi in Istanbul, Turkey. Fuentes Mazzei was the legal representative of Group Grand Limited and also served for several years as an executive of Global Construction Fund in Caracas, which has offices in Colombia, Spain, Ecuador and Malta. In the registration documents of Group Grand Limited and Fondo Global de Construcción, the contact address is registered in Caracas.

On the other hand, Mulberry Proje Yatirim Anonim Sirketi was registered on May 7, 2015 and although it is registered in Istanbul, the contact telephone number that appears on the registration papers is from Caracas. According to Panjiva, a company specializing in international trade, Mulberry Proje Yatirim Anonim Sirketi has the same role as Group Grand Limited, which imported food purchased from the Mexican companies Rice & Beans or El Sardinero into Venezuela. Between 2016 and 2017, the company El Sardinero issued "tax invoices" in the name of Group Grand Limited for almost 240 million dollars. One document reads: "From April 2016 to August 2017, Group Grand Limited sent international transfers from Hong Kong to five different companies in Mexico." That document highlights a company called Asasi Food FZE, based in the United Arab Emirates (UAE), that bought food from El Sardinero, Molinos de Azteca de Chalco and Grupo Brandon, which they later sold to the Venezuelan government. Grupo Brandon is the main supplier of powdered milk contained in CLAP program boxes. However, it is an unknown company in the dairy industry, but it is known for selling products with nutritional deficiencies, which was verified by the Institute of Food Science and Technology of the Central University of Venezuela at the request of ArmandoInfo.¹⁴ Between 2017 and 2018, Asasi Food FZE, which moves money through Banco Noor Capital PSC, signed contracts with Corpovex for almost 550 million euros.¹⁵

Even though Mulberry Proje Yatirim Anonim Sirketi is a Turkish company and Asasi Food FZE is from the UAE, they buy food in Mexico and then sell it to the Venezuelan government, just like Group Grand Limited did in 2017.¹⁶

Diagrams 1 and 2 illustrate Alex Saab's money laundering scheme through the Venezuelan government programs Gran Misión Vivienda Venezuela and the CLAP program, respectively.

Red flags

The red flags of this case are listed in the following table, which were very evident, but with the help of the President of Venezuela and other heavyweight accomplices, Saab was able to carry out his transactions without fear of being identified as a money launderer by financial crime professionals.¹⁷

Countering money laundering schemes

Since there are not many works on how governmental programs would be used by money launderers and the influence of corruption, there is a lack of awareness by law enforcement, regulatory bodies and financial as well as nonfinancial industries on how to counter these types of money laundering activities in countries that have an ongoing corruption problem. This list of red flags would be helpful for the financial crime industry for the detection of dirty money generated through governmental programs. If the financial crime industry keeps the corrupted political leaders’ contractors under the radar, money laundering behavior would be easily detected.

Conclusion

In our daily life, we have seen the news that many corrupted political leaders announced several governments projects that would be ready to be contracted through private companies. Also, seeing that a few contractors are robbing money from people in conjunction with the corrupted leaders through governmental programs. With the help of this specific case, public and private financial crime fighters would increase their awareness about how government programs have been used for money laundering purposes in recent decades. An important recommendation for these professionals would be to build a list of government contractors in those countries with well-known corrupted political leaders.

Musa Tuzuner, Ph.D., CAMS-RM, director, Anti-Money Laundering Program, associate professor, Gannon University, tuzuner002@gannon.edu

Dr. Yliana Díaz Campos, M.D., criminologist, yliana.diaz@jjay.cuny.edu

1. “Five Individuals Charged with Money Launderingin Connection with Alleged Venezuela Bribery Scheme,” U.S. Department of Justice, October 21, 2021, https://www.justice.gov/opa/pr/five-individuals-charged-money-laundering-connection-alleged-venezuela-bribery-scheme; Juan Diego Quesada and Florantonia Singer,“Alex Saab, un empresario de oro entre los escombros,” El Pais, October 16, 2021, https://elpais.com/internacional/2021-09-09/alex-saab-un-empresario-de-oro-entre-los-escombros.html; Moises Rendon,“Corruption in Venezuela: The Alex Saab Case,” Center for Strategic and International Studies, June 24, 2020, https://www.csis.org/analysis/corruption-venezuela-alex-saab-case
2. Ibid.;“SENIAT,” Gobierno Bolivariano de Venezuela, http://declaraciones.seniat.gob.ve/portal/page/portal/MANEJADOR_CONTENIDO_SENIAT/04ADUANAS/index.html
3. “United States of America vs Alex Nain Saab Moran, and Alvaro Pulido Vargas, a/k/a ‘German Enrique RubioSalas,’ Defendants,” U.S. Department of Justice, July 25, 2019, https://www.justice.gov/criminal-fraud/file/1226501/download
4. Gerardo Reyes, “Alex Saab: La verdad sobre el empresario que se hizo multimillonario a la sombra de Nicolas Maduro,” Planeta, January 1, 2021.
5. Ibid.
6. Ibid.
7. “La relación del abogado Miguel Ángel Loor Centeno con las transacciones ilícitas de Alex Saab en Ecuador,” Prensa America, January 27, 2022,https://nuevaprensaamerica.com/2022/01/la-relacion-del-abogado-miguel-angel-loor-centeno-con-las-transacciones-ilicitas-de-alex-saab-en-ecuador/
8. Roberto Deniz, “Un huracán de dólares de Alex Saab se formó sobre Antigua,” Armando.Info, September 20, 2020, https://armando.info/un-huracan-de-dolares-de-alex-saab-se-formo-sobre-antigua/
9. “Los empresarios de las Casas prefabricadas: ‘Todos los organismos estuvieron al tanto de lo que se iba a hacer’,” Armando.Info, May 3, 2015, https://armando.info/los-empresarios-de-las-casas-prefabricadas-todos-los-organismos-estuvieron-al-tanto-de-lo-que-se-iba-a-hacer/
10. Hector Rivas, “Los CLAP, celebran 5 años del sistema popular de distribución de alimentos Y de combate antiimperialista,” Gobierno Bolivariano de Venezuela,March 12, 2021,http://www.mppef.gob.ve/especial-los-clap-celebran-5-anos-del-sistema-popular-de-distribucion-de-alimentos-y-de-combate-antiimperialista/;Ibid.
11. Ibid.;“Alex Saab,” InSight Crime,October 18, 2021, https://insightcrime.org/venezuela-organized-crime-news/alex-saab/;Deanne L. Reuter, “Colombian Businessman Charged with Money Laundering Extradited to the United States from Cabo Verde,” Drug Enforcement Administration,October 19, 2021,https://www.dea.gov/press-releases/2021/10/19/colombian-businessman-charged-money-laundering-extradited-united-states
12. Roberto Deniz, “Empresarios cuestionados en Ecuador Y EEUU Le venden comida al gobierno venezolano,” Armando.Info, April 23, 2017, https://armando.info/empresarios-cuestionados-en-ecuador-y-eeuu-le-venden-comida-al-gobierno-venezolano/; Ibid.
13. Ibid.
14. Roberto Deniz, “Los negocios de importación para los clap florecen hasta en Emiratos Árabes Unidos,” ArmandoInfo, September 16, 2018, https://armando.info/los-negocios-de-importacion-para-los-clap-florecen-hasta-en-emiratos-arabes-unidos/
15. “Miguel Silva Perez, Jorge Wurms Forero Y Copa entre empresarios Y compañías Que catapultaron en Panama los negocios del colombiano Alex Saab, Hoy procesado en Estados Unidos POR conspirar para blanquear dinero venezolano,” A Writer with Freedom, December 12, 2021,https://awriterwithfreedom.com/panama/miguel-silva-perez-jorge-wurms-forero-y-copa-entre-empresarios-y-companias-que-catapultaron-en-panama-los-negocios-del-colombiano-alex-saab-hoy-procesado-en-estados-unidos-por-conspirar-para-blanque/
16. Roberto Deniz, “Import businesses for claps flourish even in the United Arab Emirates,” Armando.Info, September 16, 2018, https://armando.info/en/import-businesses-for-claps-flourish-even-in-the-united-arab-emirates/
17. Ibid.