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Treasury Targets Sanctions Evasion Network Supporting Corrupt Venezuelan Actors

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Washington – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three individuals and eight foreign entities, and identified two vessels as blocked property for their activities in or associated with a network attempting to evade United States sanctions on Venezuela’s oil sector. As the illegitimate Maduro regime has done before, the regime turned to Petroleos de Venezuela, S.A. (PdVSA), its primary conduit for corruption, and the institutions that no longer serve its people, to exploit and profit from Venezuela’s natural resources. Maduro’s oil minister and U.S.-designated Kingpin Tareck El Aissami Maddah (El Aissami) has enlisted a network of facilitators, some of whom are designated today, to orchestrate opaque schemes to broker the re-sale of over 30 million barrels of Venezuelan-origin crude oil in order to benefit from the proceeds.

“The illegitimate Maduro regime created a secret network to evade sanctions, which Treasury has now exposed,” said Deputy Secretary Justin G. Muzinich. “The United States will continue to relentlessly pursue sanctions evaders, who plunder Venezuela’s resources for personal gain at the expense of the Venezuelan people.”

Today’s action, taken pursuant to Executive Order 13850, as amended, targets primarily Mexico-based individuals and entities involved in this scheme benefitting PdVSA. Those targeted include Joaquin Leal Jimenez (Leal), Olga Maria Zepeda Esparza (Zepeda), Veronica Esparza Garcia (Esparza), Libre Abordo, S.A. de C.V. (Libre Abordo), and Schlager Business Group S. de R.L. de C.V. (Schlager Business Group), as well as additional entities that they own or control.

Since at least 2019, the illegitimate Maduro regime and PdVSA have cooperated with U.S.-designated Alex Nain Saab Moran (Saab) and Leal to evade U.S. sanctions and assist in the sale of Venezuelan-origin crude oil. One of Saab and Leal’s recent schemes to sell Venezuelan-origin crude oil was under the guise of an “oil-for-food” program that never resulted in food deliveries to Venezuela. Saab and Leal, working with Mexico-based companies Libre Abordo and Schlager Business Group, brokered the re-sale of over 30 million barrels of crude oil on behalf of PdVSA, approximately 40% of PdVSA’s oil exports in April 2020. Though Libre Abordo and Schlager Business Group claimed to have contracts with the Government of Venezuela to deliver corn and water tanker trucks to Venezuela, Libre Abordo and Schlager Business Group failed to deliver corn to Venezuela and sent approximately 500 water trucks (only half of what was contracted) at grossly inflated prices. This does not match the amount of PdVSA crude oil that was lifted and re-sold by Libre Abordo and Schlager Business Group, valued in excess of $300 million.

The exploitation of Venezuela’s natural resources, including oil, for the benefit of the illegitimate regime of President Maduro and his cronies is unacceptable. Those that facilitate such activity by engaging in illicit schemes with designated persons risk losing access to the U.S. financial system. 

MEXICO-BASED SANCTIONS EVASION NETWORK

Libre Abordo is based in Mexico City, Mexico and had no prior experience in the global oil sector before entering into an agreement with the Government of Venezuela and PdVSA. From its founding in 2010 until approximately October 2019, Libre Abordo was involved in the purchase and re-sale of cleaning supplies, hospital equipment, agricultural products, and industrial equipment, primarily in Mexico. In July 2019, it signed two contracts with the Corporacion Venezolana de Comercio Exterior S.A. (CORPOVEX), the Venezuelan government-owned corporation for foreign trade, to supply corn and tanker trucks to Venezuela. In lieu of pre-payment for the contracted corn and water trucks, Libre Abordo agreed to lift and broker the sale of Venezuelan-origin crude oil supplied by PdVSA in a scheme orchestrated by Saab and El Aissami.

After the OFAC designation of Rosneft Trading and TNK Trading International in February and March 2020, PdVSA leadership and regime oil minister El Aissami sought new intermediaries to facilitate the sale of PdVSA crude to buyers primarily located in Asia. Libre Abordo agreed with PdVSA to facilitate the re-sale of a significant amount of crude oil in a scheme to help PdVSA evade U.S. sanctions. Libre Abordo largely replicated Rosneft Trading’s operations, including by marketing Venezuelan oil to the same buyers in Asia, and using virtually the same routes and shipment processes. In January 2020, Libre Abordo and Schlager Business Group accounted for approximately three percent of PdVSA’s exports. By April 2020, that figure rose to almost 40 percent of PdVSA’s exports. Libre Abordo played a critical role in helping PdVSA liquidate a significant amount of its inventory and drain its limited oil storage facilities. As of May 31, 2020, when Libre Abordo claimed that it was bankrupt, it lifted and re-sold over 30 million barrels of Venezuelan crude oil. Libre Abordo was designated today for operating in the oil sector of the Venezuelan economy and because it has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, PdVSA.

Schlager Business Group, a Mexico City, Mexico-based affiliate of Libre Abordo, assisted the scheme by taking charge of the chartering contracts needed to lift PdVSA crude oil. Prior to its involvement in Venezuela’s oil sector, Schlager Business Group had no prior experience in the oil sector and was primarily involved in business administrative and back-office support services in Mexico. Schlager Business Group was designated today for operating in the oil sector of the Venezuelan economy and because it has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, PdVSA.

Olga Maria Zepeda Esparza (Zepeda), a Mexican national, and her mother Veronica Esparza Garcia (Esparza), co-own Libre Abordo and control Schlager Business Group. Zepeda, working with Leal and Esparza, directed Libre Abordo and Schlager Business Group’s operations, including the entities’ involvement in lifting significant volumes of PdVSA crude oil.

Zepeda and Esparza were both designated today for operating in the oil sector of the Venezuelan economy and for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, PdVSA.

Leal is the critical conduit between Libre Abordo, Schlager Business Group, and their owners, and PdVSA and Saab. Leal has been coordinating the purchase and sale of Venezuelan-origin crude oil from PdVSA and its subsidiary, PdVSA Petroleo, S.A., bringing knowledge of the global oil sector and facilitating the transport and re-sale to buyers. Leal was designated today for operating in the oil sector of the Venezuelan economy and for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, PdVSA.

DESIGNATED PERSONS INVOLVED IN OR OTHERWISE DIRECTING THE SCHEME

OFAC designated PdVSA on January 28, 2019, pursuant to E.O. 13850, as amended, for operating in the oil sector of the Venezuelan economy. 

OFAC designated Maduro on July 31, 2017, pursuant to E.O. 13692. On March 26, 2020, the U.S. Department of Justice announced a criminal indictment against Maduro in the United States District Court for the Southern District of New York on narco-terrorism and cocaine trafficking charges.

OFAC designated El Aissami on February 13, 2017, as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act (Kingpin Act) for playing a significant role in international narcotics trafficking. At the time of his designation, El Aissami was the Executive Vice President of Venezuela. On March 8, 2019, the U.S. Attorney’s Office for the Southern District of New York charged El Aissami with criminal violations of the Kingpin Act. On March 26, 2020, a superseding indictment was unsealed in the United States District Court for the Southern District of New York charging El Aissami with additional crimes relating to efforts to evade OFAC sanctions.

OFAC designated Saab on July 25, 2019 pursuant to E.O. 13850, as amended, for being responsible for or complicit in, or for directly or indirectly engaging in, a transaction or series of transactions involving deceptive practices and corruption and the Government of Venezuela or programs administered by the Government of Venezuela. Saab profits from orchestrating vast corruption networks that have enabled Maduro and his cronies to significantly profit from food imports and distribution in Venezuela. Through a sophisticated network of shell companies, business partners, and family members, Saab has laundered hundreds of millions of dollars in corruption proceeds around the world. On July 25, 2019, the U.S. Department of Justice in the United States District Court for the Southern District of Florida charged Saab with one count of conspiracy to commit money laundering and seven counts of money laundering for his alleged role in laundering the proceeds of violations of the Foreign Corrupt Practices Act in connection with a scheme to pay bribes. The indictment also alleges and seeks forfeiture in excess of $350 million representing the amount of funds involved in the violations. 

MARITIME ENTITIES AND VESSELS CONTINUING TO LIFT VENEZUELAN CRUDE OIL

Additionally, OFAC designated two entities, which loaded or otherwise held Venezuelan-origin crude from late November 2019 to May 2020, for operating in the Venezuelan oil sector, and identified two vessels owned by these entities as blocked property:

  • Delos Voyager Shipping Ltd is the registered owner of the Panamanian-flagged crude oil tanker DELOS VOYAGER (IMO 9273052).
    • DELOS VOYAGER loaded approximately 515,000 barrels of Venezuelan crude in mid-January 2020 and delivered it to Qingdao, China in February 2020. DELOS VOYAGER loaded a second cargo of 515,000 barrels at Amuay Bay in late March 2020 and delivered it to another vessel near Malaysia in mid-May 2020.
  • Romina Maritime Co Inc is the registered owner of the Liberian-flagged crude oil tanker EUROFORCE (IMO 9251585).
    • EUROFORCE loaded approximately 500,000 barrels of Venezuelan crude in mid-March 2020, and transferred the cargo to another vessel in the South China Sea in late May 2020.

Concurrent with this action, OFAC is issuing a general license that authorizes certain transactions and activities that are ordinarily incident and necessary to the wind down of transactions involving these entities and vessels through 12:01 am eastern daylight time, July 21, 2020.

ENTITIES DESIGNATED FOR BEING OWNED OR CONTROLLED BY BLOCKED PERSONS

Also designated today are four entities owned or controlled by Leal or Zepeda:

  • Cosmo Resources Pte. Ltd. (Cosmo) is a Singapore-based entity incorporated in February 2020. According to corporate records, Cosmo’s principal activities are the wholesale of crude petroleum, mineral fuels, and lubricants. Leal is the sole shareholder and a director of Cosmo. Cosmo is being designated for being owned or controlled by Leal.
  • Alel Technologies LLC (Alel) is a limited liability company incorporated in the State of Delaware managed by Leal. Alel has registrations in California and Texas, as well as an alleged business location at a residential address in Boston, Massachusetts. Alel is being designated for being owned or controlled by Leal.
  • Luzy Technologies LLC (Luzy) is a limited liability company incorporated in the State of Delaware, with an alleged business location at a residential address in Boston, Massachusetts. Luzy is being designated for being owned or controlled by Leal.
  • Washington Trading Ltd. is a United Kingdom-based limited liability company incorporated in February 2020. Zepeda is the sole shareholder and a director of Washington Trading Ltd. Washington Trading Ltd. is being designated for being owned or controlled by Zepeda.

DELISTING OF MARITIME ENTITIES

In addition to today’s designations, OFAC is delisting two companies, Afranav Maritime Ltd and Seacomber Ltd, as well as two vessels, the Athens Voyager (IMO 9337391) and the Chios I (IMO 9792187). OFAC designated the two companies on June 2, 2020, for operating in the oil sector of the Venezuelan economy. On the same date, OFAC identified the two vessels as blocked property. Following their designations, both companies have committed to enhanced risk-based sanctions compliance programs based on the model OFAC has recommended in its published guidance and pledged to cease involvement in the oil sector of the Venezuelan economy so long as the Maduro regime remains in power.

Today’s delisting action supports the statement that U.S. sanctions need not be permanent. Sanctions are intended to bring about a positive change of behavior, as identified in the case of these maritime entities. The United States has made clear that the removal of sanctions is available for individuals and entities designated under E.O. 13692 or E.O. 13850, both as amended, who, among other things, take concrete and meaningful actions to restore democratic order, refuse to take part in human rights abuses, speak out against abuses committed by the illegitimate Maduro regime, cease involvement in the oil, gold, financial, and defense and security sectors of the Venezuelan economy, or combat corruption in Venezuela.

COLLABORATION AND CONSEQUENCES

OFAC collaborated closely with U.S. Customs and Border Protection’s Miami Field Office – Tactical Analytical Unit and the U.S. Department of Energy in order to execute today’s action.

As a result of today’s action, all property and interests in property of these individuals and entities that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by the designated individuals and entities, are also blocked. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

The sanctions evasion scheme chart on individuals and entities designated today.

Identifying information on the individuals, entities, and vessels blocked today.


This translation is provided as a courtesy and only the original English source should be considered authoritative.
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