US Government Freezes Assets of Mexican Companies Linked to Venezuelan Oil Trade

"MX" for Borderland Beat; USDT

Chart displaying the criminal network (source: USDT)

Washington – Yesterday, 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.”

This 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.

Guanajuato-native Joaquin Leal Jimenez was the lead Mexican individual sanctioned

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.

The U.S. government ID'ed the Mexican nationals and included their personal information

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.

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.