On July 23, the United States Department of the Treasury imposed sanctions on the Morón Hernández brothers, Santiago José Morón Hernández and Ricardo José Morón Hernández, for their involvement in illegal financial activities supporting the Venezuelan government. This action dealt a new blow to the funds managed by the chavista regime derived from gold and coltan in Guayana, traded through joint ventures awarded to figures linked to Nicolás Maduro and his son, Nicolás Ernesto Maduro Guerra “Nicolasito”, as well as Cilia Flores and other high-ranking officials, as reported by La Gran Aldea.
The statement indicates that the Office of Foreign Assets Control (OFAC), an agency of the Department of Treasury, sanctioned the brothers Santiago José Morón Hernández, an attorney, and Ricardo José Morón Hernández, an engineer and stockbroker, for supporting Nicolás Ernesto Maduro Guerra and the corrupt activities of members of his father’s illegitimate regime, Nicolás Maduro Moros. This measure corresponds to Executive Order (EO) 13692, as amended.
The sanctions state that the “two brothers distribute assets for Maduro and his family around the world. Maduro Guerra hired Santiago and Ricardo to conduct business on his behalf. The two brothers used various companies to carry out transactions. Additionally, Santiago serves as Maduro Guerra’s chief assistant and regularly accompanies him while Ricardo manages the operational activities.”
“Individually, Maduro Guerra, Santiago, Ricardo, and their closest allies are central figures in Venezuela’s gold industry. Maduro Guerra is accused of engaging in illicit transactions, including the sale of gold extracted in Venezuela and sent from the Central Bank of Venezuela, which was sanctioned by OFAC on April 17, 2019, under EO 13850. Santiago and Ricardo oversee the financial mechanisms of the illicit gold scheme,” states the OFAC.
“As a result of the action, all properties and interests held by these individuals that are located in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Additionally, any entity owned, directly or indirectly, by 50% or more by designated individuals is also blocked. The OFAC regulations generally prohibit all dealings by U.S. persons or within (or in transit) of the United States involving any property or interest in property of blocked or designated persons,” the statement indicates.
Friendship Business
In the mechanism set by Maduro’s government to process and market gold from the Mining Arc, six joint venture companies stand out, with part of their production going to the Central Bank of Venezuela (BCV) and another part being exported through clandestine, unreported routes to allied countries such as Iran and Turkey. These companies were created or agreed upon between the government and individuals linked to the ruling elite. One of the major operators in this network has been “Nicolasito,” and the boards of these companies include well-known friends and partners of the presidential family.
Key players in this business are the Morón Hernández brothers and the Colombian Alex Nain Saab Morán. They also have assigned frontmen such as Cilia Flores’s sons, Yoswal Alexander and Yosser Daniel Gavidia Flores, including Mario Enrique Bonilla Vallera, a fugitive from U.S. justice, and Raúl Eduardo Saavedra Leterni.
The Morón Hernández brothers hail from Maracaibo, Zulia state. They appear since 1987 alongside their father as founders of the company Cresmo. Starting in 2007, they executed projects in Fondur, Metro de Maracaibo, Ducolsa, and the Ministry of Prisons according to the National Contractor Registry (RNC) despite a history of contract failures, unfinished works, and irregularities in labor payments, with seven lawsuits in courts.
“Bonilla Vallera and Yoswal Gavidia Flores studied together at Universidad Santa María and graduated in May 2013 in the XVIII class, majoring in Audiovisual Communication. They hosted their own program on the Assembly National’s radio station 102.3 FM when it was chavista-majority, after the expropriation of the Belfort National Circuit, and shared the same circle of friends,” reports journalist Patricia Marcano from the portal Armando.info. Additionally, he worked for Cilia Flores from January 2013 at the Attorney General’s Office, according to data from the Venezuelan Institute of Social Security (IVSS) until June 2014.
Saavedra Leterni, a lawyer, is listed as a partner or legal representative in 13 out of 25 companies linked with Bonilla. “This is a business relationship that goes beyond a close friendship, and they have left their mark on social media. They have celebrated together at the birthdays of Maduro’s stepchildren and with Maduro Guerra’s own son; all contemporaries as they were born in 1990,” indicates Marcano.
Other companies are managed by a member of the United Socialist Party of Venezuela (PSUV) from Bolívar state, Eduardo José Rivas, who, despite having no background in the mining sector, appears as the president of the Domingo Sifontes Industrial Mining Complex in El Callao, with an investment of 30 million euros. He also owns Inversiones y Representaciones Glenduar, where he controls the majority of shares and is president of the Manuel Piar Complex in Puerto Ordaz. The former director of the Bolivarian National Intelligence Service (Sebin), Manuel Cristopher Figuera, stated to the portal Armando.info that Rivas “is a trusted man of Nicolasito.”
Another company, Corporación Petroglobal, was added to the Domingo Sifontes Complex, whose owners are Bonilla and Saavedra, according to a report from Armando.info.
Journalist Patricia Marcano from Armando.info details that Bonilla Vallera was identified in 2018 as a frontman for the children of Cilia in an investigation carried out in the United States by the Southern District Criminal Court under the name of “Operation Money Flight”, which traced the laundering of 1.2 billion dollars from Petróleos de Venezuela, S.A. (PDVSA); for which he was sentenced to 20 years in prison. He was declared a fugitive by U.S. justice for transferring 200 million dollars from oil funds to the stepchildren of a high-ranking Venezuelan official as part of a money laundering network.
In Search of Gold
Since late 2015, due to the collapse of the oil industry, the government under Nicolás Maduro found in gold extraction a quick way to obtain new foreign currency income.
Thus, after expropriating large tech companies like Crystallex and Gold Reserve in 2008, a new strategy began, calling for new foreign companies from countries like China, Russia, DR Congo, South Africa, Palestine, Germany, and Switzerland for projects dubbed the “Mining Motor of the Bolívar Economic Agenda”.
On February 24, 2016, Decree No. 2,248 was enacted, Official Gazette No. 40,855, which creates the National Strategic Development Zone of the Orinoco Mining Arc covering an area of 111,800 square kilometers (km2) in Bolívar state to exploit gold, iron, bauxite, coltan, diamond, manganese, and granite.
The plan is projected under the figure of joint ventures and by the end of 2016, the creation of joint ventures named: Siembra Minera, Minera Metales del Sur, Minera Ecosocialista Parguaza, and Minera Ecosocialista Oro Azul for the exploitation of coltan was formalized in the Gazette.
However, a common feature in this new plan is that Maduro’s government focused the mining of gold and diamonds in the Orinoco Mining Arc on “small scale mining” or artisanal mining. At that time, after the exit of large companies, the area had been taken over by nearly 40,000 artisanal miners. It’s a form of aggressive gold exploitation, lacking cutting-edge technologies, using materials like mercury or cyanide without environmental control mechanisms, and directly intervening with the topsoil of the forests and rivers in the region. The devastation extended even into protected areas and nature reserves.
Starting in April 2017, shipments of gold bars began to enter the vaults of the BCV from purchases made by the subsidiary of the Venezuelan Corporation of Guayana (CVG) like Minerven, which bought production from small miners through the Popular Mining Council in the Orinoco Mining Arc, and payment is done through the Economic and Social Development Bank of Venezuela (Bandes).
Of course, the most important mining companies receiving the gold material for transformation into gold bars were those created for that purpose by Maduro’s government, assigned to frontmen and friends.
Meanwhile, following the establishment of the Orinoco Mining Arc, the smaller gold miners in southern Bolívar state who operated there were subjected to gangs, military sectors, and irregular groups (FARC and ELN) that seized the area. At the same time, they began to dispute control over the deposits and extraction routes, generating anarchy with many massacres recorded in the region.
The Saab Connection
Colombian financier Alex Saab, on the verge of extradition to the U.S. from Cabo Verde, associated with the program of the Local Supply and Production Committees (CLAP), also connected through several companies to manage the gold business and other areas.
According to reports published by Armando.info, a presidential decree on July 20, 2018, officially designated Adrián Antonio Perdomo Mata (Official Gazette No. 41,472) as president of the General Mining Company of Venezuela (GVG Minerven).
A month later, on August 31, another decree by Maduro authorized the creation of Mibiturven, S.A., a binational joint venture between Minerven and a Turkish registered company named Marilyns Proje Yatirim, S.A.
Perdomo Mata served as a director of the Trading Energy and Coal (Trenaco) company registered in Caracas in October 2014 and dissolved two years later. He held the position of general deputy manager of that company, which mirrored the same-named entity in Colombia; also now liquidated.
The Venezuelan subsidiary of Trenaco and the Global Fund for Prefabricated Housing Construction, both linked to Saab’s business interests, are located in the Galipán Center and registered the same phone number with the RNC.
Journalist Roberto Deniz highlights that Perdomo Mata appears as president of Aleaciones Metálicas del Pacífico, S.A., a Panamanian company created on August 5, 2015, in which he shares management with Amir Nassar Tayupe, Saab’s lawyer in Venezuela, who represents him in a lawsuit against four journalists from Armando.info.
In August 2015, PDVSA made one of its largest tenders in recent years public: A multi-billion dollar project in the Orinoco Belt, the world’s largest crude oil reservoir; designed to bolster its declining production, according to an investigation by Reuters.
Out of nowhere, Trenaco, a small Colombia-based transport and oil trade company, without relevant experience and headquarters in Switzerland, but operated from Colombia, prevailed over major oil service companies such as Halliburton, Schlumberger, and Weatherford to secure a contract worth 4.5 billion dollars, according to a PDVSA document.
Saab never appeared on the board of Trenaco, “but a July 2016 investigation by Reuters, revealed that he was in full control of Trenaco after reviewing internal correspondence and WhatsApp audio files involving Saab,” reported Deniz.
In November 2011, Saab signed an agreement with his construction firm, based in Bogotá, called Global Fund for Construction, to build social housing in Venezuela; he even appeared on state television signing the agreement alongside Chávez and the president of Colombia, Juan Manuel Santos.
The former Colombian president clarified to the newspaper El Tiempo that “Saab never signed on behalf of Colombia. When he went to sign, the representative of that company, who was this man Alex Saab, appeared, whom we did not know. There was never any kind of agreement, any kind of arrangement with the Colombian government.”