Maduro Ally in Court on Laundering Charges Amid U.S.-Venezuela Tensions
(Bloomberg) -- Colombian businessman Alex Saab, who’s charged in the U.S. with money laundering stemming from allegedly brokering crooked deals for Venezuela’s government while stealing hundreds of millions of dollars, is a flight risk who should be jailed until trial, prosecutors said.
Making his first appearance in a U.S. court since losing a drawn-out extradition battle, Saab, 49, with shoulder-length hair and wearing an orange prisoner’s jumpsuit, appeared on a video feed Monday from a jail cell. His lawyer asked for time to hold a pre-trial detention hearing.
An arraignment is scheduled for Nov. 1, according to the court docket.
Saab, a dual Colombian-Venezuelan citizen, has emerged as a key figure in the standoff between Washington and Caracas as the U.S. government goes after people once close to President Nicolas Maduro, who was charged last year in New York with narco-terrorism. The U.S. State Department is offering a $15 million reward for information leading to his arrest or conviction.
Following Saab’s extradition from Cape Verde on Saturday, Maduro’s government pulled out of negotiations with Venezuela’s American-backed political opposition, referring to the case against Saab as “a new act of aggression by the U.S.”
Saab has denied wrongdoing through lawyers and in a statement read by his wife Sunday. At Monday’s hearing he spoke through an interpreter over a phone as he sat behind a table, his legs fidgeting, only to acknowledge the name of his lawyer, Henry Bell.
The extradition of Saab and the interruption of negotiations with the opposition ahead of nationwide local elections scheduled for next month could undercut Venezuela’s ambitions to have the U.S. at least partially lift sanctions on its oil, said Fernando Ferreira, director of geopolitical risk at Rapidan Energy Advisors LLC.
“The easing of sanctions is less likely but not impossible,” Ferreira said. “I still believe that a partial lift of sanctions is possible, depending on the conditions set for next month’s election and potential concessions for opposition candidates that may be elected.”
Owner of oil reserves larger than Saudi Arabia; Venezuela, which depends on oil exports for 95% of its revenues, has struggled to sell crude since the Trump administration ratcheted up sanctions in early 2019. Production slumped by more than half in the past three years, to 527,000 barrels a day, according to OPEC.
The 2019 charges against Saab stem from his involvement with the Venezuelan government starting in 2011 under late president Hugo Chavez. Saab and his business partner Alvaro Pulido allegedly were involved in a money laundering and bribery scheme while working on a government contract to build low-income houses.
“Alex Saab engaged with Maduro insiders to run a wide scale corruption network they callously used to exploit Venezuela’s starving population,” then-U.S. Treasury Secretary Steven Mnuchin said in a statement on July 2019 after sanctioning Saab and Pulido.
Pulido couldn’t immediately be reached for comment.
Rise of Saab
Saab was detained in Cape Verde last year after the plane he was on stopped to refuel while on the way to Iran. He spent almost 500 days in jail before Cape Verdean authorities turned him over to U.S. Marshals on Saturday.
Saab rose to prominence after Venezuelan news outlet Armando Info cast light on deals he secured to supply Maduro’s flagship nationwide food program, known as Clap. Over time, his role developed into a commercial dealer for the Maduro government, providing everything from medicines to gasoline, imported from Turkey and Iran.
At the same time, Saab and Pulido allegedly transferred $350 million out of Venezuela into accounts they owned or controlled, according to the Justice Department.
At first, both Saab and the Venezuelan government denied they had a relationship. But after his arrest in Cape Verde, the Maduro government referred to Saab as a special diplomatic envoy and his attorneys based his defense on grounds of diplomatic immunity.
Maduro tried again to halt Saab’s extradition to the U.S. by appointing him to the government’s negotiation team in talks with the country’s political opposition that began in August in Mexico City. The talks, mediated by Norway, sought to end the country’s political stalemate and reach an agreement for free and fair elections.
After Saab was extradited, Maduro’s team pulled out out of the talks just as a new round of meetings was set to begin. Maduro defended Saab as a key provider of goods for the country and accused the U.S. of violating international laws by “kidnapping” and “torturing” his ally.
The case is U.S. v. Alex Nain Saab Moran, 19-cr-20450, U.S. District Court, Southern District of Florida (Miami).
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