Intermediaries of Venezuela’s CLAP Program Linked to Companies in Lebanon
Intermediaries of Venezuela’s CLAP Program Linked to Companies in Lebanon
A public records investigation using Sayari Graph uncovered six companies in Lebanon with names similar to known intermediaries of the Venezuelan government’s subsidized food program (CLAP).
None of the known CLAP intermediaries have been connected to criminal activity. However, their role in supplying Venezuela’s CLAP program—which itself has been associated with widespread corruption and known for supplying low-quality food—raises red flags regarding their business operations with Venezuelan government officials and the quality of food they are supplying.
Furthermore, the fact that these CLAP intermediaries appear to have links to companies in Lebanon—which is not a traditional food supplier to Venezuela—raises questions regarding the overall transparency of their operations. These links also raise questions about the role, if any, that the Lebanon-based companies could possibly be playing in supplying food to Venezuela via the CLAP program.
The Venezuelan CLAP Program
The Local Committees for Supply and Production (CLAP) program is a government-subsidized food program that began in April 2016 to combat food scarcity in Venezuela. The program consists of committees scattered across the country that are tasked with selling subsidized food boxes to registered individuals.
According to media reports, the CLAP program has been in part supplied by intermediaries operating on multiple continents. After winning a contract from the Venezuelan government, the intermediaries purchase food supplies from vendors—many of which are based in Mexico—and then ship the food to Venezuela.
However, the program has been marred by corruption reaching the highest echelons of the Venezuelan government. For example, in July and September 2019, the Office of Foreign Assets Control (OFAC) sanctioned several CLAP-affiliated companies and individuals connected to Colombian businessman Alex Nain Saab Moran. Saab allegedly profited from overvalued CLAP contracts. He also enabled Maduro to profit from the government-subsidized food program.
The Role of Hong Kong-Based Intermediaries
In April 2019, Venezuelan lawmaker Carlos Paparoni revealed that the administration of President Nicolas Maduro transferred over 52 million euros for “operations and supply costs” from the Venezuelan Economic and Social Development Bank (Bandes) in France to several Hong Kong-based companies. These companies include Jetsky Trading Limited, Shinning Capital International Limited, Luck Fortune International Trading LTD, Mass Joy Industries Limited, and Million Rise Industries Limited.
All five companies serve as intermediaries for Venezuela’s government-subsidized food program. On Mar. 22, 2019, OFAC sanctioned Bandes along with its subsidiaries for serving as “vehicles to move funds abroad in an attempt to prop up Maduro.”
Prominent Venezuelan media outlets have also uncovered other shady CLAP intermediaries, such as Panama-based FB Foods LLC and Wellsford Trading Corp, among others.
CLAP Intermediaries and Their Connections to Lebanon
An open-source investigation carried out by Sayari analysts using the Sayari Graph public records database unveiled six companies registered in Lebanon with names similar to known CLAP intermediaries. Given that these company naming conventions are uncommon in Lebanon, Sayari believes the companies are likely linked to several Hong Kong and Panama-based entities that are known intermediaries for the CLAP program.
Known CLAP intermediaries in Hong Kong and Panama include:
- FB FOODS LLC. S.A. (Panama Folio Mercantil No. 155648442)
- MASS JOY INDUSTRIES LIMITED (宏悅實業有限公司; Hong Kong CR No. 637796)
- MILLION RISE INDUSTRIES LIMITED (億升實業有限公司; Hong Kong CR No. 2559362)
- JETSKY TRADING LIMITED (捷佳行貿易有限公司; Hong Kong CR No. 2408896)
- LUCK FORTUNE INTERNATIONAL TRADING LIMITED (懿德國際貿易有限公司; Hong Kong CR No. 2300962)
- SHINNING CAPITAL INTERNATIONAL LIMITED (溢皓國際有限公司; Hong Kong CR No. 2317173)
The identified companies registered in Lebanon are:
- FB FOODS LLC. SA SAL Offshore (Lebanon Registration No: 1809455)
- MASS JOY INDUSTRIES LIMITED SAL (Offshore) ((ماس جوي اندستريز ليميتد ش م ل (اوف شور; Lebanon Registration No: 1809775)
- MILLION RISE INDUSTRIES LIMITED SAL (Offshore) ((مليون رايز اندستريز ليميتد ش م ل (اوف شور; Lebanon Registration No. 1809776)
- JETSKY TRADING LIMITED SAL (Offshore) ((جت سكي ترايدينغ ليميتد ش م ل (اوف شور; Lebanon Registration No. 1809779)
- LUCK FORTUNE INTERNATIONAL TRADING LIMITED SAL (Offshore) ((لاك فورتيون انترناشيونال ترايدينغ ليميتد ش م ل (اوف شور; Lebanon Registration No. 1809777)
- SHINNIG CAPITAL INTERNATIONAL LIMITED SAL (Offshore) ((شاينينغ كابيتال انترناشيونال ليميتد ش م ل (اوف شور; Lebanon Registration No. 1809780)
Five of the six Lebanese companies registered with the Lebanon Commercial Register on the same day, raising further questions regarding their relationships vis-à-vis each other. Mass Joy Industries Limited SAL (Offshore), Million Rise Industries SAL (Offshore), Jetsky Trading Limited SAL (Offshore), Luck Fortune International Trading Limited SAL (Offshore), and Shinnig Capital International Limited SAL (Offshore) were all registered on Feb. 4, 2019. FB Foods LLC SA SAL Offshore was registered on Mar. 21, 2018.
Several of the CLAP-related companies in Hong Kong appear to be managed and/or owned by straw owners—individuals that serve as related parties on corporate documents but who obfuscate the true beneficial owner of a company. An example of one of these placeholders is Hong Kong resident Cheung Kwok Chuen. According to a prominent Venezuelan news outlet, Chueng is believed to serve as a front man for Hong Kong-based Mass Joy Industries Limited and Million Rise Industries Limited.
A 2006 corporate filing in the Macao Corporate Registry lists Chuen as the sole shareholder at Mestre Mundo Internacional Limitada, a Macao-based company. Sayari analysts have not found a link between this company and Venezuela’s CLAP program. However, it is notable that a company called Mestre Mundo Internacional Limitada SAL (Offshore) also appears in the Lebanon corporate registry.
Furthermore, the registration date of Mestre Mundo Internacional Limitada SAL (Offshore) matches that of Mass Joy Industries Limited SAL, Million Rise Industries SAL, Jetsky Trading Limited SAL, Luck Fortune International Trading Limited SAL, and Shinnig Capital International Limited SAL—demonstrating a likely relationship between Mestre Mundo Internacional Limitada SAL (Offshore) and the aforementioned Lebanese entities.
Use of Public Records Across Jurisdictions
These findings demonstrate that CLAP intermediaries operate in several jurisdictions outside of Venezuela. While none of the previously mentioned Hong Kong and Panama companies have been tied to criminal activity, their role as intermediaries to the CLAP program raises concerns regarding their overall business relationship with Venezuelan officials.
Finally, the findings in Lebanon point to the importance of conducting investigations in jurisdictions where you might not expect to find entities linked to your target. These findings also highlight the value of using a cross-jurisdictional approach to conducting financial investigations.
Alleged ‘Pure Narco’ of Colombia’s Gulf Clan Linked to Broad Corporate Network, Luxury Real Estate Projects In Medellín
A recently arrested alleged Colombian drug trafficker connected to one of the country’s largest transnational criminal organizations is li [..]Read More
Huarong was born from one global crisis. Will it survive the next?
This article originally was published by SupChina on May 19, 2021. Perhaps no state-owned entity has received more attention this past month [..]Read More