By Sabrina Valle and Rami Ayyub
WASHINGTON (Reuters) -The United States on Tuesday imposed sanctions on Guyanese mining magnate Nazar Mohamed and his son Azruddin over allegations they defrauded Guyana’s government of tax revenues and bribed public officials, the Treasury Department said.
A company owned by the Mohameds was formerly part of a consortium building a $300 million logistics base in the South American country for oil giant Exxon Mobil Corp, but their company pulled out after Reuters reported the pair was facing criminal probes by U.S. law enforcement agencies.
The sanctions target three of the men’s companies – Mohamed’s Enterprise, Hadi’s World and Team Mohamed’s Racing team – as well as a Guyanese government official, Mae Thomas, who the U.S. Treasury described as the country’s Permanent Secretary of the Ministry of Labor.
U.S. Treasury Department official Brian Nelson said the action aimed to disrupt “those who seek to exploit Guyana’s underdeveloped gold sector for personal gain.”
The sanctions were enforced by the Office of Foreign Assets Control (OFAC), which is part of the U.S. Department of the Treasury, and is the body responsible for applying economic and trade sanctions. It blocks U.S. companies from doing business with sanctioned parties.
The Treasury designation did not mention Exxon or its shore base contract.
Exxon said its contract is with a consortium of businesses of which Mohamed Enterprise has not been a part of since last year.
“ExxonMobil complies with all applicable laws and regulations where we operate,” it said in a statement. “Any assertion to the contrary is ridiculous.”
Guyana’s government said on Tuesday it was seeking additional information from the United States about the sanctions, and had put Thomas on leave.
The Mohameds did not immediately reply to request for comments, but have previously denied any wrongdoing.
US PROBE
U.S. government officials had warned Exxon in late 2021 and early 2022 to avoid doing business with the Mohameds as they faced U.S. investigations into money laundering, drug trafficking and gold smuggling, Reuters reported last year, citing five people with knowledge of the matter.
The Texas-based oil giant nonetheless announced a deal in April 2022 to award the contract for the logistics base to a consortium that included the two Guyanese businessmen.
The Mohameds exited the consortium in October 2023.
The decision to leave the contract was voluntary and exclusively made by the Mohameds and their two Guyanese partners in the Vreed-en-Hoop Shore Base Inc (VESHI), the entity uniting the three Guyanese parties, NRG Holdings, said in October.
VESHI and NRG declined to comment. NRG said the shorebase, designed to support Exxon’s offshore activities, should be inaugurated by the end of the year. The base was initially set to open last year.
U.S. individuals and companies are prohibited from doing business with individuals and entities on Treasury’s sanctions list, and must perform due diligence to ensure their customers, suppliers and partners are not listed parties.
Violating the sanctions can result in fines and criminal charges.
Between 2019 and 2023, Mohamed’s Enterprise omitted more than 10 thousand kilograms of gold from import and export declarations and avoided paying more than $50 million in duty taxes to the Government of Guyana, the U.S. Treasury said.
The U.S. said that Azruddin and Mohamed’s Enterprise had engaged in extensive bribery schemes involving government officials in Guyana. This includes providing direct and recurring bribery payments to Guyanese government officials to ensure favorable treatment, including award of government contracts, according to sanctions.
Mohamed’s Enterprise had mostly focused on gold mining and foreign currency exchange before expanding into the oil business in recent years and securing a part in the lucrative deal with Exxon.
(Reporting by Sabrina Valle in Houston and Rami Ayyub in Washington; editing by Susan Heavey)
