-says Guyana cheated of US$50m in gold taxes
The United States Department of The Treasury yesterday imposed sanctions on businessmen Nazar Mohamed and son, Azruddin Mohamed over the alleged massive smuggling of gold and Permanent Secretary in the Ministry of Labour, Mae Toussaint Jr Thomas, was cited for alleged corruption leading to her being immediately sent on leave by the government here.
Allegations against the Mohameds include defrauding the government here of some US$50 million in taxes from smuggled gold, as well as bribing public officials.
For Toussaint Jr Thomas’s part, it said that she used her office while serving at the Ministry of Home Affairs, to offer benefits to the Mohameds that included contracts, licences for weapons, and passports.
Up to press time, neither the Mohameds nor Toussaint Jr Thomas had said anything though they had previously denied involvement in illegalities following varying allegations.
The Office of Foreign Assets Control (OFAC) – a financial intelligence and enforcement agency of the US Treasury Department – designated Azruddin Mohamed and Mohamed’s Enterprise “for being persons who have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery, that is conducted by a foreign person.”
OFAC also designated Nazar Mohamed as being “a foreign person who is or has been a leader or official of Mohamed’s Enterprise, an entity whose property and interests in property are blocked pursuant to E.O. 13818, as a result of activities related to Nazar’s tenure.”
As for Toussaint Jr Thomas, OFAC designated her as being “a foreign person who is a current or former government official, or a person acting for or on behalf of such an official, who is responsible for or complicit in, or has directly or indirectly engaged in, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.”
The Mohameds yesterday declined Stabroek News’ request for a response.
Government yesterday issued a statement informing that Toussaint Jr Thomas had been sent on leave with immediate effect while it gathers more information.
“Based on the information referenced in the press release, the Ministry of Finance and relevant statutory agencies including the Guyana Revenue Authority, will be requesting additional information on the matters highlighted, with a view to aiding local law enforcement agencies. The Government of Guyana takes very seriously the claims contained in the press release and will continue to engage relevant United States entities on these matters. In the meantime, the Permanent Secretary of the Ministry of Labour, Ms. Mae Thomas has been sent on leave with immediate effect,” the statement from Government said.
“The Government of Guyana will continue to work with the United States government on all matters of mutual interest, including the respect for the rule of law and order,” it added.
Global Magnisky Sanctions Program
It was the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) that instituted the sanctions, as it referenced the Global Magnisky Program, part of that country’s law that authorises the US government to sanction foreign government officials worldwide that are human rights offenders, freeze their assets, and ban them from entering the US.
OFAC states that it is responsible for developing and implementing foreign policy-related sanctions adopted to counter threats to national security posed by particular activities and countries and plays a primary role in administering and enforcing many US sanctions programmes.
In coordination with the US Department of State, OFAC issues licences, where appropriate, for a variety of goods, services and transactions.
“Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned members of one of Guyana’s wealthiest families, Nazar Mohamed (Nazar) and his son, Azruddin Mohamed (Azruddin), their company, Mohamed’s Enterprise, and a Guyanese government official, Mae Thomas (Thomas), for their roles in public corruption in Guyana,” a statement from the USDT said.
“Additionally, OFAC designated two other entities, Hadi’s World and Team Mohamed’s Racing Team, for being owned or controlled by Mohamed’s Enterprise and Azruddin, respectively. These individuals and entities are sanctioned pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world,” it added.
Now that the trio are under sanctions, all property and interests in property belonging to them that are in the United States or in the possession or control of US persons are blocked and must be reported to the Treasury Department.
And if they have more than 50 per cent interest in any other company, then those entities fall under the same sanctioning regime.
United States citizens and companies are now also prohibited from doing any transactions with the trio along with financial institutions globally, as they expose themselves for similar sanctions.
Will continue
US Treasury Department Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson, said that the federal body’s actions was evidence that it was committed to holding accountable, those who seek to exploit this country’s “underdeveloped gold sector for personal gain. “Treasury, in close coordination with our partners in US law enforcement, will continue to take action to safeguard the US financial system from abuse by corrupt actors,” he added.
The release said that yesterday’s actions culminated after joint coordination conducted by a number of agencies that included Homeland Security Investigations, New York Organized Crime Drug Enforcement Task Force (OCDETF) Strike Force, Diplomatic Security Service, Customs and Border Protection (CBP) Office of Intelligence – New York Operations, and the Federal Bureau of Investigation’s Miami Field Office, with assistance from HSI Miami, CBP Miami, and New York Field Offices, New York City Police Department Intelligence Bureau, and the Drug Enforcement Administration.
Delving into the background for the sanctions related to gold smuggling, the Treasury Department said that while gold is one of Guyana’s main exports, it remains a highly fractured industry with small-scale gold mining operations in Guyana occupying a majority share of the country’s gold production.
It pointed out that the small-scale miners have informal relationships with larger purchasers and traders like the Mohameds and their company Mohamed’s Enterprise, while noting that this country’s gold is sold and traded globally.
2019 to 2023
The senior Mohamed is the founder of Mohamed’s Enterprise in Guyana before expanding to the United States as a moneychanger and transitioned into gold trading, the statement said. It noted that the junior Mohamed ultimately took over Mohamed’s Enterprise, which also now does business as “Confidential Cambio.”
The Department of Treasury pointed to the period 2019-2023, as it made the claim that an astounding US$50 million in tax evasion schemes by the Mohameds from their non-declaration of some 10,000 kilogrammes of gold.
“Azruddin and Mohamed’s Enterprise evaded Guyana’s tax on gold exports and defrauded the Guyanese government of tax revenues by underdeclaring their gold exports to Guyanese authorities. 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 [US]$50 million in duty taxes to the Government of Guyana,” the statement contends.
Bribery was also highlighted as a key mechanism in the non-declaration schemes.
“Mohamed’s Enterprise has bribed customs officials to falsify import and export documents, as well as to facilitate illicit gold shipments. Mohamed’s Enterprise had paid bribes to Guyanese government officials to ensure the undisrupted flow of inbound and outbound personnel that move currency and other items on behalf of Azruddin and Mohamed’s Enterprise,” the statement noted.
In a separate statement, the US Department of State repeated the findings of the US Treasury Department.
In 2019 the APNU+AFC government faced a No-Confidence Motion after which it was voted out of office in 2020. It would mean that the majority of the corruption allegations pertained to the PPP/C’s tenure in office.
There has been no word by this country’s taxes collection body, Guyana Revenue Authority, or the Guyana Police Force, involving any respective tax evasion or corruption practices of the Mohameds or the Permanent Secretary.
Reuters had last year July, reported that the Mohameds were the subject of a US investigation on suspicion of money laundering, drug trafficking, and gold smuggling, and that US government officials had repeatedly warned ExxonMobil to avoid doing business with the men and their businesses here.
According to the report, US officials were considering imposing sanctions on the Mohameds and that it could require ExxonMobil to sever its business relationship with any sanctioned individuals or companies.
The Mohameds denied the explosive claim with the elder Mohamed telling Stabroek News that the report was false and just a “regurgitating of another article that had been written that had no merit.”
He had later issued a statement further explaining his position while stating that they maintain their “challenge to Reuters to produce any information to support that these allegations were of any substance.
The local consortium, NRG Holdings Incorporated (NRG), which the Mohameds were a part of, and which had the year before inked a pact with ExxonMobil for a US$300 million shore base at Vreed-en-Hoop to support the US oil major’s works here, has said that the company treated the report as just allegations.
In August of last year, President Irfaan Ali said his government has not received any notification from the US authorities that the businessman, who had provided support to him during the 2020 Elections and for whom he said was his friend, were under investigation.
Many allegations
“There are many allegations. I have never received officially, in writing or verbally any request from anyone or any suggestion from any one, and I said this to Reuters, and they asked a very specific question, whether the United States of America, State Department, ever requested anything about the individual Mr. Mohamed or whether I was ever informed of anything illegal, neither of the two has occurred, it was never raised with me, so I can’t comment on something that was never raised with me, I cannot comment on something that was never brought to my attention,” Ali had said.
Two months after Ali’s statement, Mohameds’ company, Hadi’s World Incorporated pulled out of the shore base investment and sold its shares to the other partners, a decision, Mohammed had told this newspaper was based on personal religious beliefs.
“It has nothing to do with Reuters and was a decision made by me since before the Reuters article, because of Islamic rules as it relates to borrowing and interest,” he had said.
“I can confirm that, yes, we have sold our shares to our partners…,” he noted.
Of note was that in April of last year Nazar Mohamed has secured the Washington DC public relations and lobbying firm, Barbour Griffith & Rogers [BGR], to investigate why he has been blocked for more than a decade from securing a US non-immigrant visa.
The 70-year-old Mohamed had told this newspaper that hiring the public relations and lobbying firm was not only about obtaining his visa, but to also show the public that he has nothing to hide, having come from humble beginnings and legitimately building his business through currency trading, real estate, gold mining, and trading.
He said that he was “not involved in any scampish business” and that after decades of hard work, he could not no longer sit aside and have his competitors bring his character into disrepute in his old age, having noticed that rumours surrounding his businesses had begun escalating.
For over 50 years, Mohamed said that he worked tirelessly. “I worked very hard. I started suitcase trading… building from that I went into business and bought one place then another… then into currency trading, gold mining and buying…,” he said while emphasising that while people now see the wealth he created, many are not aware of the hard labour he put in to build his companies to what they are today.
Speculation
That very month, Permanent Secretary Toussaint Jr Thomas, while in transit to China through the US, was stopped for a secondary inspection at Miami International Airport and her cellphone seized. Her US visa was also revoked but news of the check and visa revocation did not come from government, as it was only after this newspaper had reported it that government broke its silence. Sources close to the government had said that Toussaint Jr Thomas was carrying around the equivalent of US$9,000 when she was questioned by the authorities in the US. She then continued on to China.
When Toussaint Jr Thomas broke her silence weeks after the incident, she did not provide any significant details on why the United States Customs and Border Protection (CBP) had taken her phone. She said that the phone was seized on April 8 and she was notified of her visa revocation two days later and pointed out that there was speculation regarding her stop.
“I wish to refer to speculation, both in the print and social media, about my interface recently with US immigration officials at Miami International Airport on April 8, 2023. Most of what has been reported is erroneous. I wish to clarify that I was referred for a ‘routine secondary check.’ There was a misunderstanding over my official cell phone without me being able to advise my officials. I advised that the cellphone be sent to the Minister of Home Affairs, Honorable Robeson Benn in Guyana,” Thomas had said in a statement.
“Thereafter, I was allowed the choice of entering the United States of America or continuing on my journey- which last I opted to so do. Subsequently, during my return journey I was advised that my US visa was revoked on the 10th April, 2023 and that I would have to make alternative arrangements to return to Guyana,” the statement added.
She said that she remained “open to engaging with US authorities on any possible travel arrangements to the USA in the future.”
The Treasury Department said that to conceal their illegal activity and operate with impunity, Azruddin and Mohamed’s Enterprise 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 in criminal or civil matters that would otherwise suggest their involvement in illegal criminal activity. In return, corrupt officials receive cash and gifts for incidents that are overlooked. Additionally, Mohamed’s Enterprise has paid bribes to corrupt Guyanese government officials to facilitate the award of government contracts,” it added while naming Thomas.
“One such official, Mae Thomas, was the Permanent Secretary to Guyana’s Minister of Home Affairs from October 2020 through August 2023, and is the current Permanent Secretary of the Ministry of Labour. A corrupt Permanent Secretary could manipulate procurement processes to suit their preferred bidder by providing inside information at the early stages of evaluation. Access to a Permanent Secretary of any Ministry could afford contractors insight into upcoming projects and bid values. Permanent Secretaries can act as the legal authority to sign contracts on behalf of their ministry,” the statement said.
Further, it added, “While Permanent Secretary to Guyana’s Minister of Home Affairs, Thomas used her position to offer benefits to Mohamed’s Enterprise and Azruddin, among others, in exchange for cash payments and high-value gifts. Thomas misused her position to influence the award of official contract bids and the approval processes for weapons permits and passports on behalf of Mohamed’s Enterprise.”
Toussaint Jr Thomas was the Permanent Secretary in 2021 at the time a $648 million contract was awarded to the Mohameds for the construction of the new Guyana Fire Service Headquarters on Home Stretch Avenue, in Georgetown.
After her run-in at the Miami International Airport, she was transferred to the Ministry of Labour as Permanent Secretary. Last month, Toussaint Jr Thomas was elected as one of five non-voting members on the PPP’s central committee.
Her listing by OFAC could have severe implications for how the government is perceived here given swirling allegations over corruption and also for the country’s anti-money laundering and anti-corruption ratings.
