The U.S. Treasury Department in a statement said it slapped sanctions on four companies connected to the Wagner Group and its leader, Yevgeny Prigozhin, and said the illicit gold dealings fund the militia to sustain and expand its armed forces, including in Ukraine and some countries in Africa.
"The Wagner Group funds its brutal operations in part by exploiting natural resources in countries like the Central African Republic and Mali. The United States will continue to target the Wagner Group’s revenue streams to degrade its expansion and violence in Africa, Ukraine, and anywhere else," the Treasury's Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, said in the statement.
The Wagner Group did not immediately respond to the U.S. allegations.
The U.S. State Department ahead of the announcement said that the action against Wagner was unrelated to an aborted mutiny last weekend.
State Department spokesman Matthew Miller, previewing the sanctions earlier Tuesday, renewed his criticism of the Wagner mercenaries, who have been accused of wide abuses in Africa.
"We believe that everywhere that Wagner goes, they bring death and destruction in their wake. They hurt local populations, they extract minerals and extract money from the communities where they operate," Miller told reporters.
"And so we would continue to urge governments in Africa and elsewhere to cease any cooperation with Wagner," he said.
On Tuesday, Russian President Vladimir Putin told soldiers from the Russian army that he had always respected Wagner's fighters, but the fact was the group had been "fully financed" from the state budget.
Wagner has fought in Libya, Syria, the Central African Republic, Mali and other countries, and has fought the bloodiest battles of the 16-month war in Ukraine. It was founded in 2014 after Russia annexed Ukraine's Crimea peninsula and started supporting pro-Russia separatists in Ukraine's eastern Donbas region.
Central African Republic-based Midas Ressources SARLU and Diamville SAU, Dubai-based Industrial Resources General Trading and Russia-based Limited Liability Company DM were hit with sanctions in Tuesday's action.
The United States also issued an advisory highlighting risks raised by gold trade in sub-Saharan Africa and encouraging industry participants to strengthen due diligence practices "in light of increasingly concerning reporting related to the role of illicit actors in the gold trade, including the Wagner Group."
Washington also imposed sanctions on Andrey Nikolayevich Ivanov, a Russian national the Treasury accused of being an executive in the Wagner Group and said worked closely with senior Malian officials on weapons deals, mining concerns and other Wagner activities in the country.
Russia's embassy in Washington and Industrial Resources did not immediately respond to requests for comment. Reuters could not immediately reach a spokesperson for Midas Ressources, Diamville or Limited Liability Company DM.
Information for this report came from Reuters and Agence France-Presse.