The golden rule

I know we’re all excited these days about currencies you can’t even see, but criminals are a catholic bunch: they’ll entertain any mechanism for their laundering, no matter how old-fashioned or new-fangled.  And now that he is safely (hah!) in custody, information is coming out about Mexican drug lord Joaquín “El Chapo”Guzmán overseeing the laundering of substantial amounts of criminal proceeds through gold.  Like so many modern criminals, he is finding our increasing AML efforts to be something of a bother: what with so few places taking cash, and anyone who does take your money asking all those impertinent questions, our friend Shorty [do you think anyone actually calls him that to his face?] has been instructing his minions to buy gold in pawn shops.  The beauty of gold is its anonymity: once it’s melted down, you can’t tell one pot of gold from another.  And many companies that deal in gold – think pawn shops, and those cash-for-gold online outfits – do not have particularly robust AML regimes.

Guzmán’s gold rush is now under investigation.  Court documents allege that his Sinaloa cartel used FedEx to ship more than US$98 million in gold to a Florida company (called “Natalie Jewellery” in the documents, with the business’s real name yet to be released), pretending that the packages were coming from businesses with names like Chicago Gold or Shopping Silver.  The Florida company collected a 1% commission of the value of the gold, and then forwarded the remaining 99% to a company in Mexico called De Mexico British Metal, generating fake invoices to make it look as though De Mexico British Metal had sold the gold to them.  What caught the eye of US customs investigators was the large amount of gold suddenly being processed through Miami – where very little jewellery is made.  And “Natalie Jewellery”, investigators say, has form: the man running it has already served three years in prison for laundering money for another Mexican drug cartel.  They obviously left him good feedback on DrugAdvisor, or whatever modern drug cartels use to find good launderers.

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6 Responses to The golden rule

  1. Gail Allenet says:

    Gosh the money launders are so clever, under-estimate at our peril!! 🙂

  2. Indeed, Gail – that’s what makes AML such a fascinating, challenging, frustrating and vital area of work. Unshackled by concerns about laws or morals, criminals can devise the most devious – and simple – of schemes.
    Best wishes from Susan

  3. Claire says:

    When I sold my gold jewelry, every time the buyer took a copy of my ID and I had to sign a paper with the details of the gold sold (weight, a photo of each piece and the total amount paid out). Perhaps every country should do this?

  4. That would be an excellent step forward, Claire – fingers crossed!

    • Robert James Long says:

      I am under the impression that most reputable gold dealers in the UK do perform due dilergence on their customers and keep excellent records (no one wants to find they just brought and melted down an antique gold brooch stolen form Wintermere Abbey or similar! Very embarassing…).

      Sadly not all dealers are reputable and Gold is so easy to move. I am surprised at the Mexican cartel though if only because the sheer bulk of that much gold must have been inconvient…

  5. Ah, there’s that loaded word “reputable”, as you say. And yes, the portability and anonymity of gold (and its relatively stable desirability) make it an attractive choice for naughty people.
    Best wishes from Susan

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