How El Chapo Used Gold To Move Money Out Of The U.S.
By Tyler Durden
With blue lights flashing and a SWAT team in front of the warehouse, a black sedan pulled up. A man got out, popped the trunk, grabbed a briefcase and headed for Natalie Jewelry. Once there, the man was heard to say “I just need to drop off this gold and get a receipt. I need a receipt.“
That's a first hand account of how gold was delivered to a Miami jewelry store by drug cartels, to later be melted down and sold for cash.
As Bloomberg reports, court documents from a federal court case in Chicago allege that El Chapo's Sinaloa drug cartel laundered tens of millions out of the U.S. not through secret shell companies wiring funds from bank to bank, but by simply buying gold and selling it.
Here's how the money laundering process allegedly worked. When the Sinaloa cartel needed to get the proceeds from its drug activities in the U.S. back to Mexico, it would first go buy up gold bars and other scrap gold pieces (sometimes silver as well) from jewelry stores and other businesses in the Chicago area. Then, the gold would be put into boxes, and under the name “Chicago Gold”, or on occasion “Shopping Silver”, would ship the boxes via FedEx to a company near Miami called Natalie Jewelry.
Once the gold arrived at Natalie Jewelry, the second leg of the operation was set in motion. The gold would then be sold to companies referred to as refineries, who melted down the gold. The refinery would take a commission, and send the rest of the proceeds back to Natalie Jewelry.
Now came the difficult part, which was getting the cash out of the country and into Mexico. This part of the operation called for a little bit more creativity, so the cartel set up a company in Mexico called De Mexico British Metal. De Mexico British Metal would invoice Natalie Jewelry, making it appear that it had sold the gold to them. Natalie Jewelry would in turn take their commission, and send the final proceeds to De Mexico British Metal.
The invoices made the entire transaction appear legitimate, and it worked for a period of time, as the cartel was able to launder an estimated $98 million using this process. However, the Department of Homeland Security eventually caught on to the scheme. “There was just way too much gold going through Miami” said retired DHS agent Lou Bock. The fact that U.S. customs records showed a large volume of gold being processed by a company in Miami, coupled with the fact that virtually no jewelry is made in Miami, made the agency very suspicious.
In January 2014, based on Customs reports showing discrepancies between the volume and value of gold processed by Natalie Jewelry, federal agents converged on the office located in an industrial park just north of Miami. They seized cash and hundreds of kilograms of gold and silver, along with documents linking the company to the Sinaloa cartel.
* * *
This incredible scheme has us wondering, …read more
Source: How El Chapo Used Gold To Move Money Out Of The U.S.
