Colombia Drug Trafficking Money Laundered Through Modified Gold
A criminal group in Colombia is turning dirty money into adulterated gold, in the latest addition to a long list of laundering schemes using the precious metal.
The Gaitanist Self-Defense Forces of Colombia (Autodefensas
Gaitanistas de Colombia – AGC), also known as the Urabeños, have been linked to
front companies that buy gold from Europe, El Heraldo reports. The gold is then
adulterated with other metals to the point where it yields double the weight,
according to an unnamed judicial source who spoke about the scheme.
The adulterated gold is sold under the guise that it was
extracted in Colombia, or is fashioned into jewelry locally, with would-be
buyers unaware that it is not pure.
Though the gold sales primarily serve to launder drug
trafficking money, the adulterated gold has proven to be profitable on its own.
By creating the alloys, the crime group earns "twice the price," the
source said.
While dirty gold has become a common method to launder drug
money in recent years, Colombian traffickers from the days of Pablo Escobar
have paved their way in gold.
In the 1980s, gold bars were bought with drug money,
smelted, and then passed off as local production.
The Cali Cartel laundered hundreds of millions of dollars
through a gold-buying scheme. Drug money deposited in Italian banks was used to
buy gold bullion. The gold was then sent to Panama, where it was sold off for
cash.
So much gold was being bought in Italy with drug money that
it threatened to destabilize prices there, an Italian police official said in
1994.
In the 2000s, Salvatore Mancuso, a commander of the
paramilitary federation United Self-Defense Forces of Colombia (Autodefensas
Unidas de Colombia – AUC), laundered cocaine profits through gold bought in
Panama. The gold was then smuggled into Colombia, smelted, and passed off to
town mayors who sold it to the State as though it were extracted locally.
As a result, several security measures were put in place in
Colombia to track sales of gold and to verify that it is the product of
Colombian mines. One such safeguard is the Single Registry for Minerals
Commercialization (Registro Único de Comercializadores de Minerales - RUCOM),
which includes a list of the people authorized to buy and sell gold in
Colombia.
Nevertheless, gold purchased abroad is still used as a money
laundering vehicle in the country. According to reports compiled by the
Organization for Economic Cooperation and Development (La
Organización para la Cooperación y el Desarrollo Económicos - OCDE) in 2017,
gold is smuggled to border departments like Chocó, where it is passed off as
regional production, using fake miners or falsifying documents for RUCOM.
The business is so lucrative that the drug traffickers
incentivize the extraction of illegal gold in Colombia, buying machinery and
creating new mines. They also purchase large quantities of illegal gold, and
then launder it through formal mining permits so that it can be sold on the
legal market.
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