US businessman pleads guilty in US$140 million ‘Cayman gold’ smuggling case

A Florida businessman has pleaded guilty to submitting false customs documents that disguised the true origin of gold in a US$140 million international smuggling operation involving the Cayman Islands.

Jesus Gabriel Rodriguez, Jr. admitted in a South Florida district court that he facilitated the importation of thousands of kilogrammes of gold flown to Miami, Florida, from Curacao, knowing that the customs paperwork falsely represented the gold’s origin as being from Cayman.

Rodriguez, 45, is the former CEO of Transvalue, a South Florida armoured vehicle company that, among other things, transported gold shipments from Miami International Airport to various refineries in South Florida.

One such refinery was owned by NTR Metals, a Dallas, Texas-headquartered company that is now called Elemetal LLC.

According to a criminal complaint affidavit filed in the case, NTR was allegedly involved in highly suspicious transactions, between 2013 and 2017, including the importation of more than $3.6 billion in gold from Latin America and the Caribbean.

Because the international gold trade is a common method to launder illegally mined gold, narcotics and other criminal proceeds, US precious metals dealers must establish anti-money laundering programmes under federal law.

NTR had anti-money laundering policies that prohibited it from buying gold from Curacao, a country that has no gold mines but is commonly used as waypoint for gold illegally mined in, and smuggled out of, other countries.

The Department of Justice said in a press release that Rodriguez conspired with buyers who earned volume-based commissions by procuring gold for NTR Metals.

Specifically, “Rodriguez helped co-conspirators dodge NTR Metals’ anti-money laundering policy and get the gold past U.S. Customs by working to conceal the gold’s origins and connections to Curacao.”

Gold routed through Cayman

The complaint affidavit alleged that between March 2015 and September 2016, NTR imported gold worth more than $141 million into the US from a company located in the Cayman Islands, only identified as Company A.

Although the gold was originally declared to have originated in Curacao, it was later reported to US Customs to have come from the Cayman Islands.

“Rodriguez and Transvalue assisted NTR salespersons and Company A in deceiving US Customs by facilitating the movement of the gold through customs at [Miami airport] both when it transited between Curacao and the Caymans, and again when it arrived back in Miami from the Caymans. Rodriguez also assisted the scheme by having his company, Transvalue, physically transport the gold from [Miami airport] to NTR when it arrived from the Caymans,” the affidavit said.

Several cooperating witnesses gave evidence against Rodriguez, implicating his knowledge of and participation in the scheme.

According to the affidavit, filed by an FBI agent, Company A owned a facility in Cayman and provided NTR with gold that was imported from Curacao.

To hide that the gold originated from there, Company A flew the gold from Curacao to Miami with couriers that hand-carried the precious metal on these flights.

Although the gold cleared customs in Miami, the couriers would immediately board another flight to Cayman, before returning once again to Miami from Grand Cayman.

These flights typically took place twice a week from 2015-2016, the affidavit stated, and served the purpose of reporting to US Customs that the gold came from the Cayman Islands.

Precious metal originated from Venezuela

The co-conspirators were all aware that the gold was likely being illegally mined and smuggled out of Venezuela, the complaint said.

One cooperating witness told investigators that one shipment to Company A reportedly smelled of gasoline, suggesting it had been transported in a gas tank and shipped to Curacao by boat.

“In another instance, Company A’s representative admitted to [the cooperating witness] that the gold sold to NTR was from Venezuela and would transit through Curacao.”

The same representative mentioned Venezuelan suppliers when discussing price locks for expected gold deliveries, the complaint alleged.

The witness suggested that Transvalue hired the customs broker that cleared the same gold through US customs twice, first from Curacao and then from Cayman. But Transvalue would bill NTR only for transactions mentioning the Cayman Islands, and in some cases change invoices inadvertently mentioning Curacao, to avoid alerting NTR’s internal compliance and circumvent anti-money laundering controls.

The affidavit alleged that Company A also bought gold in Africa for NTR and similarly disguised the gold’s source by routing it through Cayman to avoid openly violating NTR’s policy not to accept gold from Africa.

US Customs import and export data also showed that “the booming gold trade between Miami and the Cayman Islands in 2015 and 2016 existed almost solely as a byproduct of the steps taken by [the cooperating witnesses, Rodriguez and Company A] to conceal the origins of gold that originated in Curacao, and Venezuela before that,” the complaint said.

Guilty pleas

Rodriguez agreed to forfeit $267,817 as part of his guilty plea. The amount is equivalent to Transvalue’s and his personal gains from the scheme.

Rodriguez is scheduled for sentencing on 4 April and faces up to 24 months in federal prison.

US Attorney Juan Antonio Gonzalez said complex money-laundering schemes involve key players at every stage of the process.

“Corporate executives who facilitate money laundering while purportedly importing lawful goods at the transport and U.S. Customs stages do not get to hide behind their status as otherwise legitimate business owners. Like everyone else participating in these illegal schemes, they will be prosecuted,” Gonzales added.

In March 2017, Elemetal (NTR) pleaded guilty to charges of failing to maintain an appropriate AML programme and agreed to forfeit $15 million.

Three former NTR Metals employees in Miami pleaded guilty to conspiracy to commit money laundering and were sentenced in January 2018 to 72, 80 and 90 months in prison, respectively.