Details of the Sinaloa Cartel’s money laundering scheme in the U.S. were laid out in a Chicago Federal court last week, describing how El Chapo’s team would bring their tens of millions in drug profit back to Mexico from America. The key was gold: the buying, melting, and selling of gold and assistance of a jewelry company based out of Florida.
Court documents revealed that El Chapo‘s operatives were using their drug profits in the U.S. to buy gold jewelry all throughout the country, shipping that jewelry to a location to be melted down into bricks and then be shipped back to Mexico, because gold is supposedly notoriously hard for the feds to track once it’s been melted down.
The Sinaloa cartel, once led by serial prison escapee Joaquin “El Chapo” Guzman, used some of its proceeds from selling drugs in the U.S. to buy gold in pawn shops, according to allegations in court records. It shipped more than $98 million in gold to a Florida company that had it melted down and sold for cash. Then the cartel used fake invoices to justify sending the proceeds to a company in Mexico.
Court documents, plus interviews with people familiar with the alleged scheme, paint an unusually detailed picture of how gold can be used to hide an illicit money transfer.
“If I had a lot of money to launder, I would choose gold,” says John Cassara, a former U.S. Treasury special agent and author of books on money laundering. “There really isn’t anything else like it out there.” Once it’s melted down, the commodity’s origins are difficult to trace. It can quickly be converted to cash. Many of the companies that deal in gold aren’t held to the same compliance standards as banks.
I kind of love that a former U.S. Treasure special agent is doling out advice on how to launder money. I’ve always assumed that you needed to find some crooked accountant but I guess gold is where your bread is buttered?
Between 2011 and 2014, the Chicago complaint says, the company allegedly took in hundreds of boxes sent from the cartel, which used aliases such as Chicago Gold or Shopping Silver. The Florida company collected a commission of 1 percent, then forwarded the remaining money to a company in Mexico owned by Parra-Pedroza and called De Mexico British Metal, court documents allege. The records also say that falsified paperwork made it look as though De Mexico British Metal sold the gold to the unnamed Florida company, helping to make the transactions appear legitimate.
Bloomberg goes on to name the Florida-based jewelry company as Natalie Jewelry. Even though the company was never named in the court records their ties to a separate federal case led reporters to make the connection.
So there you have it, bros, if you’re ever at a place in life where you need to launder some cash money then you need to get into the gold business ASAP.