Mexico Cartels Stealing Gold to Launder Drug Money

InSight ^ | Tuesday, 01 May 2012 | Elyssa Pachico

[nickcarraway]

Mexican authorities say that, since 2008, criminal gangs have robbed so many trucks carrying gold shipments that some mining companies have been forced to switch to aerial transportation. This highlights the convenience of gold as a means to launder dirty cash.

Drug cartels primarily use the gold to launder their proceeds, usually reworking it into jewelery and selling it on the legal market, reports Excelsior.

Theft of gold bar shipments has been reported in some of the states most affected by drug violence, including Chihuahua, Sonora, and Durango. One miners' association in Sonora told the newspaper that their production costs have increased 15 percent due to security issues, and because they are forced to move their product mostly by plane.

The report does not provide a total for the number of such robberies registered in the past four years, but says the gold stolen during that period is worth some $3 million. The Attorney General's Office reportedly has seven open investigations into gold robberies, all of which involve drug trafficking groups. Some organizations even have the technology to melt down the stolen gold and recast it into bars with a higher level of purity, the report reveals.

Gold has various advantages that are appealing to money launderers, including its easy convertibility, and the fact that it can be transferred with relative anonymity on the world market.

Both Colombia's Cali and Medellin Cartels favored gold as a way to launder the proceeds of drug trafficking. It is typically used a means to transfer money from drug sales in the US back to the cartel's country of origin. There are a couple of ways such laundering schemes could work. One is buying gold with dirty cash, and reworking the metal so that it is disguised as a common household or fashion item, then exporting this back to the drug cartel's home country, refining it, and selling it for cash. Another method involves exchanging cash for gold, and using the gold itself to represent the proceeds gained from drug trafficking.

A popular method used by the Medellin Cartel involved importing bars of gold mixed with lead, which were reported as fine gold. By overcharging for the low-purity gold and fudging the invoices, the cartel was able to disguise its profits.

It is likely that the Mexican cartels are also employing a wide variety of ways to use gold to launder proceeds from organized crime. The fact that the Mexican groups have elected to steal the gold outright, rather than purchasing it from legitimate jewelry sellers as the Colombian cartels used to, is one sign of the boldness of the Mexican criminal syndicates. It could also be that stealing gold shipments is viewed as easier and more convenient than going through the hassle of building a relationship with a supplier, which could explain why some Mexican groups have elected to use theft as their primary means of obtaining gold.

[Sherman Logan]

A truly stupid story.

Stealing gold does not launder your cash. The cash is still there and still dirty.

Stealing gold is profitable, but not cleansing.

[R. Scott]

Wouldn’t they have to launder the profits from jewelry sales too? Wouldn’t mixing lead with gold change the color significantly? I can see a difference in color between my .999 and .9999 fine gold.

[DeaconBenjamin]

says the gold stolen during that period is worth some $3 million.

Assuming this is US dollars, and not Mexican pesos (which also uses $), we are looking at 1800 ounces of gold. So what do we have here, 18 100 ounce bars over a period of 4-5 years?

[John123]

Stealing gold does not launder your cash. The cash is still there and still dirty.

I actually reread the story... and still couldn't figure out how the dirty money was laundered. The story is really about another income stream for the Mexican Cartels.

[Venturer]

3 million dollaars is peanuts to drug cartels.

[bcsco]

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[darth]

Scrap metal dealers have been observed laundering cash for drug dealers. It’s easy to ship a few containers full of nickel or copper to S. America. Those metals can be easily converted to cash and the containers are mixed in with legitimate metals sales.

Moving scrap metal does not attract attention like Au and Ag.

[OB1kNOb]

Eh, it’s getting so bad that even the criminals are recognizing that their illgotten wealth needs to be preserved in precious metals rather than fiat currency.

[yefragetuwrabrumuy]

A silver mine in old Mexico used to be plagued by robberies of its armed convoys with refined silver, so they came up with a truly novel solution.

Instead of finishing their silver into bars, they poured the molten silver into a giant ball mold, with large handles protruding from the ball. Then when it was completed, they assembled a very large team of draft horses, tied the giant ball of silver by its handles to two heavy ropes, so that they could roll the ball, slowly, all the way to the city, towed by the team.

A large group of banditos attacked them, and the miners took off, leaving the giant ball behind. What amounted to an immovable object, as far as the banditos were concerned.

In the few hours available to the banditos before the miners returned with soldiers, there was nothing they could do. They couldn’t hew off any of the silver, they couldn’t roll the ball with their horses, nothing. So they left in frustration. Then the miners returned with their draft team hooked up the ball, and slowly rolled away with it.