Mexico Cartels Stealing Gold to Launder Drug Money

Tuesday, 01 May 2012 10:25
Written by Elyssa Pachico

InsightCrime.Com:

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.

InSight Crime Analysis

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.