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Report shows how the Sinaloa Cartel melted gold to launder drug cash back to Mexico

May 7, 2016  |  Posted by: JammedUp Staff
Report shows how the Sinaloa Cartel melted gold to launder drug cash back to Mexico

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A report published by Bloomberg reveals how the Sinaloa Cartel led by Joaquin El Chapo Guzman used some of its ill-gotten gains from the illegal sale of narcotics in the United States to purchase gold, had it melted and resold as a means to launder drug money back to Mexico.

According to the Bloomberg report citing records from Chicago Federal Court, the Sinaloa cartel purchased more than 98 million dollars of gold along with other precious metals in Chicago jewelry stores and pawn shops, had it sent to Natalie Jewelry, a South Florida-based company,  who in turn melted the metal then sold it for cash.

Federal investigators said the criminal organization used falsified invoices to make as if a Mexican company owned by a cartel operative, had sold the gold to the company in Florida, to justify sending the laundered money from gold sales back to Mexico.

Court documents allege that between 2011 and 2014, Natalie Jewelry allegedly received hundreds of boxes sent by the cartel marked ‘Chicago Gold’ or ‘Shopping Silver.’

The Florida Jewelers collected a commission of 1% and resent the remaining funds to the Mexican company, court documents cited by Bloomberg showed.

John Cassara, a former special agent with the US Treasury and author of books on money laundering, said the modus operandi utilized by the Sinaloa cartel shows how gold can be an effective means to hide illegal money transfers.

“If I had to wash a lot of money, I would choose gold because there is nothing comparable, ” said Cassara, who specialized in white collar crimes.

He added, “Once the gold is melted, the origin of the raw materials is difficult to trace and can quickly be converted to cash.”

Cassara said companies operating in gold weren’t subjected to the same regulations or standards of legal compliance as banks.

In Jan. 2014, US Customs officials came across Natalie Jewelry after noticing discrepancies between the increased volume purchased and the value of gold processed by the South Florida company,  where Lou Bock, a retired US Homeland Security agent, said that practically no jewelry is made.

Federal agents raided the office of Natalie Jewelry, located in an industrial park north of Miami, seizing money cash and “hundreds of kilos of gold and silver,” according to a source quoted by Bloomberg.

A federal investigation uncovered Natalie Jewelry’s link with a money laundering network tied to drug trafficking organizations including the Sinaloa cartel.

In a separate case, the owners of Natalie Jewelry pleaded guilty to conspiring to launder money for a different drug trafficking organization. They have yet to face charges of money laundering for the Sinaloa cartel.

Attorneys for the owners of Natalie jewelry declined to comment to Bloomberg about the allegations.

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