February 8, 2023

DOJ Costs Armored Car or truck Provider CEO for Elaborate Plan to Launder Money By Unlawful Gold | Ballard Spahr LLP

On June 23, 2021, the Office of Justice unsealed a criminal complaint and affidavit submitted in the Southern District of Florida that alleges a wide scheme to launder funds by means of illegal gold mining.  The DOJ billed Jesus Gabriel Rodriguez, Jr., the CEO and President of Transvalue, Inc., a South Florida-dependent armored vehicle services, with a single rely of conspiring to dedicate revenue laundering.  The affidavit attached to the grievance alleges that Rodriguez conspired with personnel of a South Florida-dependent gold refining corporation to import 1000’s of kilograms of illicitly-sourced gold from Curacao truly worth tens of millions of pounds, and then use his company’s fleet of armored vehicles to thwart the anti-cash laundering (“AML”) software of a U.S. important metals refinery obtaining the gold.

As we have blogged, gold is an specially successful medium for funds laundering because it has common and conveniently ascertainable benefit and is complicated to trace.  Curacao, a Caribbean island with no gold mines, is frequently part of the route for gold illegally mined in, and smuggled out of, South The usa (such as Venezuela) and Africa.

Gold and Income Laundering

As the affidavit points out, Miami has develop into a important intercontinental gold investing hub for both lawful and unlawful gold from Latin The usa.  Unlawful gold mining is a considerable problem throughout Latin The us and in the Andean location.  For case in point, unlawful mining has aided lead to the destruction of big swaths of the rainforest.  Illegal mining usually takes place in distant jungle places and, as a consequence, is difficult to law enforcement and generally controlled by arranged crime and smuggled alongside the same routes as narcotics.  Most of the gold imported to the U.S. enters by means of Miami Worldwide Airport (MIA) and various major gold refineries are centered in South Florida.

The worldwide gold trade is a prevalent usually means for lousy actors to launder the proceeds of unlawful mining, narcotics, corruption, and other criminal proceeds.  Criminals usually trade unlawful gold by illicit shell businesses utilizing wrong documents.  The gold is commonly smuggled via third-occasion nations, these as Curacao, and then offered to refineries in the U.S. in an exertion to obscure the legitimate source, ownership, and origin of gold from foreign and U.S. regulation enforcement.  In a regular cash laundering scheme involving gold, criminals acquire wire transfers to the financial institution of their option at the time the gold comes at the refineries.  On the surface, the payment appears to be for a reputable gold-sale transaction, and not from any underlying felony action.

Rodriguez’s Alleged Scheme

The complaint towards Rodriguez alleges that from about March 2015 to September 2016, he utilised his market practical experience and contacts to aid the importation of countless numbers of kilograms of illicitly-sourced gold getting flown into the U.S. from Curacao.  The sellers of the gold have been allegedly co-conspirators located in the Caribbean and the prospective buyers were co-conspirators dependent in South Florida and Latin The us.  These customers earned volume-centered commissions by procuring gold for a U.S. important metals refinery, NTR Metals (now Elemetals LLC).

In March 2017, NTR pled guilty to 1 felony for failing to manage an enough AML program that came to mild all through an ongoing probe into gold imports from South American nations around the world.  As part of its plea, NTR agreed to a $15 million high-quality and to cooperate with any ongoing investigations, together with, it turns out, the investigation of Rodriguez.

According to the affidavit, Rodriguez purportedly served his co-conspirators evade the AML policies and strategies of NTR Metals, including the refinery’s plan of not shopping for gold from Curacao.  Specially, Rodriguez allegedly utilised his company’s fleet of armored vehicles to pick up gold shipments at MIA and transportation them to numerous unique South Florida gold refineries, together with NTR.  Customs records display that NTR imported over $3.6 billion dollars’ value of gold from Latin The usa and the Caribbean from 2012 via 2016.

In just one purported instance of the plan, NTR imported countless numbers of kilograms of gold among March 2015 and September 2016 that was really worth a lot more than $141 million into the U.S. from a company situated in the Cayman Islands (“Company A”).  In each individual occasion, the very same gold was claimed to U.S. Customs as having originated in Curacao, and a couple of days afterwards claimed as owning originated in the Cayman Islands.  As element of the plan, Enterprise A flew gold from Curacao into MIA with couriers who hand-carried the gold on these flights.  Upon arrival to MIA, a customs broker hired by Rodriguez cleared the gold through U.S. Customs.  The courier would then promptly board yet another flight to the Cayman Islands and transport the gold there.  The moment the gold was in the Caymans, a co-conspirator notified Rodriguez when Business A’s shipment was going to be arriving back again in Miami from the Caymans.  Transvalue would then bodily transport the gold from MIA to NTR when it arrived from the Caymans.  If Transvalue despatched an invoice to NTR for Firm A’s shipments from Curacao to Miami, NTR staff members would reach out to Rodriguez to improve the invoices and hence conceal that the gold was coming from Curacao considering the fact that NTR would not obtain gold from Curacao.

On a complex observe, the prison complaint and affidavit charge Rodriguez with conspiring to launder revenue, in violation of 18 U.S.C. § 1956(h) by transporting money (cross-border actions of gold and wire transfers from the United States to the Cayman Islands) in and out of the United States, in buy to advertise an underlying specified illegal exercise (“SUA”), in violation of 18 U.S.C. § 1956(a)(2)(A).  The alleged SUAs that the plan was endorsing have been the entry of items by means of fake statements, in violation of 18 U.S.C. § 542, and entirely international offenses – specially, violations of Curacao rules from unlawful mining, untrue statements in customs declarations, and gold smuggling.  As we have blogged, the governing administration evidently does not have to confirm under this “international” prong of the dollars laundering statute that the transported resources at concern formerly have been obtained by means of the SUA.

Rodriguez is currently out on bail and a preliminary listening to is scheduled for July 23, 2021.  The investigation and prosecution of Rodriguez is aspect of “Operation Arch Stanton,” a partnership between federal, condition and regional law enforcement agencies to discover and prosecute the highest-stage drug traffickers, funds launderers, and other transnational felony businesses.