Raids across Costa Rica have exposed a web of front companies filtering illegally mined gold to the United States, in the kind of multimillion-dollar laundering scheme not typically associated with the Central American country.
In late August, Costa Rican authorities carried out 32 raids and arrested 27 people connected to the illegal mining and gold laundering ring, according to the Attorney General's Office. Police also recovered gold bars, drugs, cash, and falsified export documents.
Walter Espinoza, the general director of Costa Rica's Judicial Investigation Department (Organismo de Investigación Judicial — OIJ), said the investigation into the mining ring began in April 2019 after authorities at San José's Juan Santamaría International Airport noticed an unprecedented amount of gold listed in export documents.
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The investigation eventually uncovered a multi-level extraction and export operation, with different teams responsible for mining, molding, transporting, exporting, and laundering the gold. In total, the ring finalized at least $60 million in international gold sales, according to Espinoza, citing seized export documents.
The gold — illegally mined in Crucitas de Cutris along the northeast Nicaraguan border, and Corcovado in western Costa Rica — was moved to the United States through companies involved in foreign trade, authorities said.
The ring’s breakup comes just months after a government ecological impact report found that illegal miners in Crucitas de Cutris had taken over another 70 hectares of land between 2018 and 2019, representing an increase of 156 percent in total exploited territory.
The study also noted that the expansion of illegal gold mining in the region had polluted 35 local bodies of water, with the report’s authors estimating that miners extracted about $200 million worth of gold from the region between 2017 and 2018.
InSight Crime Analysis
Illegal mining in Costa Rica's Crucitas de Cutris has been going on for years, but the recent investigation reveals that the sophisticated financing and laundering schemes normally associated with gold-rich South American countries have made their way to Costa Rica.
Costa Rica first granted a mining concession in Crucitas de Cutris to the Canadian company Infinito Gold Ltd in 2000. Environmental groups opposed the project, leading to various construction stops and restarts in the coming decade before the Costa Rican government permanently canceled Infinito Gold Ltd’s concession in 2011.
The half-built infrastructure was quickly appropriated by illegal miners — particularly Nicaraguans crossing a border just three miles away — looking to extract the remaining reserves through rudimentary and often environmentally unsafe practices.
SEE ALSO: InDepth Coverage of Illegal Mining
The latest operation, however, shows that prosecutors are going after not only the miners but also the criminals who used front companies to launder the illegal gold and to deposit proceeds from its sale. According to the OIJ, members falsified documents in order to export the gold bullion to cities such as Miami, Los Angeles, and Houston. The group also recruited at least one official in the ministry of finance to provide advice and cover for the group’s laundering operations. Prosecutors say that other state officials might also have been involved.
Prosecutors, after seizing drugs and cash during the August 20 raids, have opened a parallel investigation to see if the mining ring might have been involved in drug trafficking, according to CR Hoy. Criminal groups in other Latin American countries like Venezuela are known to be simultaneously involved in the trafficking of gold and drugs.
As InSight Crime highlighted in its GameChangers 2019 series, illegal mining has come to rival the drug trade for profits over the last decade, growing swiftly in places like Peru and Ecuador. And in Venezuela, state forces are believed to be coordinating with guerrilla groups to operate illegal mines in the state of Bolívar, with the gold finding its way into the coffers of President Nicolas Maduro’s government.
What's more, the high international price of gold, which hit an all-time record on August 6 of 2020, will only fuel further demand for illegally sourced gold.