HomeNewsBriefSinaloa Cartel Laundered Drug Money by Melting Gold: Report
BRIEF

Sinaloa Cartel Laundered Drug Money by Melting Gold: Report

GOLD / 10 MAY 2016 BY ELYSSA PACHICO EN

A recent report describes how the Sinaloa Cartel used gold sales to move drug trafficking profits from the US back to Mexico, shedding light on a practice that has become heavily favored by some criminal groups in Latin America.

Court documents viewed by Bloomberg detail how Sinaloa Cartel operatives based in Chicago would use profits from drug sales to buy gold bars and jewelry in the area. The gold was then shipped via FedEx to a company in Florida, which melted down the gold and sold it for cash.

The Florida company would then keep 1 percent of the profits and send the rest of the money to a business in Mexico, Bloomberg reported. Operatives involved in the scheme would also falsify paperwork, making it look as though the Mexican business had legitimately sold the gold to their partners in Florida.

Members of the Sinaloa Cartel sent hundreds of boxes full of gold to the Florida company before US authorities raided the company's office outside of Miami in January 2014, Bloomberg reported. Sources consulted by Bloomberg said that authorities found evidence of the Florida company laundering funds for other drug trafficking rings as well.

The Sinaloa Cartel operatives in Chicago were charged with money laundering in 2015. According to a Department of Justice press release, they also used companies in California as part of the cash-to-gold scheme.

InSight Crime Analysis

As the Chicago case illustrates, there are multiple reasons why criminal groups have begun using gold as a means to launder illicit profits. The origins of melted gold are difficult to trace, and US companies that deal with gold face less scrutiny than institutions that handle cash transfers, according to Bloomberg.

SEE ALSO: Mexico News and Profiles

Criminal groups may have opted for cash-for-gold money laundering schemes after Mexico limited monthly dollar deposits in cash for Mexican businesses in 2010 (although Mexico partly reversed this measure in 2014). This move was meant to discourage criminal groups from making large transactions of drug dollars to Mexican banks, but instead it may have pushed the cartels into using other money laundering techniques, including setting up US-based front companies.

Using gold as a means to disguise dirty money has long been practiced by Colombian criminal groups. The ongoing popularity of this method may be one reason why illicit gold mining continues to thrive in places like Peru, according to a recent report on organized crime and gold mining by research group the  Global Initiative Against Transnational Organized Crime.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

COCAINE / 8 NOV 2021

Cocaine, synthetic drugs, weapons, migrants, gasoline - this range of criminal economies has seen violence escalate in Mexico's northern state…

MEXICO / 23 AUG 2021

Lacking government support and effective oversight, drug rehab centers in Mexico are being exploited by organized crime groups, which are…

BRAZIL / 11 MAR 2021

As Latin American countries struggle to ramp up COVID-19 vaccination, crimes related to the illegal purchase of vaccines, including the…

About InSight Crime

LA ORGANIZACIÓN

Extensive Coverage of our Chronicles of a Cartel Bodyguard

23 SEP 2022

Our recent investigation, A Cartel Bodyguard in Mexico’s 'Hot Land', has received extensive media coverage.

THE ORGANIZATION

InSight Crime, American University Host Illegal Fishing Panel

19 SEP 2022

InSight Crime and the Center for Latin American & Latino Studies (CLALS) at American University discussed the findings of a joint investigation on IUU fishing at a September 9 conference.

THE ORGANIZATION

Impact on the Media Landscape

9 SEP 2022

InSight Crime’s first investigation on the Dominican Republic made an immediate impact on the Dominican media landscape, with major news outlets republishing and reprinting our findings, including in …

THE ORGANIZATION

InSight Crime Sharpens Its Skills

2 SEP 2022

Last week, the InSight Crime team gathered for our annual retreat in Colombia, where we discussed our vision and strategy for the next 12 months.  During the week, we also learned how to…

THE ORGANIZATION

Colombia’s Fragile Path to Peace Begins to Take Shape

26 AUG 2022

InSight Crime is charting the progress of President Gustavo Petro’s agenda as he looks to revolutionize Colombia’s security policy, opening dialogue with guerrillas, reforming the military and police, and…