Tracing Latin America’s Illegal Gold to the US

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In this special investigation, Peruvian investigative journalism website OjoPublico traces the trail of illegal gold from Colombia, Ecuador, and Bolivia to companies in the United States.

In 2012, one of the authors of this investigation reported for Pervuian newspaper El Comercio (pdf) about the links between Swiss refineries and the suppliers of illegal gold in Peru. Afterwards, the country’s Prosecutor’s Office Against Money Laundering and the Financial Intelligence Unit (UIF) began secret investigations into million-dollar transfers made by members of the London Bullion Market, the organization that sets the international price of gold and brings together the world’s biggest gold traders. Around this time same time, Peruvian tax authority (SUNAT) seized over one ton of illegal gold at Lima’s airport that was destined for the foreign companies NTR Metals, Kaloti, Republic Metals Corporation, Italpreziosi, and Metalor Technologies. (NTR Metals and Republic Metals Corporation are US companies; Kaloti is based in the United Arab Emirates; Italpreziosi is from Italy; and Metalor is a Swiss company).

This is the second part of an investigation that originally appeared in OjoPublico and was translated, edited for clarity, and reprinted with permission. See part one of InSight Crime’s translation here. See Spanish original here. 

Peruvian authorities are also investigating advance payments made by some foreign companies to acquire metal and cover export and transportation costs from gold mining areas in Peru. After examining financial documents related to these operations, OjoPublico confirmed that million-dollar transfers from banks in Switzerland and the US were made to the accounts of individuals and legal entities in Madre De Dios, Cusco, Puno, and Lima. Some of these payments were eventually seized during police operations targeting illegal mining activity.

During our trips to mining areas in Bolivia, Ecuador, and Colombia, we found that six foreign companies bought gold from the highlands of South America and regions in the Amazon threatened by illegal mining, contraband, and drug trafficking.

During our trips to mining areas in Bolivia, Ecuador, and Colombia, we also found that six foreign companies bought gold from the highlands of South America and regions in the Amazon threatened by illegal mining, contraband, and drug trafficking. As in Peru, we identified the largest gold providers in La Paz, Quito, and Medellin, some of whom are under suspicion for how they source their minerals.  

After publication of Ojo Publico’s investigation, Metalor issued an official response here. See MKS Finance’s official response here. See Kaloti’s response here.

Bolivia: The Golden Trail From La Paz to Miami

In Bolivia, gold from northern La Paz and the jungle regions of Beni and Pando (near the Brazilian border) ends up in the US. After analyzing its metal exports, OjoPublico found that Bolivia sent abroad up to six tons between 2003 and 2011. In 2012, metal production — which is under the control of domestic mining cooperatives, since there are almost no large investors in the local industry — hit record levels. That year, mineral shipments exceeded 20 tons. In 2014, exports totaled 30 tons. These unprecedented export figures created a political furor in the Andean nation.

SEE ALSO: Coverage of Bolivia

Bolivia’s political opposition said the gold that left La Paz was illegal because a group of export companies declared it as metal waste and, thanks to the help of complicit customs officials, was not subject to the appropriate taxes. However, there is still no explanation for the record amounts of minerals being produced in the country. Following the discovery by SUNAT that shipments from Bolivia to the US passed through Lima, Peruvian authorities suspect the increased production is due to contraband gold entering Bolivia from illegal mining areas in Madre de Dios and Puno in Southern Peru.

During OjoPublico’s investigation in Bolivia, we identified a little-known company based in Miami called Atomic Gold (which is not a member of the London Bullion Market) as one of the largest recipients of minerals with suspicious origin, alongside NTR Metals, Kaloti, and Republic Metals Corporation. These companies received gold that was declared as metal waste by Bolivian exporters. OjoPublico also found that one family in La Paz, led by Ronald Saavedra Orosco and his sister and nephews, directed the biggest mineral shipments to the US, totaling 14 tons in the last four years.



A convoy unloading smuggled goods at a gold sale near the Peru-Bolivia border. Photo c/o OjoPublico


Other individuals recently identified in La Paz as notable gold exporters include Boli Peter Lopez Salazar de Auribol, a Bolivian investor based in Miami who sent 10 tons to the US; Sthepani Rivera Herrera (7 tons); and Jose Valdez Rubin de Celis, manager of Royal Gold and another company called World Precious Metal (8 tons). All of these companies, in addition to others, were named in investigations by Bolivian authorities into how the companies obtained their assets. Authorities also opened investigations into the origins of all minerals that have been exported since 2012.

Colombia: Linking Goldex to the United States and Switzerland

Illegal gold mining is prevalent throughout Latin America. However, in Colombia this illicit industry is tied to drug trafficking and the armed conflict involving left-wing guerrilla group the Revolutionary Armed Forces of Colombia (FARC). The Colombian government recognizes that 87 percent of metal production is unlawful and that this activity has usurped cocaine trafficking in some regions controlled by the rebel group, such as Choco, Caqueta, and the Amazonas. Oscar Amaya Navas, a prosecutor of environmental crime, told OjoPublico that 50 percent of illegal mining in Colombia is associated with organized crime groups.

Reports by Colombian customs officials — unrevealed until know — indicate that Colombian export companies sent abroad more than 310 tons of gold between 2010 and 2014. Republic Metals Corporation received 40 of this gold, while Metalor received 20 percent. In addition, it has also been established that Goldex — whose owner, John Hernandez Santa, was arrested this year for money laundering and financing terrorism — was one of the largest suppliers to these corporations. Goldex, which is under investigation for laundering roughly $1 million, sent more than 30 tons to companies that belong to the London Bullion Market.



A child playing in a village on the banks of the Caqueta River, a gold mining zone dominated by the FARC. Photo c/o OjoPublico.


According to Colombian authorities, the metal sent by Goldex was supplied by front companies or fake intermediaries in the departments of Cordoba, Choco, Antioquia, Huila and Santander. Authorities also established that Goldex, as well as almost all gold exporters in Colombia, is not based in Bogota but rather in Medellin, the capital of Antioquia and close to the centers of gold production in the country.

Ecuador: Illegal Gold and Contraband

In Ecuador, the gold sourced from the country’s principal mining provinces — Zamora Chinchipe (on the border with Peru), as well as El Oro and Esmeraldas (on the northern border with Colombia) — also end up in the US. These remote areas — which have been informal mining zones for decade — supply minerals to Republic Metals Corporation and NTR Metals.

After traveling to Ecuador and reviewing reports of their gold exports between 2010 and 2014, OjoPublico discovered that during that time, several commercial flights left Guayaquil carrying more than 70 tons of metal. Over 140 export companies sent shipments destined for the US (NTR Metals received 19 tons, and Republic Metals Corporation, 13 tons), Switzerland, and Hong Kong during the past two years. Some of these companies were not licensed to carry out this activity.

SEE ALSO: Coverage of Ecuador

Among these 140 export companies in Ecuador, an export company owned by Ecuadorian Jorge Piedra Rengel stands out from the others. Piedra Rengel, a geologist, is listed as one of the largest suppliers of minerals to US companies, thanks to shipments from Expobonanza, Expausa, and Compañia Minera Mollopongo. He is also the manager and shareholder of 13 other companies dedicated to the extraction and exportation of minerals, five of which have been dissolved. Piedra Rengel also owns two additional mining companies in Colombia: Torrebruma and Realmonte, which are based in Medellin.

Other notable gold export companies in Ecuador include: Elipe, Expisum and Ecuador Goldxport, which were mysteriously dissolved after sending their shipments of metal abroad. The following entities also shipped large quantities of gold, although they are not considered to form part of the mining sector: Capertone (a real estate agency); entrepreneurs Eduardo Andrade Idrovo, owner of several dump truck companies, and Genaro Mera Cardoso, a trader in electronic appliances.

Ecuadorian reports on gold exports obtained by OjoPublico indicate a significant increase in shipments in 2012. That year, roughly 10 tons were exported, double the annual average. In 2013, about 15 tons were sent abroad, and last year that figure exceeded 30 tons. The striking contrast between official reports on gold production and the amount sent abroad between 2010 and 2014 paint an even more alarming picture. Despite mining reforms initiated by the administration of President Rafael Correa in 2009 that attempted to formalize the artisanal mining sector, only 30 percent of the gold produced in Ecuador over the last five years was sourced legally.



Illegal mining in Ecuador’s Nambija mountains, near the Cordillera del Condor on the border with Peru. Photo c/o OjoPublico


A recent episode reveals the scope of the illegal mining industry in Ecuador. On March 5, Ecuadorian police in Arenillas, El Oro stopped two armored vehicles coming from the border with Peru. Ten private security officers armed with pistols and rifles were inside the vehicles. The officers were protecting 90 gold ingots valued at $2.5 million. After identifying themselves, the officers presented the waybill for the gold shipment, but could not prove that the gold was legally sourced.

To the police, it was evident this was a case of contraband gold smuggled across the border from Peru. The gold was reportedly meant to be mixed with Ecuadorian metal and exported “legally” from Guayaquil. The ingots seized that day are now in the Central Bank of Ecuador, while the transporters are in prison. But this is unlikely to bring about a satisfying conclusion — if one thing is certain about the gold rush devastating the Amazon, it’s that the gold will always find new routes to reach its destination.

Lots of Questions, Few Answers

OjoPublico made contact with the London Bullion Market Association (LBMA) and the six foreign companies that were mentioned in this investigation. All of them, except for Italpreziosi in Italy, confirmed they had received our query.

Two officials in the Communications and Public Relations office at the LBMA said they would provide a response to our questions, but they did not do so.

Through their lawyer, Alan Silverstein, the US company Republic Metals Corporation denied they had been investigated either in the United States or abroad, and considered the statement that they had bought gold of suspicious origin to be “defamatory.” However, they did not provide any contacts in Miami (where their refinery is located) or in Lima that we could interview about the gold seizures and money laundering cases in which they have been implicated.

Through its Operations Chief, Alvaro Rodriguez, the United Arab Emirates company Kaloti asked for details on the questions OjoPublico had about their involvement in the purchase of illegal gold. We sent a short questionnaire, but as of this report’s publication, it has not been answered. MKS Finance in Switzerland also responded via a communications officer, who indicated that they would be in communication as soon as possible. They did not get in touch with us.

After publication of Ojo Publico’s investigation, Metalor issued an official response here. See MKS Finance’s official response here. See Kaloti’s response here.

We wrote to Samer Barrage, the Vice President of Sales in Latin American and the Caribbean for NTR Metals, and Jose Ugaz, a lawyer, responded. We sent him a questionnaire as well, but as of the publishing date it has gone unanswered. Reto Steiner, the Marketing and Sales Director of the Swiss firm Metalor, told us he would send our request to the company’s appropriate division, but there has been no answer. 

*This is the second part of an investigation that originally appeared in OjoPublico and was translated, edited, and reprinted with permission. See part one here. See Spanish original here.

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