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How to Become an International Gold Smuggler

Discussion in 'Gold Silver (All things Metal)' started by Scorpio, Mar 17, 2017.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    How to Become an International Gold Smuggler

    Harold Vilches, a 23-year-old Chilean, exported $80 million in contraband gold. It all started with a Google search.

    [​IMG]
    Photographer: Tomas Munita for Bloomberg Businessweek

    by
    Michael Smith
    and
    Jonathan Franklin
    March 9, 2017, 3:00 AM CST
    From Subscribe Reprints

    As the minutes ticked by on the afternoon of April 28, 2015, Harold Vilches watched stoically while customs officers at Santiago’s international airport scrutinized his carry-on. Inside the roller bag was 44 pounds of solid gold, worth almost $800,000, and all the baby-faced, 21-year-old college student wanted was clearance to get on a red-eye to Miami. Vilches had arrived at the airport six hours early because he thought there might be some trouble—he’d heard that customs had recently seized shipments from competing smugglers. But Vilches had done this run, or sent people to do it, more than a dozen times, and he’d prepared his falsified export paperwork with extra care. He was pretty sure he wouldn’t have any trouble. While he waited, he texted his contacts in Florida, telling them he’d already cleared customs.

    The plan was to hand off the gold at the Miami airport to a pair of guards, who would load it into an armored truck for the short trip to NTR Metals Miami LLC, a company that buys gold in quantities large and small and sells it into the global supply chain. The modesty of its shabby office, where a receptionist sits behind an inch-thick acrylic barrier, belies the amount of business that goes on inside. U.S. Department of Justice investigators believe NTR Metals Miami has bought at least $3 billion in South American gold in the past four years, much of it from illegal mining operations, people familiar with the investigation say.

    Vilches didn’t need this headache. In just two years he had rapidly risen in the ranks of Latin American gold smugglers. Although he was barely old enough to order a beer in Miami, he’d won a $101 million contract to supply a gold dealer in Dubai. That hadn’t exactly worked out—the Dubai company was after him for $5.2 million it says he misappropriated—but still, in a brief career he’d acquired and then resold more than 4,000 lb. of gold, according to Chilean prosecutors. U.S. investigators and Chilean prosecutors suspect almost all of it was contraband.

    That evening at the airport, Vilches employed his standard cover story, saying that the gold came from coins acquired from customers and recast as ingots. The customs officers weren’t buying it. The laboratory Vilches had used to vouch for the gold wasn’t government-certified, they said, and they doubted his claims that the gold had come from coins. Vilches was irate. He couldn’t believe it when the man behind the desk called his boss and then relayed orders from above: If it’s Vilches’s gold, seize it.

    Investigators with the Policía de Investigaciones, Chile’s equivalent of the FBI, had been monitoring Vilches for months, intercepting his phone calls and scouring the export papers he’d submitted. The kid was clever, they agreed, but who was he working for? “I thought there was someone behind him, always,” says José Luis Pérez, a Chilean prosecutor on the case.

    After the airport officials confiscated Vilches’s gold, they let him go. For the next 15 months, Chilean authorities allowed Vilches to bring illegal gold in and ship it out as they built a case, searching for associates and those above him. They listened in on various telephones, read Vilches’s text messages, and followed couriers. They watched as smugglers brought gold south from Peru, across remote stretches of desert and through valleys in the Andes Mountains, or west from Argentina, driving over the snowy mountain pass in the shadow of 22,800-foot-high Aconcagua, then down to Santiago and Vilches’s headquarters, a place police nicknamed “The Bunker.” Inside, Vilches assayed, weighed, and paid for the gold. He melted it down and recast it as ingots, then flew it, or used a family member to fly it, to Miami.

    [​IMG]
    An illegal mine in Peru. The primary tools in this type of mining are fire hoses and mercury.
    Photographer: Tomas Munita/The New York Times/Redux
    To their growing amazement, the police never found the larger organization they presumed was supporting and protecting Vilches. There was, as far as they could determine, no bigger fish. Finally, in August 2016, they arrested him. Investigators say they have documented $80 million in gold shipments that moved through his hands via eight shell companies he established in Chile and Miami—and they think there was much more. They charged Vilches and four associates, including his wife and her father, with racketeering, smuggling, customs fraud, and money laundering. None of them have been tried, and the case remains open. Vilches’s wife and father-in-law declined through their lawyer to comment. Today, Vilches lives with his wife in an apartment in a rundown part of Santiago; he’s under house arrest from 10 p.m. to 6 a.m.

    In exchange for his release from jail, Vilches provided extensive testimony that has allowed Chilean prosecutors and the U.S. Department of Justice to try to build a huge, multinational gold smuggling case. Interviews with police and prosecutors in Chile and the U.S. and hundreds of pages of police files describe Vilches’s part in a black market that adds literally tons of illegally mined and contraband gold to the international economy every year.

    In the past decade and a half, global gold consumption has risen by almost 1,000 tons a year, to about 4,300 tons, according to the World Gold Council, a London-based industry group. Legal mining operations haven’t kept up with demand, so illegal mines controlled by criminal gangs, from the Amazon to central Africa, help cover the deficit, according to Verité, a nonprofit group in Amherst, Mass., that’s researched the illegal gold trade. A 2016 Verité study found that five countries in Latin America shipped 40 tons of gold from illegal mines to the U.S. in one year, almost twice the legal exports from those countries. South America’s illegal gold mines, most of them in the Amazon basin, are toxic pits in which mobs of laborers use fire hoses and mercury to extract nearly pure gold nuggets from the red earth. According to a finding by the United Nations, the industry thrives on child labor, devastates the environment, and enables prostitution at ramshackle camps around the mines. The gold moves from smuggler to smuggler, then into a network of refiners and traders, all feeding the world’s voracious demand.

    Vilches, a city kid, never saw any of this, but he did grow up around gold. His father, Mario, owns a jewelry shop; his uncle Enrique, an evangelical preacher, built Joyas Barón, a chain of 18 jewelry stores. Enrique has more than once attracted the attention of the authorities. In 1998, Chilean prosecutors caught Ecuadorean smugglers with 18 ingots of gold at the airport, and they claimed to be delivering it to Enrique. (He was cleared of all criminal charges after arguing that police set him up.) In March 2015, Enrique was sentenced to five years’ probation for tax fraud by an appeals court in Santiago. Last year tax authorities filed further charges alleging that Enrique had organized an enormous accounting scam and owed an estimated $18 million in back taxes. Speaking on Chilean TV, Enrique Vilches denied all connections to his nephew’s gold smuggling. “I don’t have any commercial relationship with what’s being investigated,” he said. “[There’s] no situation that involves me, therefore I want to remain absolutely separated from this situation.”

    By 15, Harold was working for his father’s business. Within a year, his dad was stuffing his backpack with up to 50 million pesos ($78,000) in cash and sending him to the bank to make deposits. In 2013, Vilches entered college at the Universidad Mayor in Santiago to study business administration. He hadn’t been there long when his father had a stroke, and he cut back his classwork to focus on the family business. If he was going to be doing that, he decided, he wanted to do more than buy and sell trinkets. He intended to make some real money, and that meant getting into the bulk gold business.

    [​IMG]
    Gold seized in 2014 from Vilches’s couriers. They were trying to bring 48 kilos to Santiago.
    Source: National Customs Office Chile
    His first move was to persuade Gonzalo Farias, a metals exporter in Santiago, to take him on as a supplier. In September 2013, Vilches made his first delivery to Farias—6.6 lb. of gold legally acquired in Chile. He made several more such deliveries. But he wanted to be bigger. He went around Farias and cut a deal directly with Fujairah Gold, a Dubai-based company that Farias supplied. In June 2014, Vilches signed a contract to deliver 6,000 lb. of gold over the next 12 months to Fujairah’s head office. The contract began with 90 lb. the first month, then ratcheted up. He didn’t have the money to buy that much gold, so the company gave him access to an account holding $5.2 million. This was his big break—the contract was potentially worth more than $100 million. He stood to make $2 million to $6 million in profit.

    This was beyond ambitious for Vilches—there weren’t enough available gold coins and jewelry in Chile to fill Fujairah’s orders. So Vilches decided to become a smuggler. It was easy: He Googled gold dealers in Peru. He found Rodolfo Soria Cipriano, one of the country’s most prolific exporters, according to Peruvian newspaper El Comercial. An answer came quickly. Vilches told investigators Soria promised to set him up with all the gold he wanted if he showed up with the cash. Vilches said he didn’t ask where the gold came from. Whatever its source, he evaded export controls and moved the gold into Chile without paying taxes or duties, prosecutors say.

    Soria made introductions to a network of suppliers, with whom Vilches later arranged buys via WhatsApp messages. Once the gold was ready for pickup, he would fly to Arica, in northern Chile, where he kept a Mazda sedan expressly for trips into Peru. On at least 10 trips, beginning in the middle of 2014, Vilches says, he and his father-in-law drove across the border to the city of Tacna, a few miles inside Peru, with the door panels of their car stuffed with cash, as much as $2 million at a time.

    Vilches bragged to prosecutors that he moved with ease in the criminal world. With relish, he described making a buy at a safe house in Tacna. While his father-in-law waited outside in the car, Vilches was escorted by armed men through multiple metal detectors and locked gates before arriving at a secure room that held a huge stash of gold. He suspected the house doubled as a cocaine dealing operation, he told prosecutors, but he kept his cool. He tested the gold for purity, then went back outside, packed the contraband into the door panels of the Mazda, and drove back to Chile.

    [​IMG]
    Mining at a government-designated site in the indigenous San Jacinto community in the Madre de Dios region of Peru.
    Photographer: Tomas Munita/The New York Times/Redux
    Vilches began making as many as five gold runs a month to Peru and also hired couriers, who delivered to him directly in Santiago. It added up to enough to allow him to make several successful deliveries to Fujairah using air cargo companies. Then, in August 2014, customs agents at the airport in Arica stopped a pair of his couriers with 105 lb. of gold. The paperwork and the duo’s explanations about how they’d obtained the gold didn’t add up. The gold was seized, and Vilches was looking at his first legal trouble: a tax-evasion case, which has yet to be resolved.

    Vilches decided to abandon Fujairah. Fulfilling the contract would require dozens of buying trips or courier runs, and getting the gold to Dubai would involve massive logistical challenges. When the company asked about its overdue deliveries, Vilches invented excuses. But lawyers for Fujairah were convinced he was lying. They suspected he was selling to other companies on the side. Fujairah also came to the conclusion that the gold was illegal.

    Almost two years later, Vilches faced his first criminal charges, for fraud and appropriating $5.2 million from Fujairah Gold. Through his lawyer, Marko Magdic, Vilches denied the charges and said the only issue was a breach of contract. Fujairah continues to press claims in court to recover the money.

    As his relationship with Fujairah deteriorated, Vilches sought new buyers. He knew some of his Chilean clients were selling the gold he brought from Peru to NTR Metals in Miami. Soria, he told prosecutors, made an introduction. “I was cleared by the company’s compliance committee in more or less three weeks,” he told the FBI. Trey Gum, general counsel for Elemetal LLC, NTR’s parent company, says the company established a relationship with Vilches only after its representatives visited his companies in Chile. “The information NTR Miami received was that Mr. Vilches came from a family of established jewelers with close ties to the evangelical community in Chile,” Gum said in an emailed statement. Soria couldn’t be reached for comment. The offices of his company in Lima appear to have shut down, and its phone numbers are out of service.

    Vilches told prosecutors he then went to Florida and met with two NTR executives: Renato Rodriguez, executive sales director for Latin America, and Samer Barrage, who oversees the Miami operation. They sat down together at a restaurant in Coral Gables. “They knew something was up with my gold because it was so pure. ... A few months later I expressly told them it was contraband gold,” Vilches said. He also told prosecutors that Rodriguez and Barrage coached him on falsifying customs paperwork.

    None of this is true, according to Rodriguez and Barrage. Standing in the lobby of NTR’s Miami office, Rodriguez says the company trusted the documentation Vilches provided—as did, he points out, customs officials in Chile and the U.S. “All that stuff is made up,” he said. Barrage said in an email: “I want to be emphatically clear at no point did I have any knowledge whatsoever regarding his metal being sourced from illegal mining operations. There was absolutely no coaching or involvement regarding his export process or import process for that matter.”

    To maximize the appearance of legitimacy, Vilches wanted to cast his gold into brick-size ingots, with a seal identifying the weight and purity. It was a challenge—he’d watched his father do it, but he had almost no idea how to manage it himself. When he plugged in an imported machine to melt the gold, it shorted out and filled his office with black smoke; he’d neglected to buy a transformer so the equipment would work with Chile’s higher-voltage electrical system. Eventually, Vilches says, he and his father-in-law taught themselves how to make the ingots by watching YouTube videos.

    “NTR knows the gold is illegal. It’s cheaper than legitimate gold. That’s the business”

    In December 2014, Vilches made his first delivery to NTR Metals Miami, with a suitcase full of gold bars. That was how he capped his first full year in business, during which he shipped 3,119 lb. of gold valued at $57.4 million, export records cited in the criminal investigation show. Chilean investigators later cited 10 shipments from Vilches to NTR as clearly illegal because of falsifications in customs declarations and failure to pay taxes and duties on the initial importation of the gold.

    Chilean prosecutors say they have evidence NTR was aware the gold was illegal or contraband based on Vilches’s statements and his telephone, email, and text communications, all of which they’ve shared with U.S. investigators. “NTR knows the gold is illegal. It’s cheaper than legitimate gold. That’s the business,” says Tufit Bufadel, a Chilean prosecutor involved in the case.

    In early 2015, Vilches told the FBI, Rodriguez and Barrage summoned him to Miami to make a bold proposal. “They asked me to find a gold supplier in Africa,” he said. According to Vilches, the NTR executives proposed that he try to arrange a 1,000-kilo-per-month smuggling operation.

    Vilches was game. If he could pull it off, he’d be moving an estimated $20 million a month in dirty gold. But it was going to be complicated. “What they told me is that, because of compliance policies, they could not receive African gold,” Vilches told the FBI. “So they proposed that I export from Africa to Chile and then send it to Miami to NTR Metals.”

    Vilches flew to Dar es Salaam in Tanzania, where he spent almost a month viewing stashes of gold and negotiating with South African and Cameroon-based traders. He told the FBI he “maintained constant communications with Renato and Samer” about possible shipping routes. But he got scammed out of $300,000 by someone he thought was a supplier. The entire Tanzania affair unnerved him. At one point, he told the FBI, he was accosted by two carloads of armed men—probably government security forces, he thought—and held for hours in a grimy room while being interrogated about his business in Tanzania. He was relieved to escape with his life.

    Rodriguez and Barrage denied suggesting Vilches go to Africa. “In fact, in 2015 he asked if we purchased from Africa,” Rodriguez wrote in an email. “I unequivocally told him no and that it was a policy of NTR not to do so.” Barrage wrote: “There was ... no encouragement to source gold from Africa.”

    [​IMG]
    The bunker where Vilches processed gold and dummied up paperwork.
    Photographer: Tomas Munita for Bloomberg Businessweek
    Despite the setbacks in Tanzania, Vilches had a good 2015. He spent his money on a $1 million home adjacent to a lake with lilies and swans. He also invested $150,000 in a fortified building in Recoleta, a Santiago neighborhood where stray dogs roam streets strewn with trash. Graffiti-covered 12-foot walls topped with barbed wire surrounded a two-story building outfitted with Level 5 bulletproof glass and armored metal doors. Steel-reinforced walls and an array of 32 security cameras protected an inner sanctum. The final touch was a pepper spray system. “Even in a bank you don’t see such high-quality protection and security measures,” says Pérez, the Chilean prosecutor.

    It was here that Vilches toiled, usually alone, transforming his gold into the standard-size ingots needed to avoid raising suspicions at customs. He marked each with the precise weight and purity and added the seal of Aurum Metals LLC, a company he’d set up in Miami. It was also in the bunker that Vilches stashed cash and falsified documentation for the gold.

    Vilches told prosecutors that the NTR executives advised him to make videos of the refining process to better support his claims that the gold came from legal sources. He did that, and his marketing brochures carried photos of himself grinning while pouring liquid from a flask like a high school chemistry student, except that the flask was filled with liquid gold.

    NTR Metals Miami is one of the 49 offices of NTR Metals, also known as Elemetal Direct, one of eight divisions of Dallas-based Elemetal LLC. Elemetal Direct sells its gold as 99.99 percent pure bullion—and certified as coming from legal mines by industry groups. Those groups include the London Bullion Market Association, or LBMA, the industry’s self-regulating body, which counts officials from major banks and gold traders on its board. Elemetal dedicates a section of its website to certifications of quality and origin, including a copy of the LBMA’s “responsible gold certificate” from a “third-party audit of the company’s supply chain due diligence.” LBMA spokesman Aelred Connelly declined to comment about Elemetal’s certification.

    Another certificate comes from the Conflict-Free Sourcing Initiative of the Electronic Industry Citizenship Coalition, or EICC. It’s for Elemetal’s gold smelter in Jackson, Ohio. To renew the certification each year, Elemetal hires auditors to review purchase and import records, tour the smelter, and interview employees about the source of purchased gold. The mission is to assure that no gold comes from illegal mines that give rise to prostitution, labor abuses, and environmental damage or fund illegal activities or war, especially in Latin America, says Leah Butler, director of the conflict-free smelter program at the EICC. “We know that gold from Latin America is high-risk,” says Butler. She declined to comment on Elemetal, citing EICC rules. The organization “takes allegations of wrongdoing by any smelter or refiner in its program very seriously,” she says.

    Amjad Rihan, a former Ernst & Young auditor who specializes in researching commodity supply chains, says it’s easy to fool auditors. Rihan now works for Martello Risk, a London consulting firm that helps companies scour supply lines for illegal minerals. “The problem is these audits really don’t go beyond the paperwork,” he says.

    These seals of approval are critical across the industry. Under U.S. and European law, corporations must ensure their suppliers aren’t buying from mines that fund conflict. So they source gold from companies that are certified as having clean supply chains. Elemetal’s certified smelter is a valuable asset that allowed the company to supply 68 Fortune 500 companies in 2015 according to a Verité analysis of corporate conflict minerals reports, which are required under the U.S. Dodd-Frank Act. Those include Alphabet, Apple, GE, GM, and HP, the latest corporate filings show.

    According to Gum, Elemetal’s lawyer, NTR Metals Miami stopped doing business with Vilches on June 1, 2016, the day the fraud charge against him was filed, and “reported the matter to appropriate governmental authorities.” Elemetal also, “as a precautionary measure,” ordered NTR Metals Miami to “suspend all operations in Chile pending a review of current risks and procedures in that country,” Gum says.

    Vilches’s confessions took on the air of a performance. “All you lacked was the popcorn”

    On the night everything began to fall apart, when agents at the Santiago airport seized the five ingots in his carry-on, Vilches immediately called NTR, he told FBI investigators. Rodriguez and Barrage suggested, he said, that he forget about ever seeing that gold again and concentrate on getting the paperwork right the next time. NTR executives “gave me instructions to keep U.S. Customs from realizing my certificates of origin were false,” Vilches said.

    It seemed to work, for quite a while. Chilean police were itching to bust him, but prosecutors ordered detectives to stand down to gather more evidence. They were reluctant to give up on the idea of snagging someone higher than Vilches. And so he both imported and exported dirty gold without interruption.

    The net began to close in early 2016, when banks in Chile and Miami began filing suspicious-activity reports on Vilches’s huge cash transactions and shutting down his accounts. Then came the criminal complaint involving the Fujairah Gold contract. Finally, police arrested Vilches and seized $300,000 in cash and a small amount of gold from the bunker. Facing a multiyear jail sentence for money laundering and tax evasion, Vilches agreed to cooperate with law enforcement in both the U.S. and Chile. He also dropped out of college. Today, Vilches and NTR Metals are at the center of a sweeping criminal investigation by the U.S. Justice Department, Chile’s National Economic Prosecutor’s office, and law enforcement in Peru and Ecuador, according to Pérez, the Chilean prosecutor. Sarah Schall, a spokeswoman for the U.S. Attorney’s Office in Miami, declined to comment, citing policy against confirming or denying the existence of an investigation.

    In October 2016, FBI agents and prosecutors with the U.S. Attorney’s Office in Miami traveled to Chile to interview Vilches. After becoming convinced his information was legitimate, they told him he might get immunity in the U.S. from prosecution in exchange for his sworn testimony, people with knowledge of the probe say. As Vilches spent hour after hour in interrogation, FBI agents and Chilean detectives were both fascinated and entertained. Upwards of 15 law enforcement professionals crowded into a meeting room at Santiago 1, a sprawling prison complex, and Vilches fed off the attention. He laughed and seemed to shrug off the seriousness of his situation. His confessions took on the air of a performance, according to one of the investigators present. “All you lacked was the popcorn,” he says with a laugh. FBI agent Lourdes McLoughlin, the assistant legal attaché at the U.S. embassy in Santiago, declined to comment, citing a policy of not commenting on active investigations.

    In December the U.S. Attorney’s Office and FBI brought Vilches to Miami, where he told a federal grand jury that he was coached by NTR Metals Miami on how to set up his corporate structure in the U.S. to handle smuggled gold and then launder the proceeds, people familiar with the U.S. probe say. Elemetal and NTR Metals Miami didn’t respond to questions about an investigation.

    Vilches lived large only briefly. He’s traded down to an apartment along Gran Avenida, a thoroughfare in a tough Santiago neighborhood. Because of his cooperation, he’s unlikely to face additional jail time for smuggling. He still faces multiple criminal charges, including tax evasion.

    Chilean export regulations have been beefed up in the wake of the Vilches case. One gold dealer describes the new export process as similar to “being told to stand up against the wall and put your hands up.” Customs officials from Ecuador, Bolivia, and Peru have visited Chile to exchange information and compare notes. Pérez approves, but he has no illusions. If Vilches, without any particular advantages except his boldness, could get this far in the illegal gold trade, who else could? “I think there are 100 Vilcheses across Latin America,” he says. “It’s easier than it looks.”

    —With assistance from Ben Bartenstein

    https://www.bloomberg.com/news/features/2017-03-09/how-to-become-an-international-gold-smuggler
     
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  2. Montecristo

    Montecristo Silver Member Silver Miner

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    Interesting story. Although it seems it might come down to a case of Viliches word against NTR/Elemetal's word about just how involved they were in the process. If NTR/Elemetal was coaching him or if they were duped. It's hard to say.

    Possibly, the line in the article that points out the Viliches had set up 8 shell companies in Chile as well as Miami, seems to point to the likelihood that he may have been getting guidance as to how to set up companies in the US while being based in Chile, but the article doesn't really make that clear, so it's just speculation.
     
  3. Goldhedge

    Goldhedge Moderator Site Mgr Site Supporter

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    All this brew ha ha over a barbaric relic...
     
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  4. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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  5. Montecristo

    Montecristo Silver Member Silver Miner

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    Thank You for the update!

    This has had a ripple effect in the refiners I work with. One large refiner has sent out a packet requiring all updated info and AML policies of their customers, regardless of how long your working relationship has been with them. Another is in the process of reviewing info on file and have mentioned possible updating files and policies.
     
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  6. About.Ag

    About.Ag Seeker Seeker

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    ... and Elemetal Refining, a/k/a OPM (Ohio Precious Metals) is now shutting down operations.

    I'm keeping track of what is going on (mainly how it relates to Provident Precious Metals) at http://about.ag/Elemetal/ .
     
  7. Montecristo

    Montecristo Silver Member Silver Miner

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    Woah!
    I'm glad you posted! Thank You!
     
  8. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    so let me get this straight, gold demand is increasing decently over the past decade,

    and this insatiable demand is only being met by illegal gold mining which is only illegal because someone says it is,

    and yet price has less than doubled over the period, about 700 to 1260 or so.

    which is all good and all, but doesn't speak to the massive amounts of fiat created worldwide that is being tossed around.

    amazon is up some stupid number like 2300% over that period,
    etc.

    hmmm, from the us mint website, mintages

    Gold Eagle Coin Mintage


    Date 1 oz. 1/2 oz. 1/4 oz. 1/10 oz.
    1986
    1,362,650 599,566 726,031 912,609
    1987 1,045,500 131,255 269,255 580,266
    1988 465,500 45,000 49,000 159,500
    1989 415,790 44,829 81,789 264,790
    1990 373,210 31,000 41,000 210,210
    1991 243,100 24,100 36,100 165,200
    1992 275,000 54,404 59,546 209,300
    1993 480,192 73,324 71,864 210,709
    1994 221,663 62,400 72,650 206,380
    1995 200,636 53,474 83,752 223,025
    1996 189,148 39,287 60,318 401,964
    1997 664,508 79,605 108,805 528,515
    1998 1,468,530 169,029 309,829 1,344,520
    1999 1,505,026 263,013 564,232 2,750,338
    2000 433,319 79,287 128,964 569,153
    2001 143,605 48,047 71,280 269,147
    2002 222,029 70,027 62,027 230,027
    2003 416,032 79,029 74,029 245,029
    2004 417,019 98,040 72,014 250,016
    2005 356,555 80,023 72,015 300,043
    2006 237,510 66,005 60,004 285,006
    2007 140,016 47,002 34,004 190,010
    2008 710,000 61,000 70,000 305,000
    2009 1,493,000 110,000 110,000 270,000
    2010 1,125,000 81,000 86,000 435,000
    2011 857,000 70,000 80,000 350,000
    2012 667,000 71,000 76,000 315,000
    2013 743,500 58,000 122,000 535,000
    2014 415,500 46,000 118,000 656,000

    10 years ago, they minted 664K units 1 oz
    2014 they minted 415K units 1 oz
     
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  9. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    FWIW................

    Elemetal Scandal Fallout Letter
    TruthNeverTold



    Published on Apr 12, 2017
     
  10. About.Ag

    About.Ag Seeker Seeker

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    The latest is that a glass manufacturer has sued Elemetal Refining (a/k/a Ohio Precious Metals) over $650K of silver they sent to Elemetal that Elemetal was supposed to refine for them and send back.

    According to the lawsuit, this is the property of the glass company, but Elemetal is not returning it, with the only explanation shown being the bank lien. Of course, if the metal truly belongs to the glass company, Elemetal cannot have a lien against it.
     
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  11. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    What Does the Elemetal Scandal Say About Gold Prices - Update 1

    [​IMG]
    by Vince Lanci
    Apr 27, 2017 3:47 PM


    What Does Elemetal Imply for Precious Metals?
    • Gold smuggling accounts for up to 75% of all LATAM Gold imported in the US
    • Disruption of this augmented Gold supply is Bullish for Gold
    • Elemetal is running for corporate cover
    • No-one cares
    UPDATE 1 - DGSE a publicly traded retailer, just signed an LOI to buy Elemetal, LLC. It gets better. DGSE is #2 on the S&P list of likely retailers to default. Wait, there's more. Elemetal is actually majority shareholder in DGSE. Essentially, Elemetal, which controls DGSE would rather default, then have the real depths of its activities revealed. Details and Elemetal structure at bottom.

    Gold Supply Augmented with illegal Supply

    via the Soren K.Group and Marketslant

    In the past decade and a half, global gold consumption has risen by almost 1,000 tons a year, to about 4,300 tons, according to the World Gold Council, a London-based industry group. Legal mining operations haven’t kept up with demand, so illegal mines controlled by criminal gangs, from the Amazon to central Africa, help cover the deficit, according to Verité, a nonprofit group in Amherst, Mass., that’s researched the illegal gold trade. A 2016 Verité study found that five countries in Latin America shipped 40 tons of gold from illegal mines to the U.S. in one year, almost twice the legal exports from those countries. pdf here

    ?[​IMG]

    Simply put:
    1. Elemetal's Sources of metal for refinement were illegal.
    2. This implies higher prices via loss of black market source discounts and raw supply that was artificially augmented.
    3. Florida is (still) the source of all our woes.
    4. Bloomberg will GLADLY cover the Gold Scandal, but not the Supply/ Demand implications.

    The Press Demonizes Gold More
    GOLD, SCANDAL, EVIL, DRUGS - buy stocks: We searched the web but were hard pressed for a single Bloomberg article that states the obvious: This implies Gold demand is outstripping legitimate supply and is bullish for prices. We find this annoying since Bloomberg is the primary source for the info above.

    Bloomberg:

    The charges signal a U.S. crackdown on smugglers exploiting a spike in worldwide consumption of gold mined illegally in the Amazon basin, where laborers use fire hoses and mercury to extract the nearly pure precious metal.

    Note in the above that gold buyers are exploited. Gold is tied to drugs and illegal activity. It is true in this case, but the implications aren't bad for Gold. As they demonize cash to eradicate it, Gold is now being tied to crime. This is typical, and it is a canard utilized to steer you away from an investment tool that cannot be branded or properly securitized yet. Have you ever read an article saying "Drug Traffickers used US Bearer Bonds to hide their money. Be careful of US Bonds, they could be illegally obtained!"

    There is a phrase in the trader community that goes like this: Gold miners and Gold are not in the FOB club. (Friend of Bloomberg)


    [​IMG]?

    Interactive chart HERE

    The Illegal Venezuelan Oil for Bonds Trade

    Meanwhile we are pretty sure that Venezuelan officials have made illegal sales of oil cargoes, purchased US Bonds with the cash through accounts in the Caribbean and those bonds are now being held in custodial accounts at US Banks for their later benefit.

    It goes like this. A Venezuelan dictator who is in danger of losing control must solidify his military support. so he tells a general, "See that tanker over there? It's a gift to you. Keep the money that the oil sells for". General does just that, and exports that cash to the U.S. The dictator lives to rule another day.

    How do we know? One of our group was asked to retrieve some of those US held bonds for a South American military official probably getting ready to skate out of Venezuela. We had actually reported this to US officials, and have heard nothing since. It is rampant. And it is electronic. And those bonds are in US banks.

    But Gold? That inert yellow pet rock? It is a means to launder drug money.

    ?[​IMG]

    So if illegal gold production is rampant in Latin America, and in several countries, unregulated illegal and informal mines account for over 75 percent of gold produced as the Verite report states; Why is this not being addressed? Where are Crocket and Tubbs when you need them?

    Why hasn't this been stopped? Aren't we supposed to follow the money to catch smugglers? How hard can it be to catch money that conspicuous? Maybe it is because we want Gold prices to be low. Maybe some banks benefit from this. That is not crazy when one realizes that HSBC got its start in the Opium trade.

    Maybe They Want The Cheap Gold to Keep Flowing
    To put a finer point on things. There is a historical correlation between supply disruptions in commodities and price increases. Studies from as far back as Victorian era England consistently find that a 5% disruption in supply of a product with no change in demand creates roughly a temporary 20% increase in price.

    To be fair, temporary supply disruption varies in its effect on immediate prices depending on the product disrupted. But by many measures, gold is a Giffen good. So what would happen if all of a sudden 75% of all the LATAM gold produced were unavailable for purchase?

    Recent examples would be the manipulation of Natural gas supply to California by Enron et al, and the subsequent price spikes. Another would be the short lived Oil shock of 2007- 08.

    How crazy is it that upwards of 75% of LATAM gold is illegally mined, much of it used for drug money laundering, it weighs a ton, and the US has not cracked down on it? But we are all over Blood Diamonds, which are infinitely easier to smuggle than 100 lbs of gold right?

    So the Elemetal fiasco is telling of a bigger issue. That gold supplies are augmented with illegally procured metal. And no one cares. Elemetal doesn't seem to care


    Elemetal Moves Forward... kind of
    Here is the most recent Letter coming from Elemetal. It is actually a marketing piece.

    [​IMG]

    Dear valued Elemetal Capital customer,
    Elemetal Capital will be performing an inventory audit over the next 14-21 days. We kindly ask for your cooperation by not making any new bullion sales to Elemetal Capital or sending any material to us during this time.
    Your in-transit packages and sales booked to Elemetal Capital before this notice of inventory will be priced as agreed.
    Material shipped to us after this notice and during the limited audit period, however, (including private-mint bars, rounds, sovereign mint coins, standard-recognized bullion) will be forwarded to our scrap channels for lock-in at the following scrap rates:
    Metal Elemetal Buy
    Gold 99% of fine content
    Silver 95% of fine content
    Platinum 95% of fine content
    Palladium 95% of fine content

    Please note that the usual scrap business of Elemetal Direct is unaffected by this Elemetal Capital inventory.
    We'll announce very soon when we will resume accepting bullion at market rates.
    All the best,
    Elemetal Capital

    CME Group and the London Bullion Market Association had suspended Elemetal Refining LLC last week from trading gold and silver futures on its exchanges. Why are these people even allowed to be in business? Silver Doctors have been all over this from day 1. in fact they have been all over this type of risk from day negative100

    Via Silverdoctors.com

    Federal Agents have arrested NTR Metals Manager Juan Granda, the self-proclaimed “Modern-Day Pablo Escobar” of Gold over charges the US Gold & Silver Firm smuggled $BILLIONS of illegally mined gold into the US:

    As Bloomberg reports, NTR Metals Company Manager Juan Granda has now been arrested and charged: The operations manager at a metals-refining company was charged with helping run a gold smuggling network that reaped billions of dollars for illegal mines controlled by drug dealers and other criminals in South America.

    Officials believe NTR smuggled nearly $4 Billion in illegally mined gold beginning in 2012..

    full story HERE

    In 2013, Peru seized $18 million worth of gold bound for refineries in Miami and elsewhere, including NTR. The rest "got away" we guess?

    What is Going on Here?
    South American smugglers and drug traffickers laundered money through sales of illegally mined gold from the Amazon rain forest. They sold it to NTR personnel in Latin America. The NTR people through various transactions laundered their purchases in other South American countries as the gold made its way to the U.S. Some of that gold then entered the U.S. via "legitimate Florida businessmen" acting as a final intermediary for the laundering process.

    [​IMG]

    Violetas: Florida Gold Laundromat?

    Bloomberg

    “Virtually all of the gold NTR purchased from Ecuador, including the gold from Spartan del Ecuador, was routed through an intermediary company, MVP Imports,” according to the U.S. complaints. U.S. customs records show MVP Imports as the importer, “masking” NTR’s role as the “ultimate purchaser” of the gold, the prosecutors said. More here

    MVP Imports: a high end knickknack store for the rich in Coral Gables may actually be a laundromat. The company is run by a prominent businessman in Florida, that is accused of being listed in customs records as the buyer of much of the smuggled gold NTR bought, masking the fact that NTR bought it.

    What is NTR and what does that have to do with Elemetal ?
    Elemetal is the parent company of NTR. The list below is believed to be accurate:

    This is a list of many/most of the Elemetal-related companies (including both corporations and names they do business as). Some are likely no longer operating; many of the "NTR" companies are likely now operating as Elemetal.

    Deceive, Obfuscate, Inveigle Inc.
    • Echo Environmental Waverly LLC (subsidiary of Elemetal LLC)
    • Elemetal Capital, LLC (wholesale trading of physical, derivatives, Forex)
    • Elemetal Diamond, LLC (diamonds)
    • Elemetal Direct (described as recycling/refining, and direct-to-customer locations, and NTR Metals)
    • Elemetal Direct Americas, LLC (was NTR Metals (Americas), LLC until June, 2015)
    • Elemetal Direct USA, LLC
    • Elemetal Fabrication, LLC (was Pete's Custom Metal, Inc., then NTR Custom Metals, LLC)
    • Elemetal Insurance and Logistics, LLC (unknown)
    • Elemetal Management (unknown)
    • Elemetal Mint (private minting of bars/coins)
    • Elemetal Minting, LLC (perhaps Elemetal Mint is a DBA of this LLC?)
    • Elemetal Online (Provident Metals)
    • Elemetal Recycling, LLC (processing electronic waste; was Echo Enivironmental)
    • Elemetal Refining, LLC (was OPM Metals, a/k/a Ohio Precious Metals)
    • Elemetal USA, LLC (unknown purpose)
    • Elemetal Vault (vault service, trading)
    • Provident Precious Metals, LLC
    • NTR
      • NTR Bullion Group, LLC (owned by NTR Metals, LLC; handled physical metals transactions)
      • NTR Futures (owned by NTR Metals, LLC; handled futures contracts)
      • NTR Metals (d/b/a only?)
      • NTR Metals, LLC
      • NTR Metals (Americas), LLC (now Elemetal Direct Americas; Sam Lewis, President)
      • NTR Metals Belgium Holdings, LLC
      • NTR Metals Canada Ltd. (dissolved 18 Jul 2013)
      • CI NTR Metals Colombia S.A.S. (founded 24 Aug 2011)
      • NTR Metals Europe, LLC
      • NTR Metals Group, LLC
      • NTR Metals HK Ltd
      • NTR Metals (Hong Kong) Limited (started October 2009)
      • NTR Metals International, LLC
      • NTR Metals Investments, LLC
      • NTR Metals (UK) Ltd. (is/was wholly owned by NTR Metals International, LLC)
      • NTR Metals Latin America (parent company of NTR Metals Zona Franca S.A.S; President Mr. Barrage)
      • NTR Metals Miami, LLC
      • NTR Metals Pacific Rim, LLC
      • NTR Metals Real Estate, LLC (appears to own 10720 Composite Drive, Dallas)
      • NTR Metals South America, LLC
      • NTR Metals Texas, LLC
      • NTR Metals USA, LLC
      • NTR Metals West, LLC
      • NTR Metals Zona Franca S.A.S. (Columbia; subsidiary of Elemetal, LLC)
    • DGSE Companies, Inc. (Elemetal is a majority shareholder; had 69 employees as of December 31, 2015)
      • Dallas Gold & Silver Exchange, Inc. (9 stores around Dallas; now just 4?)
      • Charleston Gold & Diamond Exchange, Inc. (1 store in Mount Pleasant, SC)
      • Fairchild International (wholesale watches; website not responding 14 Mar 2017)
      • Southern Bullion a/k/a Southern Bullion Coin & Jewelry (defunct; acquired in 2011 with 23 locations)
      • SBT, Inc. (Southern Bullion Trading, related to Southern Bullion Coin & Jewelry, Inc.; was owned by NTR)
      • U.S. Bullion Exchange (DGSE Company's online trading 'arm').
    Florida...Climate change can't swallow it fast enough

    Good Luck

    UPDATE 1: DGSE is a retailer in serious trouble itself. Posted today are the S&P Top Ten Retailers at Risk of Default per the WSJ. DGSE takes second place. Somehow, we doubt the complicated structures and the DGSE buyout aren't to make things more transparent for investigators

    1. Sears Holdings (SHLD -3.5%) with a 23.84% probability of default.
    2. DGSE Companies (DGSE -1.2%)
    3. Appliance Recycling Centers of America (ARCI -1.1%),
    DGSE Companies, Inc. (NYSE MKT:DGSE) (“DGSE” or the “Company”), a leading wholesaler and
    retailer of jewelry, diamonds, fine watches, and precious metal bullion and rare coin products, today announced that it has entered into a non-binding Letter of Intent with Elemetal, LLC (“Elemetal”) to acquire the tangible personal-property assets of Elemetal and Elemetal Recycling, LLC (“Recycling”) at 2101 W. Belt Line Road, Carrollton, Texas, the equipment at 10707 Composite
    Drive, Dallas, and certain accounts receivable of Recycling. The total estimated cash proceeds to Elemetal and Recycling from the sale and from the payment by DGSE of approximately $3.8 million of obligations owed by DGSE to Elemetal is $19.8 million. In addition, DGSE would assume certain accounts payable of Recycling.

    http://www.zerohedge.com/news/2017-...-its-tracks-and-why-isnt-gold-higher-update-1
     
  12. About.Ag

    About.Ag Seeker Seeker

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    <sigh>

    I just love how so many people think they can be a journalist by writing something. Or copying my work.

    They say DGSE is going to buy Elemetal, LLC, which is not true: DGSE is planning on buying a small subsidiary of Elemetal (Elemetal Recycling, which Elemetal bought when it was Echo Environmental). And how can you trust a story when the author cuts-and-pastes a bunch of it (see my page at http://about.ag/Elemetal/Elemetal-NTR-Provident.htm )? If you want the real Elemetal news (rather than the hype), I've been tracking Elemetal/NTR for about a month now nearly 24x7, at http://about.ag/Elemetal/ .
     
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  13. Bottom Feeder

    Bottom Feeder Hypophthalmichthys molitrix Gold Chaser Site Supporter

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    You get 'em, Ag. Your work, your stuff.
    BTW, really nice site you have there at allengelhard.com. Been on there for years.

    BF
     
  14. About.Ag

    About.Ag Seeker Seeker

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    Thanks for the kind words. FWIW, Marketslant listened, and took care of properly attributing that portion of the article, and fixed it at zerohedge.

    And while I'd like to take credit for allengelhard.com, I cannot take much credit: while I did the initial legwork (back when it was hosted at about.ag), someone else took over those pages and runs the allengelhard.com site (with my blessings). He added a *lot* to what I did, making the site look nicer, adding lots more varieties, adding more detailed mintage information, more research, and so forth.
     
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  15. Bottom Feeder

    Bottom Feeder Hypophthalmichthys molitrix Gold Chaser Site Supporter

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    OK, then pass on my kudos to the appropriate person if you will. You both have done a good job over there. It's my go-to site whenever I snag a new engelhard. They're gettin fewer and farther between, not to mention the fact that all of a sudden they're popular to counterfeit.

    BF
     
  16. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    $3.6 Billion Money Laundering Case Rocks Precious Metals Industry
    SalivateMetal



    Published on Sep 10, 2017
     
  17. Howdy

    Howdy Silver Member Silver Miner

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    Fascinating story. Chile is a corrupt country where bribing officials is standard procedure. Our own Government takes it's orders from bankers. Most likely only about 60% of this story is true with key details left out.
     
  18. Winston_Room101

    Winston_Room101 Seeker

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