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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Supply-chain compliance lessons from a ‘true crime’ masterpiece

Dirty Gold tells the incredible story of “the three amigos”– Miami businessmen who smuggled billions of dollars in gold from South America.

I spoke recently with the book’s authors, an award-winning team of current and former reporters from the Miami Herald.

What sparked your interest in this story?

As the Miami Herald’s federal courts reporter, I (Jay Weaver) came across sensational criminal stories with money laundering angles all the time. But nothing compared to the gold-smuggling network between South America and Miami.

When the $3.6 billion NTR Metals money laundering case was filed in Miami federal court in 2017, I was struck not only by the dollar signs but also the vast gold-smuggling operation behind it. Then, upon further reporting, I learned that South American drug traffickers dominated the illegal gold trade in the Amazon region. Once I established that foundation, I knew this was not your garden-variety money laundering story.

I turned to Nicholas Nehamas, a Herald investigative reporter with background in the Panama Papers coverage, and Herald colleagues Jim Wyss, and Kyra Gurney, who had experience reporting in Latin America. Our team effort was recognized as a Pulitzer Prize finalist in explanatory reporting in 2019.

You revealed that U.S-based multinationals were involved in the recovery, trading, and refining of the minerals. What would you say today to a compliance leader that might feel pressure from their business peers not to “slow things down?”

Any compliance leader who feels pressure from their business peers to stop “slowing things down” needs to react immediately with the highest urgency and emphasize exactly why slowing things down is necessary to keep the company in business — and potentially keep its employees out of prison.

We would urge compliance officers feeling this kind of pressure to show their colleagues exactly what happened to NTR Metals after employees not only ignored the advice of their compliance officer, Steve Crogan, but actively misled him.

Compliance work is difficult and takes time. Suppliers need to be carefully vetted.  When compliance officers are allowed to do their jobs, they can avert disaster.

Can any company have confidence in its natural-resource supply chain ?

Gold is notoriously difficult to trace because it can easily be melted down and smuggled across borders, but there are steps buyers of gold and other natural resources can take to mitigate the risks of supporting illegal mining, child labor, and other serious problems.

Companies can start by following due diligence guidance from the Organization for Economic Co-operation and Development and the Financial Action Task Force, which offer recommendations to help companies avoid buying minerals and metals that fund conflicts and contribute to human rights abuses.

Look out for red flags, like mine and export company owners who have no history in that particular industry or who don’t appear to have the resources to be the beneficial owner of a company that size. And most importantly, create a clear culture of compliance in organizations so that employees know responsible business practices come before profits and feel comfortable speaking up when they notice red flags.

Did NTR Metals’ plea deal satisfy federal prosecutors and agents?

This was a huge tension between the prosecutors and agents involved in the prosecution of the NTR Metals employees. It can be very difficult to prove that managers have knowledge of their employees’ actions. Despite poring over tens of thousands of pages of text messages, emails and corporate documents, prosecutors felt they would be unable to prove beyond a reasonable doubt that the executives at NTR’s parent company, Elemetal, knew their Miami-based traders were breaking the law or that the executives had participated in illegal gold trading activity in any way. Instead, they chose to charge Elemetal and impose a fine for not having a sufficient anti-money laundering program without bringing charges against individual managers.

In contrast, several of the agents felt strongly that the only way to send a clear warning shot to the industry was to charge the executives. They looked at the lessons of the financial crisis, how Wall Street seemed to go back to business as usual as soon as the storm had passed. They didn’t want that to happen again. But the prosecutors felt that charging the NTR employees and the parent company, Elemetal, would be enough to dissuade other potential bad actors from repeating the NTR traders’ crimes.

Certainly, the case sent a shock-wave through the precious-metals industry and raised public awareness about the perils of dirty gold and the role all American consumers play in promoting it. But we have seen no decrease in the problems of illegal mining in Latin America.

Should compliance leaders consider the “wider societal toll” of their company’s behavior in their ethics and compliance training initiatives?

It’s human nature to develop strategic blind spots for our individual role in larger societal ills. Many of the people we talked to for Dirty Gold rationalized their behavior, minimizing their perceived part in the societal and environmental harms caused by the illegal gold trade. It’s critical that compliance leaders help their business peers recognize the wider societal consequences of unethical and illegal behavior so they understand that the decisions they make in boardrooms and over business lunches can have devastating consequences for communities and the environment.

Big criminal investigations are typically marred by complex turf wars among enforcement agencies. This case seemed different. Did that surprise you?

The level of inter-agency cooperation in the case we wrote about in Dirty Gold was so rare that the lead federal prosecutors called the group of investigators “The Fellowship of the Ring” after the characters who banded together in The Lord of the Rings.

Once you add law enforcement agencies from other countries — operating in different cultural and legal contexts and languages — into the mix, building trust and cooperation becomes even more difficult. In our globalized world, however, criminal groups are becoming more and more international, which means that law enforcement officials will increasingly have to work across agencies and borders in order to combat them.

In that vein, Western European countries often share evidence through mutual legal assistance treaties with the United States to target people suspected of laundering tainted proceeds from drug trafficking, foreign corruption, and other illicit activities. But the fundamental hurdle in these so-called MLAT agreements is the bureaucracy of sharing incriminating financial information, which is often protected under strict foreign privacy laws. It can take two to three years to obtain vital evidence in an international money laundering case — valuable time that undermines the ultimate goal of filing indictments within the statute of limitations.

Are companies and their regulators heading in the right direction toward clean supply and sales chains? Or will demand dictate some form of supply — with or without integrity?

In the aftermath of the 9/11 attacks, Congress imposed stricter requirements on precious metals dealers to comply with Know Your Customer provisions under the Bank Secrecy Act by adopting robust anti-money laundering compliance programs. This was familiar ground for banks and other financial institutions, but new terrain for precious metals dealers.

In the aftermath of the Great Recession, major U.S. corporations such as Apple, General Motors, and Tiffany were then required under the Dodd-Frank Act to develop AML compliance programs and disclose their sources of gold and other precious metals. While these measures were designed to clean up the international trading of gold, they didn’t stop NTR Metals and its parent company, Elemetal, from turning a blind eye to illicit gold exporters in Peru and other South American countries.

The reality is, unless a U.S. company buys gold directly from a refiner that gets its supply from a single legal source in South America, or a “fair mined” source, it’s very difficult to know whether the precious metal is legal. That’s because so much gold is mined illegally in South America and sold through intermediaries (aggregators) who falsify paperwork and bribe customs officials. By the time much of this gold is exported to the United States, it has passed through multiple intermediaries.

Thank you for your time, and Dirty Gold certainly made for a fascinating and compelling compliance read.


Dirty Gold: The Rise and Fall of an International Smuggling Ring was an “Amazon Best Book” of March 2021 and is available here.

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