By Federal Bureau of Investigation (FBI) ….
EDITOR’S NOTE: CoinWeek published an in-depth report on this investigation on April 17, 2017. —CW
U.S. Gold refinery Elemetal LLC, based in Dallas, Texas, doing business as “Elemetal” and “NTR Metals”, pled guilty today to a single-count information charging Elemetal with failure to maintain an adequate anti-money laundering program, in violation of the Bank Secrecy Act, as part of a plea agreement with the United States Attorney’s Office for the Southern District of Florida.
Randy A. Hummel, Executive Assistant United States Attorney, U.S. Attorney’s Office for the Southern District of Florida; Mark Selby, Special Agent in Charge, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office; Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Carlos L. Mitchem, Regional Director, Drug Enforcement Administration (DEA-Peru), Southern Cone Region; Adolphus P. Wright, Special Agent in Charge, Drug Enforcement Administration (DEA-Miami), Miami Field Office; and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office, made the announcement.
On March 12, 2018, Elemetal was charged in a sealed, single-count information for failure to maintain an adequate anti-money laundering program under the Bank Secrecy Act (“BSA”). The case is U.S. v. Elemetal LLC, Case No. 18-20173-CR-MORENO. On March 16, 2018, U.S. District Judge Federico A. Moreno unsealed the information and accepted Elemetal’s guilty plea.
According to the stipulated facts filed with the court, from August 2012 through November 2016, Elemetal purchased and refined billions of dollars of gold from countries around the world, including from Central America, South America, the Caribbean and Europe. The international gold trade was a common method for laundering illegally mined gold, narcotics and other criminal proceeds. Criminals frequently trade illegal gold through illicit shell companies using false or incomplete documents. The gold is often smuggled through third-party countries and then sold to refineries in the United States, in an effort to hide the true source of the gold from foreign and United States law enforcement.
Recognizing the high risk of gold-based money laundering, federal law requires precious metals dealers to establish anti-money laundering programs, under the BSA. Elemetal was subject to the BSA and aware of its obligations, but willfully failed to develop, implement, and maintain a reasonably designed anti-money laundering program as required. More specifically, according to the stipulated facts filed with the court, Elemetal:
- Accepted gold from persons and entities without requesting or obtaining adequate, or in some instances any, identification and information regarding those persons or the source of their gold, including from: third-parties in foreign countries directly providing gold to the defendant on consignment to the defendant’s approved customers; third-parties in foreign countries who the defendant knew to be supplying gold to the defendant’s approved domestic customers; and third-parties in foreign countries who appeared as the manufacturer or shipper of the gold on U.S. customs declarations;
- Accepted gold from foreign gold suppliers who represented themselves to be “gold collectors,” a vague business that involves nothing more specific than someone who buys gold from others without requesting or obtaining adequate, or in some instances any, information as to the source and origin of gold;
- Accepted gold from countries and customers where the defendant’s country-by-country and customer-by-customer sales volume records indicated that gold was likely being smuggled across borders in response to law-enforcement crackdowns and that customers were using rotating front companies, without requesting or obtaining adequate, or in some instances any, follow-up information as to the source and origin of gold;
- Accepted gold from specific customers and suppliers where open-source and publicly available information indicated that those specific customers and suppliers were supplying criminally derived gold, without requesting or obtaining adequate, or in some instances any, follow-up information as to the source and origin of gold;
- Failed to request or obtain adequate, or in some instances any, follow-up information as to the source and origin of gold where open-source and publicly available information indicated that the defendant or the defendant’s agents were purchasing criminally derived gold; and,
- Failed to request, obtain, preserve adequately, or in some instances any information regarding the content of communications between gold suppliers and the defendant’s agents occurring on encrypted, peer-to-peer chat services, such as WhatsApp or Skype.
Pursuant to the terms of the Plea & Forfeiture Agreement filed with the court, Elemetal has agreed to recommend that it forfeit $15,000,000 to the United States, develop and maintain an effective compliance and ethics program, and be subject to a five-year term of probation, during which time it will be prohibited from purchasing precious metals from outside the United States and required to comply with all further investigations. U.S. District Judge Federico A. Moreno will determine Elemetal’s sentence at a later hearing.
Former NTR Metals Miami employees, Samer H. Barrage, Renato J. Rodriguez, and Juan P. Granda previously pled guilty to conspiracy to commit money laundering in related case, U.S. v. Barrage, et al., Case No. 17- 20215-CR-SCOLA. On January 19, 2018, U.S. District Judge Robert N. Scola sentenced Barrage and Granda to 80 and 72 months’ imprisonment respectively, and on January 31, 2018, Judge Scola sentenced Rodriguez to 90 months’ imprisonment.
These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF) Operation Arch Stanton, a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
Mr. Hummel commended the investigative efforts of ICE-HSI, FBI, DEA-Peru, DEA-Miami, and IRS-CI. Mr. Hummel also thanked the Department of Justice’s Money Laundering and Asset Recovery Section, the Department of the Treasury Financial Crimes Enforcement Network, and the U.S. Customs and Border Protection for their assistance in this matter. This case is being prosecuted by Assistant U.S. Attorney Francisco R. Maderal.