FinCEN often has contrarian views on financial matters. When it comes to gold, the organization is convinced there is a clear link to drug gangs. More specifically, the gold in one’s smartphone or car has close ties to the criminal underworld.
A Shady Gold Refinery
All of this has to do with a recent discovery of Kaloti. The Dubai-based precious metal trader is suspected of purchasing gold from criminal networks. More specifically, he was involved in laundering drug money by selling gold into the global supply chain. That gold is then used to manufacture car parts and modern smartphones.
A very worrisome discovery, although not one that affects owners of such devices directly. Kaloti has sold tons of gold to supply chain partners of Apple, Amazon, and many others. As such, the people buying these devices have – unknowingly – funded criminal activity.
Interestingly enough, all of this could have been prevented. The US Treasury knew of this problem back in 2014, yet decided not to take any action. As such, the sale of dubious gold continued, while the Treasury looked the other way. All of this has now been uncovered by FinCEN.
Laundering money through gold and other precious metals is not entirely unique. In fact, it is a scheme that could have gone by unnoticed for many more years. The downfall of Kaloti is triggered by his acceptance of wire transfer from criminal organizations. Doing so always leaves a trail of breadcrumbs waiting to be followed.
FinCEN : Billions of Dollars in Suspicious Transactions
According to documents submitted by Barclays and Deutsche Bank, Kaloti is involved in suspicious transactions adding up to $9.3 billion. A vast sum of money, that would have been much smaller if the US Treasury had taken appropriate action. To this day, Kaloti denies any criminal activity or engagement with shady individuals.
Making matters worse is how Valcambi may have purchased gold directly from Kaloti. The report was denied by Valcamib, yet put the entire bullion industry on notice. FinCEN is still investigating this entire ordeal. It is likely that more unsavory details will come to light in the near future.