Miami Judge orders US company at the center of Gold Scheme to pay $15 million fine

Under a recent ruling, the precious metals company, Elemetal LLC, must pay a criminal penalty of $15 million to the U.S. government. Additionally, they are known as “Elemetal” and “NTR. The company will be on probation for five years. So, a judge convicted three Miami gold dealers of a massive money laundering scheme. They had worked for Elemetal subsidiary NTR.

A judge handed Elemetal, from Dallas, Texas, a sentence on March 16, 2018. Elemetal admitted they failed to maintain a compliance program put into place under the Bank Secrecy Act. (“BSA”). This was to stop its gold dealers from carrying out a $3.6 billion money laundering scheme. Hence, the scheme has to do with U.S. imports of gold. Specifically, illegally mined and smuggled gold into the United States from South America. The immense conspiracy included deals with drug traffickers through Elemetal’s NTR Metals.

Facts filed with the court:

Below are the stipulated facts filed with the court. To elucidate some of the BSA regulations, Elemetal:

  • First, accepted gold from persons and entities without requesting or obtaining adequate identification.

    • Or, information regarding those persons or the source of their gold. This includes: 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.
  • Second, accepted gold from foreign gold suppliers who represented themselves to be “gold collectors.”

    • This is 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.
  • Third, accepting gold from countries and customers where the defendant’s country-by-country and customer-by-customer sales volume records.

    • This indicates that gold was likely 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.
  • Fourth, taking gold from specific customers and suppliers were open-source and publicly available information indicates that those particular customers and suppliers were supplying criminally derived gold.

    • They went without requesting or obtaining adequate, or in some instances any, follow-up information as to the source and origin of gold.
  • Fifth, failure to seek or obtain adequate, follow-up information as to the source and origin of gold.

    • This is where open-source and publicly available information indicated that the defendant or the defendant’s agents were purchasing criminally derived gold.
  • Lastly, 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.

    • Especially occurring on encrypted, peer-to-peer chat services, such as WhatsApp or Skype.” – United States Department of Justice

Elemetal gold scheme source and origin of gold

Recently, the Miami Herald did an investigative series called “Dirty Gold, Clean Cash”.

It uncovered the connections between South Florida’s gold industry and the devastation of large portions of South American rainforests where illegal gold mining thrives under the control of drug traffickers and other criminal enterprises. Furthermore, Elemetal was one of the focal points of the Herald’s piece.

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Crime and Punishment

The company plans to satisfy $10 million of the forfeiture imposed by the U.S. Attorney’s Office, Southern District of Florida, by letting the Peruvian government keep a portion of its gold seized by authorities there in 2013. And, this is according to Elemetal’s attorneys. U.S. District Judge, Federico Moreno, approved a credit towards the company’s substantial fine if Elemetal releases a legal claim on the Peruvian gold. Separately, Elemetal must pay $5 million to the U.S. government to satisfy the balance of the forfeiture approved by Moreno. So, this is as part of the probationary sentence. Furthermore, Elemetal lawyers have indicated that the company has already paid $1 million toward that total.

According to the plea agreement, if Elemetal fails to pay the total $15 million, the company could be found in violation of its probation and might face more serious criminal charges. These include participating in the money laundering conspiracy itself. Additionally, Elemetal had to close its main precious metals refinery in Ohio. They also can’t trade on gold bullion markets. If it somehow manages to stay in business, the company must show that it can maintain a robust anti-money-laundering program that would meet BSA requirements while it is on probation. Elemetal has since shut down NTR Metals, which is in Doral, Florida.

Federal Prosecution

The federal prosecutor, Francisco Maderal, cited a BSA law broken by Elemetal. Apparently the company “willfully failed to develop, implement and maintain an anti-money-laundering program reasonably designed to prevent Elemetal from being used to facilitate money laundering and the financing of terrorist activities.” Also, Elemetal’s guilty plea follows the convictions of three of Elemetal’s gold dealers. So, they bought billions in illegally mined and smuggled gold from drug-trafficking organizations based in Peru, Ecuador, Bolivia, and Colombia. The employees, who worked for NTR, were Samer Barrage, 40, Juan Granda, 36, and Renato Rodriguez, 44. A judge sentenced them to six-seven years in prison. This was after pleading guilty to a $3.6 billion money laundering conspiracy last year.

This case is the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (“OCDETF”) Operation Arch Stanton. OCDETF is a partnership between federal, state and local law enforcement agencies. Also, the OCDETF mission is to identify, investigate, and prosecute high-level members of drug trafficking enterprises. So, they bring together the combined expertise and abilities of federal, state and local law enforcement.

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