US DIDN’T PURSUE MONEY LAUNDERING CASE VS DUBAI GOLD COMPANY
The International Consortium of Investigative Journalists (ICIJ) has questioned why the United States abandoned a major money laundering case against Kaloti, the Dubai-based gold trading and refining company after investigators asked the US Treasury Department to designate the firm as a money laundering threat.
ICIJ’s Kyra Gurney wrote that gold is a major vehicle for money laundering, with 25% of suspected transactions carried out by gold traders and refiners. Drug gangs and armed militant groups use gold to launder money and fund conflicts. In the process, they have supported illegal mining operations that destroy pristine rainforest and are hubs for sex trafficking and child labor. In Peru, Latin America’s biggest gold producer and the world’s second-largest cocaine supplier, the illegal gold trade is now twice as big as drug trafficking
Banks reported as suspicious thousands of transactions, worth $9.3 billion, involving Kaloti that occurred between 2007 and 2015. JPMorgan Chase, Deutsche Bank and other financial institutions flooded the Treasury Department’s Financial Crimes Enforcement Network with warnings about Kaloti, flagging as suspicious thousands of transactions. The banks described money flows that they said had the earmarks of money laundering. Several banks launched their own investigations and severed ties with the company — or said they planned to do so.
The Dubai-based conglomerate had become a key cog in the dirty gold trade, buying the precious metal from sellers suspected of laundering money for drug traffickers and other criminal groups, a US Drug Enforcement Administration-led task force determined. But the Treasury Department never took action against Kaloti. Former Treasury officials said a decision on whether to move ahead was deferred for fear of angering the United Arab Emirates, a key US ally in the Middle East. When attempts to convince the UAE to act on its own against Kaloti fizzled, the investigation was mothballed.
The Financial District would like to learn more from its audience. Can you please give us feedback on this article you just read. Click Here to participate in our online survey.