Dallas refiner pleads guilty in gold-based money laundering case

Gold refiner Elemetal LLC has pleaded guilty in a US court to charges related to its failure to maintain an adequate Bank Secrecy Act and anti money laundering (BSA/AML) programme.

Elemental admitted in a Florida court that between August 2012 and November 2016, it purchased and refined billions of US dollars of illicit gold from countries around the world.

Wilful neglect

The Dallas-based refiner admitted that it wilfully failed to develop, implement, and maintain an adequate BSA/AML compliance programme in its purchasing procedures, despite knowing the high risks associated with gold-based money laundering.

The international gold trade is widely used in trade-based financial crime for laundering illegally mined gold as well as narcotics and other criminal proceeds.

Admissions

Elemental admitted it had accepted gold from foreign entities without obtaining identification and information regarding those entities or the source of their gold, as required by the BSA know-your-customer provisions.

The refiner also admitted receiving gold from countries and customers that an adequate BSA/AML screening programme would have alerted as likely involving suspicious or illegal activity.

Inadequate due diligence

The court found that the company failed to conduct adequate customer due diligence regarding the source and origin of gold they received from specific customers and suppliers.

Under its plea, Elemental has agreed to a US$15 million fine and has pledged to develop and maintain an effective compliance and ethics programme, and cooperate with the government on related investigations.

The company is also subject to a 5-year probation term during which it is banned from purchasing precious metals from outside the US.



Categories: Trade Based Financial crimes News

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