US investigators ditch inquiry into Kaloti’s gold trade money laundering

Investigators in the US have ditched their pursuit of money laundering charges against one of the world’s largest gold traders and refiners, Kaloti Jewellery Group.

Earlier this year a British High Court found that one of the world’s ‘Big 4’ accounting firms and Kaloti’s accountants, EY, was liable for covering up evidence of money laundering at the Dubai-based conglomerate (Trade-based Financial Crime, 24 July 2020).

Money laundering warning

A task force led by the US Drug Enforcement Administration (DEA) recommended in 2014 that the treasury department should designate Kaloti a money laundering threat under the US’ Patriot Act.

Such a designation would have effectively barred Kaloti from global financial services and prohibited it from trading through the normal channels.

Action deferred

But according to the International Consortium of Investigative Journalists (ICIJ) the treasury department deferred action against Kaloti for fear of angering the UAE, a key US ally in the Middle East.

Several global banks reported what amounted to US$9.3 billion in suspicious transactions linked to Kaloti between 2007 and 2015 to the treasury department’s Financial Crimes Enforcement Network (FinCEN).

A spokesman for the DEA said the Kaloti case is now closed and declined to answer questions about the investigation.

The ICIJ’s report, US Treasury Department abandoned major money laundering case against Dubai gold company, can be found here.

Categories: Trade Based Financial crimes News

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