Global Fraud Footprint

All that glitters

Precious metals, stones enable money laundering, smuggling, tax evasion

If resources are valuable, fraudsters will use them to commit crimes. And they love to misuse gold, diamonds and other glittery materials from the depths of the earth. Here’s how countries are battling the schemes and what it all means for fraud examiners.

At practically every stage of the precious metals and stone trades — from extraction to refining to sale or re-sale of finished products — vulnerabilities can motivate entities in supply chains to commit fraud by evading sanctions or taxes, laundering money or smuggling.

In 2019, a complex, continent-spanning fraud scheme included the smuggling of more than seven tons of gold from Venezuela’s reserves on a Russian charter aircraft to a gold refinery in Uganda and then on its way to … somewhere. No destination was ever confirmed, although several tons of gold went on sale at a steep discount later in Turkey.

Ugandan authorities seized the second of the two shipments but ultimately released the gold after Ugandan President Yoweri Museveni intervened.

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