Gold Mining Company Actually Trafficking Cocaine: Authorities
Peru's Sanchez-Paredes family has apparently drifted away from its core business.
The money was held in nine American banks, including Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and JPMorgan Chase (NYSE:JPM), none of which have been charged with any wrongdoing. Additional funds in three Peruvian bank accounts have also been frozen.
Peruvian law enforcement authorities say the Sanchez-Paredes DTO (Drug Trafficking Organization) is "unable to prove the legal origin" of at least $52 million in revenues supposedly generated by their portfolio of companies.
You may not have heard of the Sanchez-Paredes family, but they own two large gold mining concerns that have, apparently, drifted away from their core businesses.
From the US Attorney's Office for the Southern District of New York:
But what's really interesting is how investigators connected the dots:
For example, the Sanchez-Paredes DTO owns two mining companies, CIA Minera Aurifera Santa Rosa SA ("Comarsa"), and CIA Minera San Simon ("San Simon"), which purport to be in the business of mining gold, but are believed to be in the business of producing cocaine. In March 2007, Peruvian authorities seized approximately 125 tons of calcium oxide, a chemical used to both mine gold and produce cocaine, that were later identified as having been purchased by Comarsa and San Simon.
Naturally, those on the receiving end of the charges maintain the multiple decades-long investigations carried out by a plethora of international agencies is all be one gigantic mix-up.
Comarsa's mining records show that on numerous occasions, the amount of calcium oxide it used did not correspond with the amounts needed to process gold. This suggests that Comarsa is not actually involved in the business of mining gold, but rather in the business of producing cocaine. Other companies managed by the Sanchez-Paredes DTO appear to be nothing more than shell companies, created for the sole purpose of laundering drug money.
"It seems like there was a misunderstanding by the US attorney," a Comarsa executive told Reuters. "We are complaining about this."
A Family Legacy
According to officials, the Sanchez-Paredes family has been under investigation by the Peruvian National Prosecutor's Office since 1981, with a criminal complaint, now pending, finally filed in 2010. After "at least two members of the Sanchez-Paredes family, both of whom were in the business of supplying cocaine to drug cartels in Colombia and Mexico, were assassinated in the late 1980s and early 1990s as a result of their involvement in international narcotics trafficking," their "sons and siblings have carried on their narcotics trafficking activities," say officials.
It appears that these activities were -- and are -- quite the poorly-kept secret. And, as one Peru-based mining analyst and blogger who goes by the nom de plume "Otto Rock" told me in an email, it's "hardly new news."
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