Drug Money Laundered as Gold, Says N.Y. Prosecutor

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Federal authorities in New York allege that drug dealers paid cash for gold in Manhattan’s storied diamond district, then had jewelers rework the precious metal so that it was disguised as belt buckles, wrenches, screws and other hardware.

The disguised gold, which was sometimes also painted, was sent to Colombia, where it was sold to refiners for cash, the authorities said. The money allowed drug dealers to send more cocaine and heroin to the streets of New York, the officials said, beginning the cycle again.

Yesterday, federal prosecutors announced the arrest of 11 jewelry dealers and others who were accused of participating in an international money-laundering scheme. The investigation tracked $1 million that was exchanged for gold, but prosecutors suggested that the value of the gold smuggled to Colombia over the years was vastly more than that.

Link: http://www.nytimes.com/2003/06/06/nyregion/06GOLD.html

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