Brazil gang caught laundering illegal gold with crypto

Listen to this article.

An illegal gold mining operation that allegedly used crypto tokens to launder its profits with the help of healthcare companies has been scuppered by Brazil’s military police. 

211 officers conducted 60 raids and arrested five people in São Paulo on Thursday, in a police operation dubbed Greed.

“A movement of billions of amounts by the criminal group was revealed, with millionaire deposits and withdrawals in cash, shell companies, and bank transfers between those involved,” authorities told local news outlets (translated from Portuguese).

Apparent shell companies owned by healthcare firms owned several gold mining companies located in the northern Rondonia region, which police say used invalid environmental permits when mining for gold. They allegedly used cryptocurrency as a means to “justify the amounts arising from the illegal extraction of gold… as if they were investments of third parties interested in receiving dividends.”

Authorities became aware of the gold scheme after a prior investigation discovered drug trafficking onboard airplanes. The air trafficking incident was then linked to a complaint in Porto Velho that related to money laundering in the health sector.

Authorities say healthcare companies in Brazil have been laundering gold for crypto for over a decade. It’s estimated that 16 billion reais, or $3 billion, was moved across gang bank accounts between 2019 and 2021. 

110kg of gold was confiscated in 2019 by authorities linked to drug trafficking and illegal gold mining.

Read more: Binance wants you to think crypto money laundering isn’t an issue — it is

Federal police discovered that “Illicit funds injected into [health] companies in the capital of Rondonia came from illegal mining practices at least since 2012 by the leaders of the criminal organization.”

Investigators were then able to obtain financial data from one firm, called MMGold, to track its activities, where it was discovered that the company had “moved millions of dollars” across accounts, adding up to billions, before attempting to launder this money using cryptocurrency.

Regulation was introduced in May this year which updated anti-money laundering and anti-terrorism regulations specific to the health industry.

For more informed news, follow us on Twitter and Google News or listen to our investigative podcast Innovated: Blockchain City.