-didn’t share info with then PPP/C gov’t
Former Natural Resources Minister, Raphael Trotman yesterday emphasized that when the APNU+AFC government entered office in 2015, US agents provided a briefing on the extent of gold smuggling that had been occurring under the previous PPP/C administration.
As the fallout continues from the US’s sanctioning on Tuesday of Nazar Mohamed and Azruddin Mohamed over an alleged gold smuggling network, Trotman underscored that when APNU+AFC took office in May of 2015 smuggling had already been a major problem and Washington apparently did not trust officials of the preceding administration.
Trotman has spoken about this subject in the past and critics have said the 2015 to 2020 APNU+AFC administration also failed to rein in the gold smuggling.
In a letter that appears in today’s Sunday Stabroek, Trotman said that in 2015, there was a briefing given, of a very sensitive nature, to himself and Minister of Public Security, Khemraj Ramjattan, about an ongoing investigation in the US in which Guyanese were supposedly involved. This investigation, he said, had started a few years prior, which was before the coalition’s term of office commenced, and it was ongoing. He said that he continued to receive briefings on various matters during his tenure as Minister.
“The primary concern shared by the US agents in 2015, was the belief that gold, mined in Guyana, Venezuela and Colombia, was being illegally shipped from, and through Guyana, to the US. Most concerning, was the belief that the proceeds of the sale of this gold were financing activities that were very inimical to the security and interests of the United States. This was not an investigation into corruption only”, Trotman stated.
He related that the agents who shared the information informed him and Ramjattan that they were only then authorized to share such information because in the past there were serious concerns about confidences being kept and sensitive investigations being compromised by Government of Guyana officials.
Trotman said that they were also informed that local law enforcement agencies were being, or were to be, briefed as well.
He added that the sharing of that intelligence with him and Ramjattan was just that, a briefing, and they were not asked to provide any information, or to take any action on the Guyana side.
He said that he asked whether he could speak publicly about the numbers that were disclosed and was told that he could.
Sometime afterwards, Trotman said that the Ministry of the Presidency ordered and initiated its own intelligence-led operation, with a unique sobriquet, to curb gold smuggling and transnational crime.
“I am reliably informed that this operation was shut down within 5 days of the new administration taking office in August, 2020”, Trotman said. This was denied yesterday by a release from the Ministry of Natural Resources.
In his letter, Trotman added that the “successful efforts of the Gold Board, and others, to raise the gold declarations during the period 2015-2020, speak for themselves”.
Acknowledging that smuggling, and particularly, gold smuggling, was not a new phenomenon, Trotman said that the recent concerns of the US government appear to be focused on the period 2019-2024. Further, he said that it would appear that the current sanctions arose out of a separate investigation that ran for 2+ years; just prior to the announcements of sanctions being made (2022-2024).
“One only hopes that the US government will now feel comfortable and secure in sharing ‘Top Secret’ information about ongoing operations and investigations of this nature, with our government, as they did before”, Trotman added.
In its response, the Ministry of Natural Resources yesterday said that the public had been visited with another fit of Trotman’s fantasy on the matter of gold smuggling by accusing the government of dismantling a unit that never existed.
The ministry said it is worth recalling that in 2016 in a published news report, Trotman admitted that 50% to 60% of local gold production was lost to smuggling, as he estimated that approximately 15,000 ounces of gold were being smuggled overseas weekly.
It said that if Trotman and Ramjattan were made aware of the severity of the issue, then they should be held accountable.
“Mr. Trotman now wants to change the narrative with respect to the source of gold allegedly smuggled by referring to an operation involving Guyana, Venezuela and Colombia, although he mentioned the source as local gold production in the very news article in 2016”, the ministry said.
It challenged Trotman to say who was involved in an intelligence-led operation under the APNU+AFC government to interdict gold-smuggling.
“Which law enforcement agency led this investigation? Why was no one charged in five years while they were in Government? Why has no report or any information whatsoever in respect of this investigation ever been made public? Why only now, nearly a decade after, the public is hearing of this information and investigation?
“For the public record, no such operations/investigation were discovered at the Office of the President in August 2020 and logically there was no `shut down’ of any such operation within five days of the Government taking office three and a half years ago, or at all. In the circumstances we are forced to conclude that Raphael Trotman is enduring another flight of his usual fantasies”, the ministry said.
Curacao
Evidence that the smuggling of gold was rampant prior to 2015 had been seen in the dramatic theft in 2012 of a large amount of gold from a boat crewed by Guyanese and docked at the island of Curacao. It was believed that the gold originated from Guyana and had been en route to Miami.
In total, 476 pounds of gold was stolen from Guyanese fishing boat “Summer Bliss,” which was docked on the Dutch Caribbean Island. Based on the information this newspaper received then, the vessel was on its way to Miami but made a stop in Curaçao. The gold was valued at approximately US$11.5 million.
News agency Amigoe had reported that six men, armed with guns and wearing masks and hoodies along with police jackets, stormed the boat. At gunpoint, they pushed the 51-year-old captain as well as the three Guyanese crewmen onto the ground. The robbers knew their way around the vessel as they walked directly to the three metal boxes with the gold bars and spent only five minutes removing them.
It was suspected that the gold was smuggled in batches from Guyana to Suriname over a period of time, after which it was melted into gold bars, loaded into the Summer Bliss and transported to the neighbouring country.
There was no concerted efforts by the then Ramotar administration to get to the bottom of the theft and the origin of the gold.
Over the last two decades, governments here have been warned about the large-scale gold smuggling out of the country but there have only been a few successes.
Two weeks ago, officers of the GRA seized a large quantity of gold jewellery from three passengers, two of whom are US citizens, who were attempting to leave on an outbound American Airlines flight bound for New York, USA.
The operation, which was fully supported by officers of the Ministry of Natural Resources (MNR), and the Customs Anti-Narcotic Unit (CANU), led to the discovery of approximately 240 ounces of virtually pure gold disguised as silver-plated jewellery, intended to be shipped out of the country without the necessary permits and declaration to Customs officials, with a value of over US$560,000. They have since been charged.
There have been overt displays of the illicit hoarding of gold by dealers. There have also been questions about Venezuelan gold being commingled with Guyana’s gold.
In January this year, Attorney General Anil Nandlall SC noted that gold smuggling was one of the highest money laundering threats in Guyana, which was flagged by the second Money Laundering and Terrorist Financing National Risk Assessment in 2022.
The National Risk Assessment (NRA) noted that in 2016 it was reported that 15,000 ounces of gold was smuggled out of Guyana weekly, while in 2017, a major gold smuggling racket was unearthed through the US Federal Bureau of Investigation (FBI) which provided Guyana’s authorities with a list of persons who had taken gold to the JFK Airport, New York, and declaring it there.
“The smuggling was made possible because Customs and other Gold Board documents were recycled along with seals. Hundreds of millions of dollars of profits were being made but little for Guyana. Considering these factors, smuggling including gold smuggling represents a High Threat of money laundering in Guyana,” the report said.
The NRA report emphasized that the findings are based on statistical evidence of investigated and prosecuted cases, and on the value of proceeds confiscated, as well as estimated to have been generated from the crimes, while estimates are based mainly on media reports, and suspicious transaction reports filed with the Financial Intelligence Unit (FIU).
In July last year, Brazil said it was conducting an investigation involving a Guyanese businessman, who was said to be part of a smuggling ring where some R$80 million (US$16.4 million) of illegally mined gold was laundered through shell companies in the food and medical supply industries.
In September of 2022, several men were charged jointly with stealing 1,000 ounces of raw gold from Bibi Acklema Goberdhan.
According to the police, Satrohan Seegobin and his father, contractor Bhaloonauth Seegobin found the gold while conducting repairs on the home of Goberdhan, who they only identified as a businesswoman who had been a gold dealer for a number of years. No charge was brought against her for hoarding gold even though she was in clear contravention of the law.
The Gold Board Act makes it illegal for persons who are not producers to have raw gold in their possession and stipulates that it must be sold to the Board or to any agent authorized in writing by the Board.
Tuesday’s sanctions by The United States Department of The Treasury’s Office of Foreign Assets Control after a more than 30-month investigation and pinpointing smuggling under this government has rattled the establishment. The Mohameds have remained silent. The government has since revoked the licence of the cambio run by the Mohameds and has asked Washington for more information.
Allegations against the Mohameds include defrauding the government here of some US$50 million in taxes from smuggled gold, as well as bribing public officials.
The Office of Foreign Assets Control (OFAC) – a financial intelligence and enforcement agency of the US Treasury Department – designated Azruddin Mohamed and Mohamed’s Enterprise “for being persons who have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery, that is conducted by a foreign person.”
OFAC also designated Nazar Mohamed as being “a foreign person who is or has been a leader or official of Mohamed’s Enterprise, an entity whose property and interests in property are blocked pursuant to E.O. 13818, as a result of activities related to Nazar’s tenure.”
Delving into the background for the sanctions related to gold smuggling, the Treasury Department said that while gold is one of Guyana’s main exports, it remains a highly fractured industry with small-scale gold mining operations in Guyana occupying a majority share of the country’s gold production.
It pointed out that the small-scale miners have informal relationships with larger purchasers and traders like the Mohameds and their company Mohamed’s Enterprise, while noting that this country’s gold is sold and traded globally.
2019 to 2023
The senior Mohamed is the founder of Mohamed’s Enterprise in Guyana before expanding to the United States as a moneychanger and transitioned into gold trading, the statement said. It noted that the junior Mohamed ultimately took over Mohamed’s Enterprise, which also now does business as “Confidential Cambio.”
The Department of Treasury pointed to the period 2019-2023, as it made the claim that an astounding US$50 million in tax evasion schemes by the Mohameds from their non-declaration of some 10,000 kilogrammes of gold.
“Azruddin and Mohamed’s Enterprise evaded Guyana’s tax on gold exports and defrauded the Guyanese government of tax revenues by underdeclaring their gold exports to Guyanese authorities. Between 2019 and 2023, Mohamed’s Enterprise omitted more than 10 thousand kilograms of gold from import and export declarations and avoided paying more than [US]$50 million in duty taxes to the Government of Guyana,” the statement contends.
Bribery was also highlighted as a key mechanism in the non-declaration schemes.
“Mohamed’s Enterprise has bribed customs officials to falsify import and export documents, as well as to facilitate illicit gold shipments. Mohamed’s Enterprise had paid bribes to Guyanese government officials to ensure the undisrupted flow of inbound and outbound personnel that move currency and other items on behalf of Azruddin and Mohamed’s Enterprise,” the statement noted.
In a separate statement, the US Department of State repeated the findings of the US Treasury Department.
Reuters had last year July, reported that the Mohameds were the subject of a US investigation on suspicion of money laundering, drug trafficking, and gold smuggling, and that US government officials had repeatedly warned ExxonMobil to avoid doing business with the men and their businesses here.
According to the report, US officials were considering imposing sanctions on the Mohameds and that it could require ExxonMobil to sever its business relationship with any sanctioned individuals or companies.
The Mohameds denied the explosive claim with the elder Mohamed telling Stabroek News that the report was false and just a “regurgitating of another article that had been written that had no merit.”
He had later issued a statement further explaining his position while stating that they maintain their “challenge to Reuters to produce any information to support that these allegations were of any substance.
