CI Goldex SA, a Colombian company that traded and processed gold mined in the country, and shipped it to US purchasers, has been alleged to be the center of a reputed $970m money laundering operation, said to be the largest in the country. The company's CEO, John Húber Hernández, has fled and is believed to be in hiding.
The company violated one of money laundering's cardinal rules: make sure that your records will pass at least a cursory inspection by law enforcement. According to Colombian authorities, the suppliers of gold ore listed in the firm's records were:
(2) Companies that did not exist as legal entities.
(3) Homeless individuals.
(4) Individuals with no prior connection with gold mining at any level.
It probably did not take long for investigators to call all the purported "suppliers,' and to learn that most were fictitious, or bogus. Considering that some of the gold mined in Colombia is sold to support the FARC, a specially designated global terrorist organization, the identity of the source of the gold is extremely important to the Government of Colombia.
|John Húber Hernández|
The takeaway here: if you suspect a client of laundering money, gain access to the names of his vendors, customers and clients; if any of those groups turn out to be bogus, there's a good chance that there is a financial crime in operation in that business, meaning that you must turn the information over to your counsel for further inquiry, review, and possible notification of law enforcement, as well as the timely filing of a SAR.