Gold smuggling crisis

A week after the US Treasury Department had helped to expose a massive gold smuggling and tax evasion ring involving one of Guyana’s wealthiest families, authorities are now complaining about the massive drop in gold declarations to the state buying system.

And the government says, it will stiffen penalties for those beating the system by bypassing the Guyana Gold Board and selling production to buyers offering rates way above the official selling price and even beating out rates fixed by international market rates. This points to a well organized smuggling market, officials said.

Giving the latest figures, Vice President Bharrat Jagdeo said gold production had dropped by a whooping 200,000 troy ounces on average over the past five years, pointing to 2019 as the last year that figures appeared to reflect a more reasonable reality with declarations reaching 641,000 ounces.

Promising to root out the scourge, Jagdeo told reporters recently that “we believe that there are people that are not selling to the gold board to avoid taxes and we believe at that time that it was organized and that it was having an impact. And I would even advocate that we amend the law to institute even more severe penalties on people who have done this or are doing this. So, I just want to forewarn those who have been engaged in this practice that we know who you are or at least some of the key players and the law enforcement agencies of the government are coming after you.”

And just days before the treasury’s Department of Office of Foreign Assets Control (OFAC) announced sanctions against the wealthy Mohamed Family and former security ministry administrator Mae Thomas, authorities at the main international airport had arrested and charged three people with attempting to smuggle 240 ounces of raw gold to the US worth about $560,000.

Pointing to the arrest and subsequent charges against the three, economy, oil and gas minister Jagdeo said that this is just the tip of an iceberg of rampant smuggling of gold through various means. Thomas had been detained by federal officials in the US while transiting the country to China last year, her mobile phone seized and downloaded as part of a wide ranging probe into Mohamed’s Enterprise, a leading gold miner, buyer and foreign exchange cambio dealer. The central bank has since revoked the cambio license.

In accusing the Mohameds of wrongdoing, Treasury had said that they had “evaded Guyana’s tax on gold exports (to the US) and defrauded the Guyanese government of tax revenues by under-declaring their gold exports to Guyanese authorities. Between 2019 and 2023, Mohamed’s Enterprise omitted more than 10 thousand kilos of gold from import-and-export declarations, and avoided paying more than US$50 million in duty taxes to the Government of Guyana. Mohamed’s Enterprise has bribed customs officials to falsify import-and-export documents, as well as to ensure the undisrupted flow of inbound and outbound personnel that [sic] move currency and other items on behalf of Azruddin and Mohamed’s Enterprise,” Treasury said as it sanctioned the Momaheds and Mae Thomas.