Federal prosecutors said Wednesday they have reached a deal not to bring criminal charges against South Florida-based Republic Metals, one of the largest gold refineries in the world, in a long-running investigation into money-laundering and Bank Secrecy Act violations in the multibillion-dollar gold trade between Latin America and the United States.
Under the terms of the “non-prosecution agreement,” Republic agreed to continue cooperating in the federal investigation into the gold industry and to make improvements in its anti-money-laundering program. The company declared bankruptcy last year but is being acquired by a major Japanese refiner. It will not have to pay a fine, according to the agreement, which was included in a bankruptcy court filing.
The U.S. Attorney’s Office in South Florida has been investigating Miami’s gold trade for several years, focusing on how U.S. gold refineries were buying illegally mined gold from Latin America that enriched narcotics traffickers and devastated the rain forest. The metal is widely used by the United States’ biggest companies to manufacture jewelry, electronics and bullion, although most American consumers have no idea they may unwittingly be purchasing what experts call “blood gold.”
Details about Republic’s potential misconduct were summarized in a “statement of facts” that the U.S. Attorney’s Office refused to release when asked by the Miami Herald Wednesday. The statement of facts was referenced in the non-prosecution agreement, but the office’s spokeswoman, Sarah Schall, said it was not “a publicly available document.”
The agreement states that — at Republic’s request — neither the company nor prosecutors will disclose the document without a court order. Without that summary, it is impossible to determine why Republic was under investigation and what authorities discovered about its activities.
According to the agreement, “the nature of the conduct described in the statement of facts is serious and worthy of investigation.”
In a news release, U.S. Attorney Ariana Fajardo Orshan said the crackdown on illegal gold “should place others on notice that there are benefits to cooperating and there are grave consequences for those who engage in money laundering or fail in their legal requirement to prevent it.”
In declining to bring charges, prosecutors noted that Republic had no criminal history and had spent more than $1 million implementing a program called “Peace of Mined” that saw it stop doing business with gold traders known as “aggregators.” Those aggregators collect metal from small mines and sell it in bulk to U.S. and other gold buyers, making it difficult to trace whether the gold was mined legally. Prosecutors also said Republic had cooperated with authorities on other investigations over the years.
In the current investigation, Republic supplied more than 100,000 emails and WhatsApp messages to prosecutors. The company agreed to spend $250,000 over the next three years on anti-money-laundering compliance.
The deal with Republic spares the company from criminal repercussions. The agreement was signed March 8 and unsealed Tuesday after being approved by a federal bankruptcy court judge. It was negotiated by Assistant U.S. Attorney Walter Norkin. Republic’s lawyer, Roy Altman, declined to comment. The gold investigation is being conducted by Homeland Security Investigations, the Drug Enforcement Administration, the FBI and the Internal Revenue Service.
In a statement, a spokesman for the Rubin family, which has operated Republic since 1980, said it is “pleased’ with the agreement.
“We have always applauded efforts to hold wrongdoers accountable and, by the same token, believe it is important and fair that companies like Republic that intend to operate lawfully be recognized as such,” said spokesman Tom Becker.
Republic ran a massive gold refinery in Opa-locka and employed about 200 people. The company was founded by Richard Rubin, who died in 2013, and taken over by his son, Jason, and daughter, Lindsey. Creditors have filed a lawsuit against Lindsey Rubin alleging that the family embezzled money from the company, including for the purchase of a $3 million condo in Miami Beach. An attorney for Lindsey Rubin has denied the allegations.
The company is being bought out of bankruptcy for $25.5 million by the Japanese conglomerate Asahi, which also owns a precious metals refinery in Salt Lake City. Asahi Refining, the company’s North American subsidiary, did not immediately respond to a request for comment. The new operation will be called Asahi Refining Florida.
Last year, the feds won a criminal conviction against Dallas-based Elemetal, one of Republic’s biggest competitors, over a $3.6 billion money-laundering scheme executed by three of its Miami gold dealers, who cut plea deals and are now serving prison time.
Because of its proximity to gold-rich Latin America, Miami is the hub of the U.S. gold trade, a marketplace that authorities say has been exploited by drug traffickers and other organized criminal groups in countries such as Peru and Colombia. The criminals trade gold in order to launder cash earned from illegal activities and make their profits seem legitimately earned. Prosecutors say U.S. gold buyers have failed to determine where their precious metal came from and who was selling it, and have dealt with criminals.
In 2018, Elemetal pleaded guilty to failing to maintain a robust anti-money-laundering program and agreed to a $15 million fine. The Bank Secrecy Act requires precious metals dealers to know whether they are doing business with criminals. The case against Elemetal hinged on its dealers’ collaboration with gold aggregator and alleged money launderer Pedro Pérez Miranda, aka Peter Ferrari, in Peru, between 2012 and 2016, as well as other aggregators.
Republic also bought gold from Pérez Miranda for several months in 2012, the Herald reported last year. Pérez Miranda has been charged by federal prosecutors in a money-laundering conspiracy and is awaiting extradition to Miami. He was arrested in 2017 by Peruvian police and also faces charges in his home country.
Becker, the Rubin family spokesman, said Republic “briefly” did business with Miranda before determining he did not meet the company’s standards.
“Other companies continued to work with him for years until he was indicted,” Becker said. “Had other companies adopted Republic’s rigorous standards, Miranda would have had no business partners.”
Republic sold gold to 24 Fortune 500 giants, including General Motors, HP, IBM and Lockheed Martin, according to a Herald analysis of corporate disclosures, as well as the jeweler Tiffany & Co.
On a visit last year to Peru’s ravaged gold-mining region, where wildcats indiscriminately use dangerous mercury to extract the precious metal from rock, Pope Francis called the gold industry “a false god that demands human sacrifice.”
In 2018, the Herald published a series, “Dirty Gold, Clean Cash,” which exposed the links between South Florida’s gold industry, Latin American narco-traffickers and the destruction of the South American rain forest. On Monday, the series was named a finalist for the Pulitzer Prize in Explanatory Reporting.