Three tons of gold is missing and the answer to the mystery appears to point to extensive money laundering in the global precious metals market.
The West African nation of Guinea, where a military government took power in a coup d’état last September, has demanded return of its gold from the custodian, Belgium’s Affinor BVBA, a company that also refines gold for Guinea. But Affinor responded that it could not do so.
Affinor had sold some of the gold to Istanbul Gold Refinery Metals Trading DMCC, according to a Bloomberg News chronology. The proceeds were then sent to the London accounts of a law firm that held the funds for a Cypriot investment company, which in turn attempted to distribute funds to 49 different entities around the globe. Law enforcement authorities in London followed the money trail and seized 34 million euros from the law firm and the Cypriot investment company, the largest proceeds from a criminal case in the United Kingdom.
In response, Guinean authorities have arrested the former head of the country’s central bank, Lounceny Nabe, and charged him with embezzlement.
Istanbul Gold Refinery is a member of the London Bullion Market Association (LBMA) which has clear rules to prevent laundering and other criminal activity. But, the requirements often are not enforced, according to the Bloomberg report.
Gold is a key part of Guinea’s relatively small central bank.