U.S. Mint Buys Drug Cartel Gold and Sells It as ‘American’

As prices for the precious metal soar, the industry’s guardrails have broken down.

The U.S. Mint has been buying gold from a Colombian drug cartel mine, with the mine's owner, Dairo Antonio Úsuga, being a notorious figure in the cocaine trade. The gold is then sold as "American" to investors, with the mint purchasing it from refineries that do not adequately verify the gold's origin. In 2020, the U.S. Mint bought 27,000 ounces of gold from a refinery that had sourced its gold from Úsuga's mine. The mine's workers are exposed to toxic chemicals, including mercury and cyanide, and the gold trade underwrites terrorism and cocaine trafficking.

This illicit gold trade directly affects investors who buy gold coins or bars from the U.S. Mint, as they may unknowingly be supporting terrorist and cocaine trafficking activities. The price of gold, currently at $5,000 an ounce, makes it a lucrative market for drug cartels to exploit. Investors who purchase gold from the U.S. Mint may be inadvertently funding these illicit activities. The U.S. Mint's failure to properly verify the origin of its gold raises concerns about the integrity of the gold market.

The gold trade has long been vulnerable to manipulation by criminal organizations, with the lack of effective regulation and oversight allowing illicit gold to enter the market. In the 1980s, the Medellín cartel, led by Pablo Escobar, also used gold to launder money and fund their operations. The current situation is a repeat of this pattern, with drug cartels exploiting the high price of gold to fund their activities. Insiders know that the gold refining industry is poorly regulated, making it easy for illicit gold to be laundered and sold as legitimate.

The U.S. Mint is expected to announce new sourcing guidelines for its gold purchases by the end of the quarter. A report by the Government Accountability Office, due to be released on March 15, will examine the U.S. Mint's gold sourcing practices and recommend improvements. The report may reveal that the U.S. Mint has been buying gold from other illicit sources, including mines in Africa and Asia. Interestingly, the U.S. Mint's gold coins are still stamped with the phrase "E Pluribus Unum," meaning "Out of many, one," despite the tainted origin of some of the gold used to make them.