Paul was a well-known customer of a European bank.

On a number of occasions he purchased gold bullion from the bank in ingots of 1 kilo with the explanation that he was buying the gold to export directly to a foreign company. Paul transported the gold out of the bank by himself after each transaction. In a single year he purchased a total of more than 800 kilos of gold with a value of more than US$7,000,000. The gold was paid for by funds draw from his company account.

The bank was also able to see that at regular intervals funds were transferred into the account from another company in a neighbouring country, as one would expect.

However, Paul’s actions in transporting the gold himself seemed unusual to the bank, and the bank officials decided to disclose their concerns to the national FIU. The FIU researched Paul and his company within various law enforcement intelligence databases, but no obvious link to criminality could be found.

However, the scale of the gold purchases justified a formal investigation by the FIU, and further enquiries were undertaken .

These enquiries revealed that Paul was not in fact selling the gold to a foreign company as claimed. Before buying the gold, Paul always met with a foreign citizen named Daniel.

Although they drove to the bank together in Paul’s car, Daniel never entered the bank. After Paul purchased the gold, they drove to Daniel’s car and hid the gold in the boot.

Then Daniel drove back to his own country, crossing the border without declaring the bullion at Customs and therefore avoiding paying import duties. Once in his own country, Daniel handed the gold over to Andrew, who delivered it to another company for sale on the open market.

A proportion of the profits from the sale of the gold was transferred back to Daniel’s company, from which he drew the next tranche of funds to purchase more gold.

The amount of additional profit generated by this simple tax evasion scheme was substantial.

At the time of writing, criminal proceedings for money laundering in conjunction with tax evasion were being raised against Paul, Daniel and Andrew.

The smuggling operation was estimated to have caused tax losses to the government of some US $ 1 , 500,000.

Because the proceeds from selling the smuggled gold were obtained illegally, the judicial authorities in the FIU’s country have also begun criminal proceedings against the individuals involved.

Indicators : Unwarranted high security risk - personal transfer of valuable asset