Next time you look at your mobile phone or smartphone, think of this: it’s got gold in it. Since it is not corroded or rust-free, gold is used in those tiny connectors on the integrated circuit boards that make your mobile phone such a wonderful product. Real, it’s not a ton of gold — about 50 milligrams worth — thirty or thirty-five ropes worth. However, when you think of the millions and millions of cell phones you’re using, the figures add up. Assume there are more than 800 million mobile phones in India – which is an optimistic estimate – and we’re talking about Rs 1,000 crore plus! Expand the thinking further; projections by different government entities say that we generate a billion cell phones a year worldwide! That’s more than 3,500 crores of gold in cell phones alone. Gold is used in cell phones because it’s a perfect conductor of electricity. It is often used in connectors elsewhere; only two nanoparticles are known better conductors of electricity than gold: copper and silver. Gold connectors are often used for quick and reliable transmission of digital data.
A gold refiner used by criminals to launder drug money was permitted to sell gold to global supply chains used to produce smartphones and vehicles.
International investigation revealed that Dubai-based trader Kaloti had been purchasing gold from criminal networks. Six years ago, the US Treasury was encouraged by law enforcement to warn the world that it was a “key money laundering risk.”
But the alert has never been issued.
As a result, Kaloti managed to sell loads of gold to companies in the supply chains of Apple, General Motors, and Amazon that use precious metal in their components. This has placed businesses and millions of customers at risk of inadvertently financing illegal activity.
The US Treasury did not respond to requests for comments.
Kaloti ‘s members said that they “vehement denied” that they were deliberately involved in any crime or wrongdoing.
Under the scheme outlined in the documents, criminals anywhere in the world may use drug money or other illegally acquired cash to buy scrapped gold, such as second-hand jewelry, and carry it to Kaloti.
In return for gold, according to investigators, Kaloti would either bid bulk cash or submit a wire transfer to them. In 2014, the DEA suggested that the US Treasury publicly designate Kaloti as a “primary money laundering concern” under the US Patriot Act, which would make it too dangerous for global banks to do business with them to freeze the group out of the international economic market.
But the US lifeline Treasury has never taken action against Kaloti. Former officials said that they had postponed the decision on the recommendation, concerned about the reaction of the United Arab Emirates, the key diplomatically in which Kaloti was based.
According to information reported to the Securities and Exchange Commission, the US regulator, Kaloti is listed as part of the supply chain for General Motors and Amazon. Amazon said it was “responsible for ensuring that the goods and services we provide are manufactured in a manner that respects human rights and the environment. We are engaged with suppliers who are committed to these same values.
“We expect suppliers to help our efforts to determine the origin of the known minerals used in our goods.”