Dealer in Precious Metals, Stones, or High-Value Goods

Dealers in jewelry, diamonds, or other luxury goods are used to:

• Accept falsified valuations for transactions, allowing large amounts of illicit cash to enter the financial system.
• Mask actual wealth or proceeds through intentionally undervalued appraisals, complicating financial institutions' efforts to identify suspicious activity.

Dealers in high-value commodities, such as diamonds or gemstones, may participate knowingly or unwittingly in smuggling. Criminals:

• Move precious items across borders without proper disclosure, then sell them to dealers who may fail to verify origins.
• Generate seemingly legitimate revenue from these sales, complicating financial institutions' efforts to detect and trace illicit funds.

These dealers can be exploited when illicit proceeds are converted into or disguised as high-value commodities.

• Transactions may involve false invoicing or manipulated pricing to obscure actual payment flows.
• Financial institutions risk overlooking disguised proceeds if valuations and documentation are not scrutinized.

Dealers, such as cash-for-gold services, accept counterfeit currency in exchange for valuable commodities:

• Criminals purchase gold or other assets with forged bills and then resell them for clean funds.
• Once high-value items are secured, financial institutions have reduced visibility into the original source of funds.

Dealers can be exploited to buy, sell, or trade smuggled diamonds by:

• Misrepresenting the stones’ quality, value, or origin.
• Inserting illicit diamonds into legitimate markets with minimal documentation.

Their involvement affects financial institutions handling funds from these diamond sales, often masking the illicit nature of transactions.

Dealers in precious stones participate in the flow of diamonds:

• Criminals may collude with unscrupulous dealers to misrepresent or inflate the value of stones.
• Legitimate dealers can be unknowingly exploited when illicitly sourced or overvalued diamonds pass through their supply chain.
• Financial institutions face heightened risk assessing such transactions due to subjective pricing and inconsistent valuation practices.

Dealers facilitate gold-based laundering, whether complicitly or unwittingly, by:

• Allowing repeated high-value transactions under minimal due diligence, especially in non-face-to-face sales.
• Providing channels for transforming illicit cash into physical or intangible gold with limited oversight.

Such dealers are knowingly or unknowingly exploited when:

• Criminals purchase precious metals, stones, or luxury collectibles with illicit cash, benefiting from opaque pricing and limited oversight.
• Multiple purchases and private sales allow layering and integration of tainted funds into the legitimate economy, complicating financial institution due diligence.

Dealers in precious metals, stones, or high-value goods can be knowingly or unknowingly exploited in hot transfers by:

• Accepting or moving commodities like gold to settle cross-border obligations outside formal banking channels.
• Obscuring the origin or ownership of the underlying funds through minimal documentation requirements.

Dealers in precious metals, such as gold, knowingly or unknowingly enable illicit mining proceeds to enter formal markets. They:

• Purchase or handle unlawfully sourced metals, providing criminals with a channel to legitimize illicit stock.
• Commingle illicitly mined output with legal supplies, obscuring its origin.

Financial institutions face difficulty determining genuine sources of funds when proceeds appear to stem from legitimate metal sales.

Such dealers may knowingly or unknowingly accept jewelry at suspiciously high or low declared values. By not consistently verifying market prices or ownership documentation, they facilitate layering and make it challenging for financial institutions to reconcile transaction amounts with true appraised values.

Dealers in metals or gemstones are knowingly or unwittingly exploited by:

• Receiving large cash payments or non-transparent transfers from criminal buyers intending to convert illicit funds into tangible assets.
• Conducting transactions with irregular or unverifiable valuations, which obscure the true price or provenance and complicate financial institutions’ attempts to monitor fund flows.