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Peru uncovers organized crime network laundering illegally mined gold

Cover image: Gold seized during the operation in Peru. Photo: PNP Medio Ambiente.

  • A massive operation involving more than a thousand law enforcement officers in five regions has led to the arrests of 18 people accused of belonging to a criminal network called Los Topos, or The Moles, laundering illegally mined gold.
  • Four of those under investigation are listed in the mining formalization registry,with their documents used to legitimize the transport of large quantities of gold.
  • The Peruvian Ministry of Energy and Mines says those who abuse their mining formalization status will be removed from the registry.
  • But law enforcers investigating the network say the government’s repeated extension of the deadline for miners to register allows opportunity for more such abuses of the system.

A major operation across five regions of Peru has seen 47 prosecutors and 1,200 police officers arrest 18 people who, according to Peruvian authorities, were members of a criminal organization known as Los Topos (Spanish for “The Moles”), who focused on the illegal mining and trading of gold.

Simultaneous raids were carried out in nine tunnels located in Parcoy district, Pataz, in the northern region of La Libertad, leading to the regions of Piura, Lima, Ica and Arequipa. The operation successfully revealed the process used by criminal organizations to launder gold mined from prohibited sites.

The entrance to the tunnels was hidden by buildings located on the side of the hill. Photo: PNP Medio Ambiente.

The authorities also unmasked the front used by this criminal group to shield its operations via the Ministry of Energy and Mines’ Integral Registry of Mining Formalization (REINFO). Members of Los Topos used the registration details of four people who were in the process of being formalized as artisanal miners in order to transport the goods and authenticate the gold.

The group used this front to launder high-purity gold illegally mined from huge tunnels dug into the hills of the Retama and Fernandini areas in Parcoy, which were hidden inside buildings built on the mountain slopes.

Who are ‘The Moles’?

Among the arrested are those responsible for the strip mining and stockpiling of the ore, owners of properties that concealed entrances to the mines, front men, transporters of the ore, those that filed documents relating to the laundering, those in charge of storing the dirty gold, and those who bought the product for export.

Two foreign nationals, both Chinese but one a naturalized Australian, are listed as part of this network. They, through their companies, were in charge of buying and exporting the mineral authenticated by the Port of Callao.

The gold was seized from warehouses in the Port of Callao. Photo: PNP Medio Ambiente.

The operation led to the seizure of large amounts of gold valued at approximately $10 million, as well as documents, weapons, explosives and chemical agents.

“This is the first time that illegal mining has been exposed in such a way, with identity documents and so much gold being seized,” said Raúl Del Castillo, the Peruvian police general in charge of environmental law enforcement. “We believe this constitutes the beginning of a new era in the fight against illegal mining. Behind this illicit activity there are criminal organizations and, to date, the problem has not been addressed in this way.”

The operation has exposed a whole chain of illegal activity that originated in Parcoy, infiltrated the Port of Callao, and finally ended up in Asian and European markets.

The REINFO papers

For the six months between February and July 2019, the Public Prosecutor’s Office and the police kept an eye on the properties located on the main Parcoy road, following the trucks that had been loaded under the cover of darkness with tons of ore.

120 kilos of gold bars were seized from export companies. Photo: PNP Medio Ambiente.

This surveillance led them to storage centers in Trujillo, then to mineral processing plants in Piura, Lima, Nazca (Ica) and Arequipa, and finally to Callao, where gold was stored in ingots or as ground stone. This, along with the help of documents belonging to artisanal miners registered with REINFO, was the process taken to launder the illegal gold.

“They emerge from the tunnels without documents, but there are offices where the papers are made and sold. REINFO is abused and misused,” said Sal y Rosas, a prosecutor responsible for the investigations.

In the prosecutor’s report, which Mongabay Latam obtained, there are four people registered with REINFO whose documents were used on multiple occasions to transport and authenticate the gold.

What these official papers allowed, in addition to the passage of gold out of the mines, is certification that the gold was extracted from authorized and registered outlets by a person registered with REINFO. However, when the authorities reviewed the recorded locations of the outlets, they found that no mining activity existed at any of them.

The miners were locked in the shafts throughout the night. Photo: PNP Medio Ambiente.

In one case, a truck left Trujillo for Arequipa in February 2019 carrying 35 tons of gold ore. The network involved in the activity used documents belonging to one Sumner Deybin Inga Campos, an individual registered with REINFO who is under investigation in Usquín district, according to Ministry of Energy and Mines official records.

Another 17-ton load transported in March 2019 bore documents from the Matwork mining company, which belongs to Jenss Marty Lara Tantaquilla, who is listed with REINFO as having two outlets in Chillia district. A similar situation occurred with documents belonging to Jeik Deidi Fernández Paredes, registered with REINFO as having an outlet in Ongón, according to prosecutor’s files, and with documents belonging to Ynocente Matos Anticona, whose registration with REINFO identifies him as being under investigation in the district of Chillia and a general manager of Consorcio Minero Chilia.

In all four cases, formalization registry details stated mining activity in very different locations to the properties in the Retama area of Parcoy from where the gold was shipped.

Explosive material and other inputs used in illegal mining were found during the operation. Photo: PNP Medio Ambiente.

“Their outlets were listed with REINFO as being in a certain location but, when we went there, we discovered that no mining activity was taking place. I went to all the locations listed and no mining or mineral activity could be found. So the gold had to come from elsewhere,” Sal y Rosas said.

This use of documentation with false information was made to disguise the mining of gold from prohibited locations, such as urban areas — in this case, the hill where houses covered the entrances to the tunnels. “This gold was extracted from a prohibited location, an urban area,” Sal y Rosas said.

“Within organized crime, criminals use everything possible to make it seem legitimate: public officials, front men, false identities, real papers but with falsified content,” Del Castillo said.

Mongabay Latam attempted to contact each person registered with REINFO who is connected to the prosecutor’s investigation, but was unable to reach them on the phone numbers listed in their Geological Mining and Metallurgical Institute (INGEMMET) records. Mongabay Latam was also unable to track down Jeik Deidi Fernández Paredes.

The houses next to the hill served as a facade to cover the entrances to the tunnels from where the illegal gold was extracted. Photo: PNP Medio Ambiente.

“REINFO is a mechanism to accelerate the formalization process,” said Mariano Castro, former vice minister of environmental management at the Ministry of Environment. “The problem is that once registered, you can move the gold anywhere. It’s unfortunate that each time the deadline is extended, more illegal miners can register, and this first stage of the process is never closed.”

In October 2019, Peru passed a law that extended the deadline for the registration of informal miners with REINFO until Dec. 31, 2021. Before that extension, the deadline was August 2020.

Mining formalization was encouraged during the previous administration of President Ollanta Humala in order to eradicate illegal mining, but the registration deadline has been extended multiple times since.

“If you constantly reopen registration with REINFO and allow illegals to reregister, there will be no incentive for formalization,” Castro said.

The Prosecutor’s Office is requesting 9 months of pre-trial detention for the 18 detainees. Photo: PNP Medio Ambiente.

Julio Guzmán, a public prosecutor specializing in environmental crimes, agreed that keeping REINFO registrations open generates problems. “The process must be closed and those who are subject to formalization must be supervised so that we know how the miners work, whether a certain area is degrading, and how it recovers.”

Mongabay Latam asked the Ministry of Energy and Mines about the formalization process and the use of these permits to mine gold illegally, but did not receive a response by the time this article was published.

Asian and European connections

“We seized 120 kilos [265 pounds] of gold bars from the warehouses at Callao, 80 of them with a purity of 99.9%,” Sal y Rosas said. “We also confiscated 35 containers with at least 2,000 tons of ground stone containing a high percentage of gold. Everything is now ready to be removed.”

The Peruvian authorities raided 35 warehouses containing 2,000 tons of ore. Photo: PNP Medio Ambiente.

According to the authorities’ calculations, the 120 kilos of gold seized in the Callao warehouses is worth $6 million, assuming a per kilo price of around $50,000. The additional gold contained in the 2,000 tons of stone is yet to be calculated. The police’s Del Castillo said the sum of the confiscated items could be around $10 million.

The gold from the Parcoy tunnels was in warehouses in the Port of Callao, ready to be exported to countries such as Dubai, China and Switzerland through formal mining companies. The documents used in the transport and transformation stages served to authenticate the ore.

Two of those involved in the export stage, Chinese citizen Liu Yu Hang and Australian national Yan Ruzhong, have been arrested. Both are named as officials of mineral exporting companies registered in Peru.

Two Asian-Peruvian citizens were arrested as part of the criminal network. Photo: PNP Medio Ambiente.

One of them is Jingzhong Globe Mining Company SAC, where Liu was listed as the general manager. The company’s export activities have been registered since 2018, according to the National Superintendency of Tax Administration (SUNAT).

Yan is the listed owner of Meta Segura SAC, whose export activities have been registered since 2016. In both cases, the companies intended to export the gold to China.

“In criminal networks there are structures, stages and levels. For example, Chinese exporters have legal companies, but they knew the illegal origin of the gold. They launder it through their export companies — it’s what happens in all criminal networks,” Del Castillo said.

The prosecutor’s files also name processing and export companies that received the gold from Parcoy.

The Veta Dorada mining company is one of them. In a statement sent to Mongabay Latam, the company said it “buys gold ore from small formal and artisanal miners duly registered with the Ministry of Energy and Mines,” adding that it “will actively participate in the Public Prosecutor’s Office investigations.”

The operation began in the Retama area of Parcoy, La Libertad. Photo: PNP Medio Ambiente.

Other companies named in the report are La Azulita SAC, Minera Titan del Perú SRL and Minera Las Lomas Doradas SAC. Mongabay Latam sought comment from each of these companies, but they declined to comment.

“The cargo received by all these companies came from Parcoy. We tracked the vehicles from the mine openings to the supply center in Parcoy, and from there to Trujillo and on to Nazca (Ica), Piura, Arequipa and Lima. That’s where the processing plants were and that’s where the exporters come from,” Sal y Rosas said.

On Feb. 26 prosecutors went to court to request the detention of the 18 accused individuals. The Police and the Prosecutor’s Office continue their investigations into the criminal network that they suspect has been illegally mining gold in the north of Peru for years.

“According to the FIU [Financial Intelligence Unit], the most profitable crime in Peru is no longer drug trafficking, but illegal gold mining. Behind illegal mining there are definitely criminal networks,” Del Castillo said.


After this article was published, Mongabay Latam received a response from the Ministry of Energy and Mines (MINEM). It said the Regional Directorates of Energy and Mines are responsible for the process of comprehensive mining formalization, as well as for supervising and overseeing mining and small-scale mining.

As for the inappropriate use of REINFO documents, MINEM said any failure to comply with the commitments and obligations defined in the regulations will be grounds to revoke or exclude the person from the registry, resulting in removal from the formalization process.

Among the grounds for exclusion are “the transfer of, or any act involving the misuse of, REINFO registration.” If, despite this revocation or exclusion, the miner continues to carry out illegal activities, they will be considered an illegal miner and their actions considered criminal acts under the Criminal Code.

A Spanish version of this article was published by Mongabay Latam on February 24, 2020.

Banner image: Gold seized during the operation in Peru. Photo: PNP Medio Ambiente.

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