The US has been identified as a refuge for illicit funds generated by environmental wrongdoers in the Amazon rainforest, according to a new report. The study reveals that illegal loggers and miners are investing vast amounts, from millions to billions, in US assets, including real estate. The report urges both Congress and the White House to address gaps in financial regulations, which it claims are exacerbating the degradation of the world’s largest tropical forest.
Ian Gary, the Executive Director of the Financial Accountability and Corporate Transparency (Fact) Coalition, which authored the report, emphasized the US’s vulnerability as a hotspot for concealing illicit funds. He highlighted the broader implications, not just in terms of national security and corruption, but also environmental crimes.
In 2021, the US topped the global financial secrecy index by the Tax Justice Networks, primarily due to money laundering activities and lapses in its financial transparency regulations.
The Fact study underscores the repercussions of such secrecy on environmental offenses in the Amazon, a region crucial for its climate impact. It presents six case studies illustrating the ties between deforestation and US-based firms. Florida, with its deep-rooted connections to South America, emerged as a significant hub. One notable instance involves Goldex, previously Colombia’s second-largest gold exporter. The company supplied over 45 tonnes of gold, valued at $1.4 billion, to US refineries, including Miami’s Republic Metals Corp (RMC). Colombian authorities later claimed the gold was illicitly mined and used for money laundering by organized crime factions. Following a US investigation, RMC revamped its anti-money laundering protocols, while Goldex declared bankruptcy.
Another case linked Miami to Amazon countries, involving NTR Metals, which admitted to inadequate anti-money laundering measures after being implicated in a $3.6 billion illegal gold scheme with Peru.
However, the issue isn’t confined to Florida. In Maryland, former Peruvian president Alejandro Toledo allegedly used properties to launder $1.2 million in bribes from Brazilian firm Odebrecht for Amazon infrastructure projects. While Odebrecht confessed to bribery, a US court mandated the return of funds to Peru. Toledo refutes these allegations.
Additional cases connected a Nevada company to illegal timber purchases from the Peruvian Amazon and a Connecticut firm to deforestation for a palm oil plantation on indigenous land.
Peruvian regulators and advocacy groups often find their probes into environmental crimes stymied by US shell companies. Daniel Linares Ruesta, the head of Peru’s financial intelligence unit, confirmed instances where illicit funds were directly linked to US firms.