- An investigation in Brazil has identified Italian company Chimet, which refines precious metals for the jewelry industry, as a buyer of gold mined illegally from an Indigenous reserve in the Amazon.
- The allegations follow a police operation that cracked down on the web of illegal miners, middlemen and exporters who “launder” the gold to conceal its origin.
- Chimet has denied the allegations, saying it only buys from suppliers whose paperwork is in order; Italian police say that if the export documents were forged in Brazil, it’s a matter for the Brazilian police.
- Mining in Indigenous territories is prohibited under Brazil’s Constitution, but a lack of enforcement has allowed the practice to flourish.
A leading Italian group that refines gold for use in jewelry is getting some of its precious metal from illegal mines that are destroying an Indigenous reserve in the Brazilian Amazon, an investigation has found.
Police in Brazil identified Tuscany-based Chimet SpA, one of the top 50 companies in Italy by revenue, as the recipient at the end of a complex web of illegal miners, launderers and exporters.
The starting point for the gold is the Kayapó Indigenous Territory in the Amazonian state of Pará, where mining is banned under the Constitution but where it persists due to a lack of law enforcement.
From there, the gold flows to companies based in the states of São Paulo, Goiás and Rio de Janeiro, which then launder it — fraudulently certify it as being of legal origin — in preparation for export.
This scheme was uncovered in October last year during the police’s Operation Terra Desolata. As part of the enforcement action, authorities issued 12 arrest warrants and 62 search-and-seizure warrants, and froze 469 million reais ($93 million) from the accounts investigated. Today, more than three months after the operation, all those arrested have since been released.
Chimet was founded in the 1970s as an arm of Unoaerre, a leading jewelry maker that’s nearly a century old and claims to account for 70% of all wedding rings sold in Italy. Both companies are today controlled by the Squarcialupi family, based in the Tuscan city of Arezzo, famed for its millennium-old tradition of jewelry production. In 2020, Chimet recorded the highest earnings in its history: more than 3 billion euros ($3.4 billion) — a 76% increase over the previous year.
Chimet’s website describes the company as being “environmentally friendly” and touts its sustainability certificates obtained “as a result of its responsible operation.” Chimet told Repórter Brasil that it always buys gold with certifiable legal origin.
“The purchases in question were always accompanied by documents that confirm the legal provenance of the gold as demonstrated by suppliers’ invoices and export authorizations, in addition to customs documents, whether they are Brazilian or Italian,” the company said in a statement. However, it acknowledged “the risk of negative effects associated with the trade and export of minerals from high-risk areas.”
The “high-risk area” in this case is Brazil, where it’s easy to fake provenance documents for gold, and where regulators like the National Mining Association (ANM) and other agencies have long been weak on enforcement. The invoices declaring provenance are written on paper and filled in by the sellers, who can easily lie about where the metal was mined from.
“Unfortunately, illegal gold is a reality in the European market,” said Nunzio Rago, president of ANTICO, the Italian Association for the Protection of the Gold Sector. “Companies have two faces: they buy gold from illegal sources to reach certain international standards of production quantity.”
In the case of Chimet, according to the Brazilian police investigation, its supplier in Brazil is a company called CHM. Police allege the companies’ partnership goes back decades, but Chimet disputes this, saying it only worked with CHM for “four to five years.”
CHM was established by Italian citizens Mauro Dogi and his son Giacomo, who live in Brazil and are being investigated for illegal gold trading. Investigators describe them as “the main recipients of illegal gold from Indigenous lands in the area.” The elder Dogi once worked at Chimet’s factory in Arezzo. “The very name of CHM is short for Chimet,” according to the police investigation revealed by newspaper O Estado de S.Paulo and accessed by Repórter Brasil.
According to the Brazilian police, Chimet paid CHM the equivalent of 317 million euros ($359 million) for the gold. Chimet says the amount that was purchased (without mentioning how much it was) is negligible compared to the total volume, about 70 metric tons, that it processes annually at its factories.
CHM, in turn, bought the gold from Cooperouri, a cooperative of miners in and around the municipality of Ourilândia do Norte in Pará state. According to the police investigation, Cooperouri members mine their gold from inside the nearby Kayapó Indigenous Territory. Police allege that CHM made 25 deposits to the cooperative within one year (between 2019 and 2020), totaling 11.7 million reais ($2.3 million).
In addition to carrying out illegal mining, according to the police, Cooperouri also buys gold from other illegal miners and middlemen operating in the same region. It paid out 246 million reais (around $50 million) to these suppliers between September 2015 and September 2020.
Exporting gold on private flights
Once it secures supplies of illegal gold, CHM then exports it, police allege. These shipments go “in private flights, without authorities’ due knowledge, without going through the Integrated Foreign Trade System (Siscomex),” they allege.
The Brazilian Revenue Service told Repórter Brasil that “if the export operation is clandestine, there no Siscomex registration to talk about, since its characteristic is to evade government controls.” The agency said it works with the police “to combat gold smuggling and illegal trade.”
Through its lawyer, Roberto Alboni, Chimet confirmed that Mauro Dogi was a factory worker at the company’s headquarters in Italy between 1990 and 1995, implying that he wasn’t in any senior management position. The company also said its relationship with CHM lasted only “four to five years” before it was interrupted last October after the news of the police operation came out.
In a statement, CHM denied buying gold mined from Indigenous territory. It said it bought only “from cooperatives authorized to mine in their respective areas, which always presented the legally required documents to carry out their activities.” CHM confirmed that it exported gold and said “all gold purchased on the domestic market is screened by the Federal Revenue Service and the Federal Police during the export process.” The company’s lawyers say its activities have been temporarily suspended.
The boss of Badia al Pino
Chimet founder Sergio Squarcialupi, the former chairman of jewelry maker Unoaerre, has described by the Tuscan press as “il patron di Badia al Pino” — the boss of Badia al Pino, the district in Arezzo that hosts the company’s headquarters. His daughter, Maria Cristina Squarcialupi, is the current chair of the board.
The Squarcialupi family, and in particular patriarch Sergio, was investigated by Arezzo prosecutors in 2008 over allegations of fraudulent environmental licenses. Sergio Squarcialupi was convicted of several crimes, including environmental damage, conspiracy to commit illegal trafficking of tailings, and misrepresentation, but the rulings were overturned by the Supreme Court in 2017.
Those who have gone up against the group, including in court, say that the conglomerate is too strong and powerful. For those who defend the family, such as lawyer Roberto Alboni, what happened was judicial harassment marked by errors. “It was a painful process; Sergio Squarcialupi even lost his health because of it, but the company had the opportunity to demonstrate that nothing was wrong,” he said.
When contacted for comment, Unoaerre said it had never bought gold directly from Brazil. However, its 2020 sustainability report says it carries out most of its acquisitions, as well as gold refining, with its partner Chimet, described in the same document as a company that meets the criteria for verifying the “legitimate” and “conflict-free” provenance of that gold.
And because they’re sister companies, the gold illegally extracted from the Kayapó Indigenous Territory and refined by Chimet is likely to end up on the fingers of Italian brides and grooms.
The Guardia di Finanza, the arm of the Italian police that deals with financial and economic crimes, told Repórter Brasil that activities like that described by the Brazilian police — illegal gold being laundered in Brazil and exported to an Italian company — could result in some investigations by the Italian authorities. But there’s no indication that will happen for now, as the guardia’s press office pointed out.
One of the obstacles to investigating a case like this is the fact that the gold is laundered, or made “legal,” in Brazil before it’s exported. And since there are documents certifying it as legal, the problem becomes the responsibility of the Brazilian authorities.
Both Chimet and Unoaerre hold good practice certificates from organizations such as the U.K.-based Responsible Jewellery Council, which has developed industry guidelines to keep illegal gold and human rights violations out of the supply chain. Both companies are also subject to a 2017 European Union regulation that imposes mandatory control over the sources of precious metals originating from outside the EU and purchased by companies based in the bloc.