Operation Fort Knox: Swiss Gold Trading Trails Never Explored

In this case, dozens of people were accused of criminal association and money laundering in connection with the international smuggling of gold (illustrative image). Keystone / Sandro Campardo

In 2017, the Swiss PK* was convicted in Italy of leading an organization of smugglers. More than four tons of gold were sold illegally in Ticino. On the Swiss side, investigations were quickly closed. But, at Italy’s behest, Swiss customs finally confiscated a bank account and an apartment in the Engadine.

This content was published on October 19, 2022 – 10:08 am

Federico Franchini, Gotham City*

PK: Your name has long been in the headlines in the province of Arezzo in Tuscany, Italy’s main gold-producing region. Almost ten years ago, the local prosecutor’s office launched the Fort Knox investigation, which led to the biggest case of illicit precious metals trafficking ever uncovered in Italy.

Investigations began in November 2012 with more than 250 searches of jewelers, gold stores and processing companies in the Peninsula. Dozens of people have been accused of criminal association and money laundering in connection with the international smuggling of gold.

That dragnet had dismantled a powerful organization. In a short time, this network sold no less than 4,500 kilos of gold and 11,000 kilos of silver. The association, structured according to a pyramid system, operated in the Italian golden districts of Arezzo, Marcianise (Campania) and Valenza (Piedmont). However, the top of the organization was in Switzerland.

*Gotham City

Founded by investigative journalists Marie Maurisse and François Pilet, gotham city is a newsletter specializing in economic crimes.

Each week, it reports to its subscribers cases of fraud, corruption and money laundering related to the Swiss financial center, based on publicly available court documents.

Every month, Gotham City selects one of its articles, enriches it and offers free access to SWI swissinfo.ch readers.

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double bottoms

In Ticino, PK received the precious metals transported by a network of intermediaries, who transported the goods in carts equipped with a double bottom. All deliveries were made clandestinely, exchanging gold for cash in large amounts, transported by couriers who also used specially modified cars.

PK, a Swiss citizen of Albanian origin, born in Milan in 1948, has lived in Ticino for a long time. In the 1990s, he ran a precious metals trading company called Silgocom SA. The company disappeared from the commercial register in 2001, and its director has become increasingly low-key.

The Italian investigators, however, considered him, from the beginning of the Fort Knox investigation, to be the head of the organization, dictating prices and market conditions.

Condemnation in Italy, confiscation in Switzerland

In November 2017, the Court of Arezzo convicted 49 defendants, including PK. The Swiss was sentenced to two years in prison with a suspended sentence and a fine of 4,000 euros. The Italian authorities, above all, declared against him a confiscation of around 199 million euros corresponding to the estimated profits from trafficking. The man challenged this sentence before the Italian Supreme Court of Cassation, which upheld the decision of the Arezzo court in February 2019.

The Italian authorities then requested the confiscation of funds blocked in Switzerland. In fact, a first rogatory commission had been sent in this case in 2013. The Federal Office of Justice (FOJ) delegated it to the Federal Customs Administration at the time, now renamed the Federal Office of Customs and Border Security (OFDS).

Several accounts in the name of PK and his son – who was also investigated in Arezzo, but later acquitted by the court – were blocked. The Federal Criminal Court (TPF) ruled in 2015, giving the green light to send the bank documents requested by the Italian investigators.

With the Italian verdict against PK becoming final, the OFDS decided, in March 2022, to confiscate an account opened in Lugano worth approximately 1.6 million Swiss francs, as well as an apartment in the Engadine, in the commune of Champfèr.

Appeal rejected

Represented by lawyer Filippo Ferrari, PK appealed to the TPF asking for the annulment of the decision and the release of the assets. He alleged that the judgment of the Arezzo court of 9 November 2017, delivered in the context of a negotiated procedure, violated the principles guaranteed by the European Court of Human Rights (ECHR), because the authority did not specifically include the confiscation of his assets in the Switzerland.

In a decision handed down on August 9, 2022, the judges of Bellinzona recall that the Arezzo court ordered the confiscation of 199 million euros “to be executed, for the part corresponding to the amount in question, of the sums of money, credits and assets already seized”. The Italian sentence also concerned goods seized in Switzerland. Without opposition before the Federal Court (TF), the decision became final.

The account balance will therefore be transferred to Italy after a distribution procedure with Switzerland. The OFDS will also order the Land Registry of Graubünden to proceed with the sale of the apartment, the proceeds of which will, in turn, be distributed to Italy, after payment of the mortgage and subject to the sharing procedure.

the mystery remains

After ten years, the investigation into Fort Knox, which has caused so much ink to flow, especially in Italy, is coming to an end. A fundamental question, however, has not been answered: where did the gold that PK collected in Switzerland go?

The 2015 TPF judgment made it clear that the man had a company in Chiasso “which paid for the metal in cash, which he then officially resold to large foundries under the Good Delivery label”.

In Switzerland, however, no one has ever tried to investigate. Already in March 2013, even before the Italian rogatory letters, the public prosecutor of the canton of Ticino had issued a classification order in the file he opened on the case.

The Public Prosecutor’s Office of the Confederation (MPC) has also opened an investigation following the allegations made by some banks in Ticino. Three months later, in February 2014, federal prosecutor Dounia Rezzonico, in turn, dismissed the case. The reason: PK has already been prosecuted in Italy.

The large traffic on PK and its network, which amounted to a total value of 174 million euros, suggested, however, routes on the Swiss side.

According to the Italian investigation, part of the gold was given to an Italian company whose shares were held 10% by PK’s son and 90% by Begyr SA of Chiasso. The latter, now in liquidation, was headquartered in an important trust company in Mendrisio. Its managing director was a longtime member of the board of directors of one of the three main refineries in the region. This link has obviously not been exploited.

It should also be noted that Silgocom SA, a former PK company in Ticino, appeared in the investigation into the embezzlement of businessman Rocco Zullino, himself involved in the embezzlement of the Fondo edific di cult (FEC) – structure of the Italian Ministry of the Interior.

* name known by the editorial team

Document related to this article: Federal Criminal Court – Judgment of August 9, 2022external link

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