Over the past few year, four leaders of Colombia’s brutal El Dorado cartel were arrested by U.S. authorities and subsequently convicted of shipping nearly 1,000 tons of cocaine into the country. Three got unusually light sentences and, for reasons that remain murky, one cartel leader has been quietly released and another will be freed next year.
At least two of these strange deals were cut with the involvement of former U.S. attorney and current Attorney General Loretta Lynch, probably in exchange for intelligence information (a tip on Joaquin “El Chapo” Guzman, one source suspects). But there’s no way to know for sure because the government did not publish the transcript of the sentencing hearings or release a full account of what it traded for with the exception of one case.
Hopefully it was something valuable because these drug traffickers are pretty nasty types and they apparently were allowed to retain a major stake in an emerald mine in Colombia. The mine was part of a network they previously used to launder at least $10 billion in drug proceeds.
In 2015, a majority share in the same mine was provisionally acquired by Gemfields, a publicly-traded British firm which boasts about its ethical practices and uses actress Mila Kunis as its celebrity brand ambassador and spokeswoman. An agreement was announced by the company but is still pending and under corporate review.
Gemfields has additional plans in the Colombian gem industry, which is rather notoriously corrupt. Numerous media accounts and government investigations have established ties between the industry and drug lords and other criminal organization.
OK, here’s a recap of the story, which is hugely unreported.
Justice Department court filings flatly state that Don Julio Lozano Pirateque and three other Colombians headed El Dorado. A CIA officer reportedly accompanied the DEA to retrieve one of the drug lords — Daniel Barrera, nicknamed “El Loco,” who allegedly confessed under interrogation to ordering the assassination of a competing emerald boss — from Venezuela in 2012.
In its heydey, the El Dorado Cartel carved out alliances with major regional drug traffickers, including El Chapo. Don Julio and allegedly used a gem company called Esmeracol to launder tens of billions of dollars in cocaine sales.
Esmeracol’s principal holding was the Coscuez mine, which, according to Colombian officials cited by the newspaper El Espectador, Don Julio controlled through cut-outs. These allegedly included his daughter — who by her 19th birthday declared $90 million in income with Colombian authorities — and siblings.
Don Julio secretly negotiated his surrender with U.S. officials in 2010 and cooperated with law enforcement for the next three years while his criminal case was placed on hold. The proceedings were held in the Brooklyn courthouse of federal Judge Leo Glasser, who has heard a number of sensitive international cases involving drug trafficking and national security.
Don Julio’s defense team included Alexei Schacht, who advertises “cooperating witness representation” on his website. It says he has handled “many major cases involving extradited foreign nationals,” including at least one major Colombian cocaine trafficker. (Incidentally, Schacht’s law license was suspended from 2010 to 2012 for serious ethics violations.)
In an unpublicized May 2015 court hearing, Glasser dismissed all but two of sixteen counts against Don Julio. Lozano Pirateque, who pled to money laundering conspiracy and international drug trafficking conspiracy. Glasser gave Don Julio a seven-year sentence — quite a bit less than doled out in comparable cases. To take but one example, Osiel Cárdenas, the leader of Mexico’s Gulf Cartel who also cooperated with U.S. authorities, received a 25-year sentence in 2010.
With time served, Don Julio has almost completed his sentence and appears to be set to be released next year. His three partners also cooperated with U.S. authorities in exchange for information about competing Latin cartels. Two received remarkably light sentences; one was already released in June 2015 and a second is scheduled to leave prison in 2019. Only El Loco, who recently received a 35-year sentence, didn’t get off easy.
Court records mention some asset forfeitures targeting Don Julio and his partners, but it appears they may have been limited to cash and property in the U.S. That would presumably mean that they would remain in control of a significant chunk of Esmeracol.
Enter the British company Gemfields, which last September announced a series of provisional acquisitions in Colombia, including a 70 percent stake in the Cosquez mine. In the past, the firm has reportedly had problems with labor clashes and its use of overzealous private security contractors at its African gem fields.
Anna Gorham, the head of PR and communications for Gemfields, told me that its decision to invest in Colombia followed a thorough due diligence process, which included an assessment of potential partners.
The firm “is not aware of, nor has it any knowledge or received any indication…that any drugs traffickers remain shareholders of [Esmeracol],” she said in an email. “Gemfields’ joint venture partner will be a new and recently formed company called New-Esmeracol with its own shareholder structure…Cartel members are not in any way connected to this entity – either as minority shareholders, or in any other capacity.”
Gemfields heavily promotes its allegedly ethical practices with the help of Kunis, who, lamentably, is married to Ashton Kutcher. “Diamonds have long been said to be a girl’s best friend, but a hypnotic new video of Mila Kunis dripping in rubies is certain to change that,” the British tabloid Daily Mail reported last year about a Gemfields PR release. “The 31-year-old showed off her cherry red jewellery while caressing her face.
Gorham said that Gemfields “is very proud of its commitment to responsibly sourced coloured gemstones and is confident that its investment into the sector in Colombia will enable further development of the industry there that will deliver economic benefits to its citizens.”
I’m not going to stoop to exploiting the names of Kunis and Kutcher to get you to read an important story about international drug trafficking and moneylaundering. But I would ask you to dwell on the role of Loretta Lynch and the Obama administration here.
What were Lynch — who previously cut an equally bizarre sweetheart deal with one of Donald Trump’s business partners — and the Obama administration thinking when they went easy on these Colombian drug lords? And if it was a good deal for the public, why hide the details?
I’ve just been tipped to this story but I’ll be keeping an eye on it. Anyone with pointers please email me at firstname.lastname@example.org.