How Illegal Drug Cartel Gold Becomes ‘American’ Inside The US Mint, Netting Billions

Last Updated:April 27, 2026, 09:35 IST

An investigation has found out that US Mint gold coins, which legally require use of only American gold, rely on foreign and illegal sources for gold.

A New York Times investigation has found that the United States Mint’s gold coin programme, which is legally required to use only American gold, is actually built on foreign and often illegally sourced gold.

Each year, the Mint sells more than $1 billion worth of investment-grade gold coins. These coins carry symbols such as the bald eagle, presented as a guarantee that the gold is entirely American. The Mint has also promoted its coins as a link to the country’s founding principles.

However, the investigation found that the supply chain behind these coins includes gold linked to criminal groups, conflict zones and environmentally harmful mining practices.

Law and reality of US gold at odds

In 1985, the US Congress banned the use of foreign gold in Mint products. The aim was to prevent links to human rights abuses, particularly those associated with apartheid-era South Africa.

Despite this, the Mint has continued to source foreign gold across both Democratic and Republican administrations, even in the face of internal warnings. This raises questions about whether the programme has been operating in violation of the law for decades.

The findings suggest that even commemorative coins, including a 24-carat gold coin marking the United States’ 250th anniversary, may be made from mixed or non-American sources.

Gold from high-risk sources

Records show that the Mint’s supply chain includes gold originating from a mine controlled by Colombia’s Clan del Golfo. Other sources include pawn shops in Mexico and Peru, a Congolese mine partly owned by the Chinese government, and a Honduran company that extracted gold from beneath an Indigenous graveyard.

The investigation found that hundreds of millions of dollars’ worth of foreign gold has entered the Mint’s supply chain in recent years. Some of this gold comes from regions where mining is linked to criminal activity or where tracing its origin is difficult.

How illegal gold becomes “legal"

The report describes a process in which illegally mined gold is effectively cleaned through paperwork. In Colombia, for example, small-scale mining licences allow sellers to register gold as legal, even if it was mined using banned methods or in restricted areas.

This gold is then sold through official channels, mixed with other supplies and exported. By the time it reaches international markets, it is treated as legitimate.

The transformation does not stop there. Once the gold arrives in the United States and is refined, it is often regarded as American, regardless of its origin.

Refining and reclassification of gold

At facilities such as Dillon Gage in Texas, imported gold is melted and combined with gold from other sources, including domestic supplies. After this process, the gold is treated as if it originated within the United States.

This practice allows foreign gold, including material from illegal operations, to enter the Mint’s production line under the label of American gold.

Industry officials acknowledge that once gold is mixed in this way, its origins become difficult to trace. As a result, distinctions between legal and illegal gold exist largely on paper.

Weak oversight

The investigation found that oversight of the Mint’s gold sourcing has been weak. For around two decades, the Mint did not ask suppliers where their gold came from, according to a Treasury Department audit in 2024.

Even when risks were known, such as the classification of Colombian gold as high-risk, the Mint did not conduct detailed checks on its supply chain.

Internal audits also revealed that the Mint relied on a system where suppliers could offset foreign gold by purchasing American gold separately. However, US law does not allow such arrangements, and the Mint has not consistently enforced even this requirement.

Impact of the gold trade

The findings highlight broader issues within the global gold market. Rising prices, now around $5,000 an ounce, have created strong incentives for illegal mining and criminal activity.

Gold is often seen by investors as a safe asset during times of uncertainty. However, the investigation suggests that increased demand can contribute to instability.

Gold mining has been linked to funding conflicts, including Sudan’s civil war and Russia’s invasion of Ukraine. It has also helped countries such as Venezuela and Iran manage the impact of sanctions.

In Colombia, groups like the Clan del Golfo use gold profits alongside drug trafficking to maintain control through violence. Illegal mining also causes environmental damage, including deforestation in the Amazon and mercury pollution that harms local communities.

What the US Mint said?

After being presented with the findings, the Mint said that the United States was its “primary" source of gold and that steps were being taken to improve tracking.

Scott Bessent, whose department oversees the Mint, said a review of gold procurement practices would be carried out to ensure compliance with the law and protect national security.

However, no major policy changes have been implemented so far. The Mint has not released a detailed gold-tracking policy, and officials have indicated that cutting off foreign gold entirely would make it difficult to meet demand.

The investigation further said that the current system allows gold to undergo two transformations. First, illegal gold becomes legal through documentation. Second, it becomes American through refining and classification practices.

This process hides the true origins of the gold used in US coins, raising questions about transparency, legality and the wider impact of the global gold trade.

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