After 9 p.m. On January 24, 2020, two American businessmen walk towards a customs desk inside the airport in Manaus, Brazil, a bustling city on the edge of the Amazon rainforest.
Frank Giannuzzi and Steven Bellino were New York moneylenders. Bellino, then 62, had worked as a Wall Street trader since the 1980s. Giannuzzi, then 39, was an equity trader before starting a string of businesses ranging from financial services companies to online auction platforms.
With gold prices rising in 2019, the two friends devised a plan to cash in, Bellino later said in court papers.
Giannuzzi’s Brazilian wife set him up with a local gold dealer. There was a meeting in Sao Paulo. One in New York.
Now, just months after launching their venture, Bellino and Giannuzzi are walking through the Manaus airport with four canvas bags full of gold and their Brazilian partner by their side.
The Americans prepared to catch a flight to New York via Miami, but a team of Brazilian Federal Police officers were waiting for them. Ricardo Livio, a geologist with Brazil’s federal police, said authorities were acting on “intelligence” that the men were carrying irregular cargo.
The officers searched his bags and found the treasure: 61 gold bars, weighing 77 pounds each. Value: $1.4 million, according to a police report.
Officials scanned the gold with a handheld device used to detect the composition of precious metals. The paperwork, held by Brazilian merchant Brubeck Garcia Nascimento, said it had a purity level indicating it came from mining rather than molten jewelry.
The authorities confiscated the gold, and Nascimento was arrested on charges of illegal smuggling and usurping raw materials belonging to the country.
Bellino and Giannuzzi were detained and interrogated but released without charge. He told the Brazilian authorities that he had no reason to suspect the gold was illegal.
The incident triggered an intercontinental legal battle that lasted three years and involved an eccentric Austrian businessman who had previously been accused of smuggling gold into Brazil.
Bellino and Giannuzzi’s friendship has not proved as lasting as the attempt to retrieve the gold. A few months after the ill-fated trip to Brazil, they had a rift that led to a separate lawsuit in New York.
The saga provides a window into South America’s efforts to fight the illegal gold rush, where wildfire mining has ravaged the Amazon.
Illegal gold is a prized commodity for drug cartels and other criminals, who rely on it for money laundering and illegal business. Gold trade experts say the ease with which New Yorkers obtained 77 pounds of suspect gold underscores the challenges of cracking down on a trade that fuels environmental destruction and enriches international criminal groups. Is.
Consulting Firm I.R. “They could just as easily have been some people who were looking for money laundering with this,” said David Sood, head of research at the Washington Post. Consilium, has researched the illegal gold trade in South America. “It shows how much of a wild, wild west the gold market is in most parts of the world, but especially in Brazil.”
Bellino and Giannuzzi declined to comment through their attorneys.
Brazil has long been one of the world’s top producers of gold. But as in other countries where the Amazon stretches, illegal mining there has skyrocketed in recent years.
Experts say that the rising demand for gold and the policies of former President Jair Bolsonaro had led to a boom in Brazil. After taking office in 2019, Bolsonaro pushed for less oversight and more mining in the Amazon rainforest, resulting in gold mining becoming free for all.
Well-financed criminal gangs and hordes of poor laborers were wreaking havoc on the land and endangering the indigenous groups that depended on it. Miners use toxic mercury to separate the gold, which pollutes waterways and contaminates the soil.
Illegal mining operations in the Amazon also fuel climate change through the destruction of large swathes of rainforest, which store vast amounts of carbon.
The most affected tribes include the Yanomami in the northern Amazon along the border with Venezuela, and the Munduruku in the Tapajos River region to the south.
In addition to facing famine, the Yanomami and Munduruku people have been terrorized by armed men who are trying to crush resistance to illegal mining activity.
“In the case of Yanomamis, they are going to die because of these invasions,” said Laura Weisbich, a senior researcher at the Igarape Institute, a Brazil-based think tank.
According to Brazilian police documents, a forensic examination of the gold seized from Giannuzzi and Bellino revealed it likely came from illegal mines in the Tapajós region, which is home to Munduruku.
After the gold was seized, the two Americans told authorities that they believed they were dealing with a reputable partner and had no reason to suspect it might be illegal. The men said that the local trader had told them that the proper documents were in order and that the gold could be transported without any problems, according to Brazilian court records.
“He would have no interest in doing anything illegal,” read a police report statement summarizing Bellino’s interview.
“I thought I was doing it the right way,” Jianuji reportedly said.
But experts say even a small amount of research shows that the gold bought in Manaus came from illegal mining.
“In Manaus, you are in the heart of wildcat mining,” I.R. K Saud said. Concilium. “Either you didn’t care how it was received or you showed a lack of discretion about where and how you were doing business.”
According to court documents, on the day the seizure occurred, Bellino and Giannuzzi first arrived at the airport at 9 a.m. to register the gold at the customs office.
The men noted that the gold would be carried in their personal belongings, which was unusual for such a large quantity of gold, and raised doubts about its origin, according to Federal Police geologist Livio.
Livio said officers were stationed outside the customs office with orders to stop Bellino and Giannuzzi when the two men showed up again about 12 hours later for their flight home.
“Federal police already had previous intelligence indicating that the gold held by North Americans may be unregulated,” Livio said.
“For this reason, we contacted him prior to his visit and analyzed the gold still at the airport. The preliminary results made it clear that the gold was from small-scale mining and not jewelry reuse.”
The chain of events reveals that the authorities were already eyeing Nascimento, a Brazilian businessman.
Like Bellino and Giannuzzi, he too was a relative newcomer to the gold business.
Nascimento, now 36, told Brazilian authorities he was a mechanical engineer who only started buying and selling precious metals 18 months ago. He said that he obtained the gold in question from an Austrian merchant named Werner Riddle.
Rydl was well known to law enforcement in both Austria and Brazil.
He was living in Brazil when Austrian authorities accused him of fraud and tax evasion in 2002. An international warrant was issued for his arrest, and Rydl was taken into custody at the airport in the city of Brasília in 2005.
After a prolonged extradition battle, he was extradited to Austria and convicted at trial in 2010.
Five years later, Rydl was detained at an airport in a remote town in western Brazil as he tried to board a plane carrying a 23-ounce gold bar worth $14,000 without any documentation.
Rydl’s attorney was quoted at the time as saying that his client was “an eccentric” who always traveled with the gold bar because he viewed it as a good luck charm.
In interviews with officials at the time, Riddle said that he had acquired more than 27 tons of gold since his arrival in Brazil in the early 1990s. The gold came from a variety of sources — recycled jewelry, electronics, mining — but he said he no longer had any paperwork to prove its origin because it had deteriorated over time, according to a judge’s ruling in the case.
Rydl was sentenced to two years in prison, but the sentence was commuted to a fine and community service.
Reached for comment about the Americans case, Rydl said he sold the gold to Brazilian gold dealer Nascimento, and insisted it came from the jewelry he bought in Brazil from 1991 to 2010.
Asked about forensic testing that officials say came from mining, Riddle said it was “nonsense”.
“Jewelry exists in any purity,” he said.
Nascimento’s gold business, meanwhile, has apparently taken off despite the criminal charges.
His company, BAMC, bought $140 million worth of gold in 2022, up from $1 million in 2019, according to a review of tax data.
Nascimento’s criminal case is pending. His lawyer, Robespierre Lobo de Carvalho, disputed that the gold came from illegal mining and said that the federal police’s forensic analysis “are totally questionable and will be contested.”
Giannuzzi’s company, Doromet Inc., has been fighting to get back 77 pounds of gold since filing a lawsuit in Brazil in March 2020.
After Doormet lost the initial ruling, two of the three judges on the High Court panel decided in favor of returning the gold to the American company.
The judges were not ruling on whether the gold was legal or not. Their decision focused largely on the question of whether Doromet was the rightful owner. The judges also said that the gold was in the possession of the government for almost a year and there does not seem to be any compelling reason to retain it for more time.
Over the next few months, the Brazilian government conducted two additional forensic analyzes on the gold. The two found that it most likely came from small-scale unlicensed mining, known as “garimpo”.
The gold was still scheduled to be returned to Doromet, but then the National Mining Agency intervened by issuing its own seizure notice, effectively saying that the gold belonged to Brazil.
Doromet sued the National Mining Agency in October 2021, arguing that the gold is legal. The matter is going on.
As its cases played out in court, Doromet continued to secure additional shipments of gold from Brazil. But the relationship between Giannuzzi and Bellino deteriorated and eventually ended in October 2020, Bellino said in court papers.
They filed a lawsuit in New York Supreme Court in October 2021, alleging that Giannuzzi reneged on a promise to share profits when gold trading began. The suit says the two men “financed $1 million” to make the initial purchase of gold from Nascimento, $750,000 from Bellino.
But Bellino says in the lawsuit that he only got $200,000 back on his investment while other investors got 18% returns from Giannuzzi.
Giannuzzi’s attorney, Jason Abelove, has filed court documents rebutting the claims.
Abelov declined to comment to NBC News, citing the ongoing lawsuit.
Bellino’s attorney, John Maggio, also declined to comment on the lawsuit.
He said he had no specific information about the gold seized in Brazil because it was outside the scope of the civil case in New York.
“This case is about two friends who had a falling out over a business deal and one pushed the other,” Maggio said.