Credit: Bloomberg Businessweek

How to become an international gold smuggler

His first move was to persuade Gonzalo Farias, a metals exporter in Santiago, to take him on as a supplier. In September 2013, Vilches made his first delivery to Farias—6.6 lb. of gold legally acquired in Chile. He made several more such deliveries. But he wanted to be bigger. He went around Farias and cut a deal directly with Fujairah Gold, a Dubai-based company that Farias supplied. In June 2014, Vilches signed a contract to deliver 6,000 lb. of gold over the next 12 months to Fujairah’s head office. The contract began with 90 lb. the first month, then ratcheted up. He didn’t have the money to buy that much gold, so the company gave him access to an account holding $5.2 million. This was his big break—the contract was potentially worth more than $100 million. He stood to make $2 million to $6 million in profit.

This was beyond ambitious for Vilches—there weren’t enough available gold coins and jewelry in Chile to fill Fujairah’s orders. So Vilches decided to become a smuggler. It was easy: He Googled gold dealers in Peru.

Michael Smith and Jonathan Franklin in Bloomberg Businessweek.