History's Greatest Gold Heists

This is Breaking The Dollar, the podcast that dismantles some of the biggest misconceptions about money.

Presented by Gainesville Coins.

Hello and welcome back to Breaking The Dollar, I'm your host, Everett Millman and this week we're going to be talking about a kind of interesting lighter topic and that is gold heists.

And it does seem like one of those crimes that you wouldn't really expect to happen anymore. With all the security and all of the measures that are taken to catch people for doing these things. All the camera footage, you would think it's near impossible to pull something like this off and yet it still happens.

One incident came from Mexico City where armed robbers basically just walked right into a vault in a bank. Presumably, you know, they threatened the guard and they got access, but all the reporting seemed to imply that the door to the vault was already open and they walked in.

They took about $2.5 million worth of gold coins and they got away.

And a similar, even bigger incident happened at an airport in Brazil, only two weeks after that where the thieves cleverly painted an SUV to look like a police vehicle and they stopped a cargo plane and took about an estimated $40 million worth of precious metals.

And once again, early reporting was that there were no leads. They didn't have any suspects and they made off with the gold. Now hopefully they have since been caught, but it prompted me to want to share some of the, you know, even more bizarre stories of some of the biggest gold heists in history.

And if you're expecting to see, you know, some of the big names of gangsters, like, John Dillinger, Al Capone, they don't make this list. And I think the reason why is that if you're going to steal something, gold presents some issues because it's much easier to make off with bags full of paper money or you know, in the modern day to digitally hack and steal money from an electronic bank account than it is to carry heavy bars of gold with you.

And then there's the obvious problem of, okay, what do you do with that gold?

And so in a few of these gold heists that I bring up, you will see how the gold itself presented a problem to the robbers after they had made away and had the gold.

So I'll start with one from more recent history.

In 1995 in Australia, there was a wealthy media entrepreneur who famously had a lot of gold and diamonds and jewelry and other valuables on display on the desk in his office under glass, sort of as like a status symbol to show off to everyone, you know, look at these shiny trinkets that I have. And he also did have a safe in the office that held many kilos of gold. I think it was about 285 kilos of gold.

Well, sometimes when you flaunt your precious metals it attracts people to come after it. And in 1995 someone did exactly that. They broke into Mr Packer's office. They broke into the vault and stole everything in there, and they stole all the gold and the jewelry from the little glass display on his desk.

And one of the recurring themes that struck me in a lot of these stories is that again, nobody was brought to justice. They never found out who took his gold, his valuables. There were no very good leads. The only fingerprints available were those of packer himself and someone who was working on the vault, so that was an interesting one.

A lot of the quote unquote biggest heists of gold that history has recorded really aren't the prototypical robbing a bank or breaking into a safe, they actually focus on big war crimes.

And I'm talking about in World War II, a lot of times you'll see the number one gold heist listed as the Nazis during World War Two. They went and they basically pillaged all the valuables and gold from everywhere in Europe and then funneled it into Swiss banks. And in some cases it's believed that they were able to smuggle some of that gold out of Europe for the allies were ultimately victorious.

So that's one that you often see come up. Another one that I think is more interesting is what the Japanese did during World War Two.

The imperial Japanese army had a similar strategy of basically pillaging and robbing all of the gold in mainland China because the Japanese were actually occupying China even before the war broke out in Europe. So for about a decade, they were grabbing up all the gold that they could find from a war strategy standpoint.

This makes sense because you have to fund the war effort with something. And at the time, gold was still considered money.

Now there's a mythology surrounding what happened to all of that gold.

I've seen estimates that the Japanese looted between 6,000 tons of gold during the war to as high as 10,000 tons.

That is a lot of gold, to say the least. But like the Nazis, they ultimately did not win the war. So where did the spoils go?

And this brings up the myth, well, maybe not a myth of Yamashita's gold. Now it is so named because Yamashita was one of the generals in the Pacific for the Japanese army during the war. And there's this very rich mythology surrounding his and the military's involvement in what happened to all of that gold that was looted. The theories place that gold buried somewhere in the South Pacific, either in Singapore or Malaysia or especially the Philippines.

And really it was just rumors and gossip about how there was this massive treasure of gold that had to be hidden somewhere. And nobody had found it. Treasure hunters had been searching for it for decades, and there was really no news about it.

It was just again, like a myth until in the 1980s a man by the name of Rogelio Rojas made the claim that he had discovered and found the underground tunnels where this gold was being stored.

Now you get claims like this all the time. So to circle back to the idea of Nazi gold, a few years ago there were these treasure hunters in Poland who claim they had used ground penetrating radar to find these old tunnels underneath cities in Poland where there were trains full of Nazi gold and geologists disputed this and it is still somewhat a possibility. You know, nobody has actually spent the time and effort to dig down there and go and see if there's actually gold in these tunnels because it's partly a dangerous enterprise and it's also potentially harmful to the environment.

But nonetheless, I just bring that up to show an example of that. Just because someone makes a very detailed claim about there being hidden treasure somewhere doesn't always mean that it is true.

But in the case of Rojas, he kind of put his money where his mouth is and he went to court. He sued the former president of the Philippines, Ferdinand Marcos, claiming that after Rojas had found this gold in the Philippines, he had been jailed and intimidated and beaten by the authorities who were covering up the discovery and hoarded all of that gold for themselves.

And strangely enough, this court in Hawaii found Rojas's evidence to be compelling enough that they awarded him damages. Now they said that the amount of gold he claimed that was down there Yamashita his treasure of being, you know, many thousands of tons of gold was purely speculative. But to the amount that he could back up, he had found at one point they did award him damages.

The court did declare that he was telling the truth about this myth. And in fact, President Marcos, his wife even went on the record a few years after the trial and said that she did believe that her husband's fortune came from the Yamashita treasure.

So you will still see in most circles, Yamashita's gold is treated as a pure myth, as a fabrication, but not just in the court of public opinion in an actual courtroom where the law reigns supreme.

Now perhaps the most famous or the most interesting gold heist that happened and it is indeed one of the largest in terms of value was the Brinks Mat heist which occurred in London in 1983.

So at the London Heathrow Airport there was a warehouse attached to the airport that a group of six robbers broke into because they had gotten a tip that there was about 3 million pounds of cash stored in the vault and kind of comically when they broke in and got there, they doused the guards and gasoline and threatened to light them on fire if they didn't open the safe.

When they did give them the code, apparently it didn't open the safe, but they were still able to find separate storage area that had a massive amount of gold and this was not what they were expecting to steal.

Like I said before, it's a lot easier to steal paper money you can make off with a lot more of it with less effort. And it's probably also easier to cover your tracks.

But nonetheless, they were presented with the opportunity and they stole what amounted to roughly 26 million pounds worth of gold net value. That valuation comes from at the time in 1983 so if you factor in inflation that comes out to like 87 million pounds in today's money, which if you do a quick translation over to US dollars, that's $105 million worth of gold, over a hundred million dollars. So this still goes down in history as one of the greatest gold heists.

But what also makes it interesting is that unlike all these other cases where you really never got any sort of resolution about who committed the crime or where the gold ended up, in the Brinks Mat case, everybody was caught. It didn't even take long.

And this is one of the drawbacks to stealing gold is that you're not going to be able to reliably sell it without someone raising suspicions about where that gold came from and perhaps, you know, connecting the dots that there was just this major gold highest that was reported in the news.

So the Brinks Mat robbers did go to some pretty extreme lengths to try and cover their tracks.

There were stories about how they started smelting the gold and mixing it in with copper and aluminum supplies and then trying to sell that, which doesn't sound very logical because how are you really getting the full value or even partial value for your gold if you're just selling it as an alloy of copper or aluminum or something that just, that doesn't really work.

They mainly laundered the money, which makes sense that they got a financial institution that was not very reputable and in fact was one of the few banks that were implicated in the Panama Papers, which was a big disclosure of money laundering going on around the globe. And in due time, the authorities were able to kind of put the pieces together and see that this money was being laundered. This was dirty money and they connected it to the Brinks Mat robbery.

If you've ever seen the movie Goodfellas after the Lufthansa Heist, the big kind of climax of the movie where they make off with millions of dollars from an airport robbery, the next phase and the rest of the movie is how everyone else is getting killed off. Everyone who has any connection is being murdered by their own mob bosses. And that in fact that string of murders is sort of what helped connect everything back to the perpetrators.

And that movie came out around the same time as this as the Brinks Mat Heist. I don't think there was any sort of connection because Goodfellas is remarkably historically accurate if you look into it. But that exact same pattern played out in the Brinks Mat case that basically everyone besides the bankers who are laundering the money ended up dead.

At some point, all of the robbers were murdered. All of the people who were connected to it turned up dead or missing really is an extraordinary story that had implications for years and years to come.

And just so you know, the money laundering aspect of it was adjudicated. You know those people did go to prison for a long time so they didn't get off scotfree either, but at least they survived with their livelihood intact, you know, they weren't killed. So really that was just a kind of interesting topic that I wanted to cover.

But it does bring up two lessons. One is that as I said earlier, most of these cases nobody got caught. Or even if they did, it was near impossible to recover the gold that was stolen. So it does bring up a certain problem with the international gold trade in that it's not very transparent. You know, central banks report on how much gold they hold and there are different sources of data about how much gold is held out there. But unless there is an audit done, you never really know. So it is a bit of a black box, not a whole lot of transparency. The second one is that obviously there is some liability in holding and storing gold and that is why most investors will put their physical gold in fully insured vault like the one that we have at Gainesville Coins. So it does make some sense just to take that liability off your hands in case someone wants to come and steal it.

So now we will take a look at our question of the week from the listeners.

This week's question comes to us from Mary in PH, I guess that means Philadelphia, I'm not sure.

And she asks, Why does the gold and silver ratio matter?

And that is a pretty good inquiry because I've been hearing a lot of stuff lately about how it does not matter. I could probably go into a lot of depth on this topic. You know the historical implications of it, but simply I'll give you the short version.

Simply put, the gold silver ratio is how many ounces of silver does it take to equal one ounce of gold? It's simply a ratio or comparison of the prices of gold and silver at any given time. And one of the things that I've been looking at is that the ratio is really high right now.

It is close to 90 to 1 which is again close to an all time high.

Historically in the past 30 to 40 years, it's been closer to 50 to 1 or even 40 to 1. So for it to be at 90 to one it implies that silver is rather undervalued relative to gold.

And again you can say that it's a sort of meaningless comparison. I don't tend to believe that.

But even if you do think that, it's just interesting to keep in mind where the trend is going and that there is a phenomenon in statistics called regression to the mean.

So if the gold to silver ratio is really high by historical standards, it does seem to imply that at some point it will correct back in the other direction and silver will get closer to the value of gold.

So that was a very interesting question, I'm glad that we covered that one. Maybe at a future date I will go further in depth to that.

So as always, I want to thank all of you listening out there. We really appreciate it and be sure to tune into our next episode where I dive into the famous Hunt Brothers failed attempt to corner the world's silver market. Fascinating story. Be sure to check out.

Today's episode was presented by our sponsors, Gainesville Coins. You can find out more at GainesvilleCoins.com

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