Exclusively for International Man readers (you can sign up for free here), David Galland of Casey Research interviews Tom M, a long-term CR subscriber who attempted to physically transport his personal gold to Panama via Mexico City, and ended up in a Mexican jail as a result. His harrowing story, and the lessons learned, follow.
David Galland: Tom, how are you?
Tom M: Absolutely wonderful. I'm not in jail and I got my coins back.
DG: It's good to hear. When I first heard about the incident, my initial reaction was to be mortified and my second was ‘what the hell were you thinking?’ A couple hundred thousand dollars worth of gold coins through Mexico, of all places. Can you walk us through what happened?
TM: There was a Casey conference in Las Vegas about a year ago that I had planned to attend. As I live about a 4-hour drive from Las Vegas, and because I had these coins that I wanted to take to Panama and stick them in a safe deposit box there, I figured (strictly for logistical reasons) it'd be convenient to drive to Las Vegas, fly to Panama via Mexico City, drop off my coins, come back for the Casey conference, and drive home. That's why I went through Mexico City. I thought nothing of it.
DG: How many coins are we talking about?
TM: 150 one-ounce coins.
DG: So you arrived in Mexico City, and then what happened?
TM: Normally when you get on a plane and you need paperwork in the country you're landing in, they give it to you on the plane. In this case either I wasn't paying attention or the airline forgot to give it to me, but I didn’t get the paperwork. Regardless, when you land in Mexico City, even if you are taking off an hour later on another flight, you still have to fill out an immigration form and have it stamped. Well I didn’t have that immigration form.
So I'm sitting at the gate waiting to board my plane to Panama and I have my boarding pass and my passport – what else do you need? Well, when I got up to the gate they said, "Oh where's your immigration form?" To which I responded, "My what?"
So, they showed me one and told me I would have to go downstairs to a certain desk, get the form, have it stamped and then bring it back. So here I am in Mexico City in a pretty big airport with my plane already beginning to board, and I don’t speak the language and I'm running with a backpack and a frontpack through the airport trying to get this silly immigration form stamped and get back in time to catch my flight.
I finally find the place to get the immigration form. Fortunately, there was nobody in line, so I just went right up, they gave me the form and stamped it, then I ran back to the gate. Unfortunately, just as I got to the gate, they closed the door and refused to let me on and told me I’d have to take the next flight.
Normally, at least in the US, if you miss a flight, they can give you a new boarding pass for the next flight right there at the gate, but in Mexico City you have to go downstairs to the main office of the airline, which means you have to go outside of the secure area.
DG: Up to this point you had not left the secure area?
TM: Until this point I have not left the secure area. But now I had to do so in order to find the ticket office.
DG: Were you starting to get a little nervous about this time?
TM: Not yet. As far as I was concerned, it wasn’t a big deal. I'm carrying less than $10,000 face value of US currency so I thought nothing of it. So I leave the secure area, buy my new ticket, then head back upstairs at which point I have to go through security. And the security person wants to see what's in my pack.
So I said "Okay, that's fine, but let's do it in private" because I didn’t want all these people to see that I was carrying a lot of valuables. So they took me into a private room and I showed them the coins and the officer said, "Hmmm." He had to call his superior and his superior came and she looked at the coins and said, "Hmmm, I don’t know." And so she called her superior, and then he came in, and they kept ratcheting things up, but nobody knew what to do. So, eventually they decided to take me to the jail for a 48-hour hold. Of course, I asked, "A 48-hour hold, for what?" But at this point, things were already spiraling in the wrong direction.
So they took me to jail where I met the prosecutor who said, in effect, "We're going to send you to the prison and if you didn’t do anything wrong, prove it, and you'll get out."
DG: I saw the picture of you sitting at a table with your gold piled in front of you – at what point did that happen?
TM: That was while we were still at the airport, in some conference room. I didn’t know at the time what was going on, but they must have called in the media to make a big spectacle of it, because there were people in there with cameras taking pictures and they laid all the coins out and, well, you know.
DG: In an odd way, having you and your coins appear in the local media may have worked in your favor because otherwise they might have just taken you out and killed you for your gold.
DG: In a previous business, I did a bit of business in Mexico and was often asked for bribes. So my initial reaction when I heard you had gone to Mexico with these coins and gotten in trouble, was to wonder why you couldn’t have just paid a bribe to get on the next plane out.
TM: Well, you know, it's interesting. Nobody ever asked me for a bribe and I didn’t dare offer a bribe in any step of the process.
DG: That may have been your mistake.
TM: A number of people have told me that I should have offered the guy who had me in that private room a 100 bucks and said "Look, I have to get on my plane, here take this and let me go."
DG: One of the coins probably would have done as well.
TM: Or one of the coins, exactly.
DG: But they didn’t ask, and you didn’t offer – so there you were. How long were you at the airport jail before they took you down to the regular jail?
TM: I was in the airport jail for about 48 hours.
DG: Can you describe what the conditions were like?
TM: There was only one person in the cell and that was me. It certainly wasn't clean, but it wasn't disgusting either. There was a toilet but absolutely no privacy. So you have ladies walking around and looking in on you while you're sitting on the toilet doing your thing. In any event, it wasn't comfortable but it wasn't disgusting by any stretch.
DG: Up to this point, had you been able to make a phone call? Did anybody know what had happened to you?
TM: Actually, while I was still in the airport jail, they asked me if I wanted to call the US Embassy, to which I replied something like, "You’ve got to be kidding, of course." Again, I don’t speak Spanish and they didn’t speak much English, so getting that message across was kind of a challenge, but eventually a guy from the US Embassy came over to the airport jail and he gave me some stuff to read about surviving life in a Mexican prison.
DG: Not very encouraging, I would think?
TM: No, it wasn't encouraging at all. And the guy from the Embassy told me that if any attorney came to see me in the Mexican prison, they’d ask for a fortune and promise me the world. Lo and behold, when I got into the main prison, the first attorney that got there promised me the world and wanted an $80,000 retainer and my bail was less than $3,000. An $80,000 retainer for a $3,000 bail didn’t make a lot of sense – so, it was pretty much right in line with what the guy from the embassy told me to expect.
DG: Interesting. So you said "No"?
DG: And so did you post bail and get out of jail at that point?
TM: Well, what's interesting is that I had something like $3,500 cash in my fanny pack. And because my bail was less than $3,000 you’d think I’d be okay. But there was more to it than that. First off, according to Mexican law, with something like 48 hours you have to see a judge, which I did, along with a public defender, though he didn’t speak English. Fortunately, the judge spoke a little bit of English so I was able to explain to him what happened and he said, "Okay, we'll give you bail."
But then came the problem of how do you get bail? I don’t know anybody in Mexico City, not a single soul. And my cash is at the airport jail, so how do I get my cash to pay bail?
It was a real challenge, but eventually I got out – or, at least I thought I got out. They sent me to an immigration detention center for a week, and guess what they told me they needed at the immigration detention center? A copy of my passport. Well my passport is at the airport jail, now how do I find somebody in Mexico City to run the errand of going to the Mexico airport jail to get a copy of my passport and bring it to the immigration detention facility?
DG: What about the American Consulate?
TM: They’re useless. They don’t run errands like that.
DG: So giving you that nice report on surviving in a Mexican prision was about it?
TM: That's it, pretty much.
DG: Did you explain this to the judge? Did they just say "Well, you know, tough luck”
TM: Oh, they have a process by which they will get to the airport jail, get a copy of your passport and bring it to the immigration detention center, but that doesn’t take a matter of hours. The process to get that done takes a week. So I was in there for a week.
DG: And what were the conditions in the new prison?
TM: God awful. Have you ever seen the TV program "Locked up Abroad?"
TM: Well, if you get a chance, watch it. I think it was made by National Geographic or PBS, but the conditions were absolutely disgusting. The sewer is like an open trough — it's not in a pipe, it's an open trough and stinks to high heaven.
DG: It runs through the cell?
TM: Not through the cell but through the yard. All the prisoners have to go out to the yard to take roll every day. They call your name and make sure you're there, but out in that yard they have this open sewer with a grate on top, but half of the grates are broken and gone and it's absolutely disgusting. Because I was an American, I got special treatment, so there were only two guys in the cell. But other than that, it was absolutely disgustingly dirty. And there are no pads to lay on, you just lay on the concrete. You can't drink the water in there either. The Mexicans won't even drink it. It's yellow as it comes out of the pipes.
DG: So what did you drink?
TM: In the car on the way from the airport jail to the prison, there was a 2 liter bottle of water on the seat and I asked the guys driving me if I could have a drink, that I was very thirsty, and they said "Sure." Well, I took that bottle with me and nursed that for a while. Then, when that was running low, I befriended the right-hand man of the warden, who was an inmate, spoke English and he took my bottle over to the water cooler and filled it up for me.
DG: How did the other prisoners act towards you?
TM: They taunted me.
DG: Taunted you?
TM: Yes, they would poke at me, trying to get my ire. So I basically stood back and tried to be as unobtrusive as possible and then I tried to learn how to fit in by watching how they interacted with each other. I realized that what I'd learned in some of my psychology classes was true, that you cannot show any weakness. They would poke each other, and if you didn’t hit the guy back harder than he hit you, you're toast.
TM: So watching the other inmates and how they interacted with each other, I came to the realization that if somebody messes with me I'm going to have to just deck them; just lay them out.
DG: Did it come to that?
TM: No, I saw a couple of other guys in that situation, but it didn’t come to that with me. I had one guy say, "Hey, you have pretty lips." Another guy said "Hey, my buddy over here is gay" and I just said "Well, good for him" and ignored him as much as I could. But you know, I was the only caucasion guy in a prison of 8,000 guys - at least that's what they told me. In America that would be pretty darn intimidating, but down in Mexico it's not that big a deal, other than the fact that they think you have money and they want it.
In fact, there are kidnappings inside the prison. The worst thing you can ever do if you are in a Mexican prison is let anybody know your family's phone number, because there are pay phones in the prison, and what they do is call your family and say "Hey, you either put $1,000 in my wife's account or we're gonna kill your husband." And they do. There were 3-4 murders a week in that prison.
DG: So you were there – how long were you in the worst part of the prison there?
TM: Only three days.
DG: How long were you in the various jails down there before you got free?
TM: It was a total of two weeks.
DG: So, where did you go after the worst three days in the jail?
TM: After three or four days – I forget – I was taken to the immigration detention facility where I stayed for a week while they got a copy of my passport from the airport. Meanwhile a friend of mine from Panama, who was expecting me, called somebody he knew in Mexico because, when I didn’t show up, he figured there was a problem in Mexico. So somehow this guy in Mexico found me and brought some cash to the prison for me. I didn’t know who he was. Some guy out of the blue came to visit me at the prison and gave me some cash, and with that cash I bought a phone card and I called everybody I knew in the little town that I live in – not everybody – but the few people I knew who had passports. I begged and pleaded for them to get down there and help me, but not one single person was willing to do anything.
TM: I couldn't believe it.
DG: So that's kind of an interesting wakeup call.
TM: It is. Here I was in an emergency, and no one would come to help. I guess it tells you who your friends are.
DG: I’d say so. So, okay, you made bail. Did you get on the next plane out of town, or did you stay there?
TM: It was all very strange. I mean, they open the doors and you walk out and quickly realize you have no idea where you are. Fortunately, I had befriended a guy who worked at the immigration jail who spoke some English. He wasn't supposed to do this, but as I walked out the door, he said "You just wait. In about 15 minutes I'll walk out the same door because I'm off work, and you just follow me and I'll take you to where you need to go to get a cab to a Radisson Hotel." And he did.
DG: Weren’t you concerned that he was just trying to scam you?
TM: Yes, I was concerned, but he didn’t. The first thing we did was go to a mall where I bought a cellphone and then I went to the Radisson Hotel, and from there I started sourcing lawyers. I was there for about a week interviewing lawyers before I went home.
DG: You mentioned, in a separate conversation, that you had found a very good lawyer.
TM: I think so.
DG: Well, you ultimately managed to get your coins back, though it took several months, which is a good sign.
TM: Yes, if the guy is good enough to get my coins back, I think he is pretty good.
DG: So you got on the plane that day with a couple hundred thousand dollars worth of gold, and after a long and tortuous experience, you have them back. What did this little misadventure cost you?
TM: About $60,000.
DG: And you're suing the Mexican Government to try to recoup the $60,000?
DG: Are you trying to get anything on top of that, for unlawful arrest or stress or such?
TM: My lawyer is just guiding me through the process, and he doesn’t speak any English, so we have an interpreter. So we’ll find out.
DG: So let's cut to the chase then. You’ve gone through an experience that most people would, you know, rank up there with their worst nightmare come true.
DG: So what are the most important lessons you derived from this experience? For example, what would you tell someone who is thinking about transporting their gold across borders?
TM: I would recommend against it. There are organizations that have that service available. But as far as Mexico goes, the biggest problem in Mexico is the burden of proof is on the accused, which is the opposite of the US.
DG: Well, I was once dunned by the State of New York for residency related taxes, and when I told them that I had never lived in New York they said "Well, prove it". And I was forced to prove it. Okay, but generally speaking, yes, here you are innocent until proven guilty. That’s not the case in Mexico?
TM: Well, actually, the Mexican law is changing. Starting in January 2012 it's reversing, so the burden of proof will be on the prosecution. But when I was in the immigration detention facility, I met a couple of prisoners from the United States, one of which was a dive master for a resort. He said he had been accused of rape and he was in prison for five years before he could prove he was innocent. In his case, he found the girl who accused him and then she said, "Oh, he's not the one." The burden of proof was on him.
This subject came up while I was interviewing a lawyer and he said, "Oh, yeah, I have a friend who was in prison for 10 years before he was able to prove he didn’t do whatever it was he was charged with."
DG: So, would one lesson be to stay out of Mexico?
TM: At least until they change the law. Otherwise you can get accused of something, and automatically be thrown into jail and they’ll say, "Okay, prove you didn’t do it". So at least until January 1st 2012, I would stay out of Mexico.
The second thing I would say is if you want to diversify your gold internationally, I would tell people to sell their gold in their home country, and then rebuy it in the country you want to store it in.
DG: Yes, you can buy gold in Panama.
TM: Yes, you can buy gold in a lot of different places.
TM: But unless you know what you're doing, either sell it here and rebuy it there.
DG: So has this dampened your enthusiasm for international travel?
DG: That's good.
TM: No, but actually the Mexican Government put me on a smuggler's watch list, an international smuggler's watch list.
DG: That was kind of them.
TM: Yes, so when I flew back to the US, the guy in customs says, "Hey, you wanna explain to me what happened in Mexico?" So I explained it to him and he just shook his head and said "Oh my gosh." Later I took a trip to Belize and they saw the same list and they took me off to the side and opened my computer, turned it on and looked at everything they could find in there. And, of course, they searched my baggage. Fortunately, they didn’t go in for any proctology.
DG: Is there any way of getting off that list?
TM: Well, supposedly I'm now off of it. According to my lawyer, that's something the Mexican officials say they have taken care of.
DG: Another lesson one might derive from your experience is that if you're going to be doing anything at all that could get you in trouble, even if it is just traveling to some place a little dodgy, it could be a good idea to make sure you've got a network of contacts in place that can help should the need arise. Clearly your support network wasn't in place, and it was fortunate you had that friend in Panama that came through for you.
TM: That's a good point. As an aside, when I got back and told the story to different friends here and there, a couple of people said, "Well, why didn’t you call me?" Including the guy who services my RV, who told me he’d be on the next plane. But, when push comes to shove, you never know whose going to come through for you.
DG: Actually you could have called us. We've got a lot of subscribers in Mexico, I'm sure we could have found someone to help you out. That's sort of the idea behind the Phyles, where like-minded people support each other. Out of curiosity, how has your relationship changed with those people you called who refused to help?
TM: Well, now I know that they’re acquaintances, rather than friends. I still associate with some of them and visit with them and go out to lunch and this and that, but I realize that, you know, when the chips are down, they won't be there. One of the guys I called has a place in Mexico – and I begged and pleaded with him to fly down to help me and he just absolutely refused. So I’ve thought that if he goes down to Mexico and has a problem, gets thrown in jail, and calls me for help I would say, "Up yours.” But I know I’d still get on the next plane and fly down there and do what I could to help.
DG: Because you know how serious the situation could become.
TM: Exactly. I mean, here I'm in prison with guys who were saying, "Yeah, I've been in here for five years" and another guy said, "Yeah, I was sentenced for 10 years for bringing 3,000 pills of whatever drug through and they threw me in prison" and he said "You'll probably do five years." Now think about that, you're in this god awful Mexican prison and one of your fellow prisoners says, "Yeah, you'll probably do five years."
There's nothing more terrifying than that, at least not that I've experienced.
DG: On that note, we’ll call it a day. Thank you very much for sharing your experience. Maybe something good will come of it, after all – even if it is saving someone from following in your path.
As we have seen, personally transporting gold bullion across international borders can be very risky. It's simply a very bad idea, and you are asking for trouble if you attempt it.
A key benefit of using the Hard Assets Alliance to accumulate and store gold abroad is that you are relieved of the major burden of having to transport it yourself. To learn more, click here to download a free report from the Hard Assets Alliance.