Aug 10, 2022

Mawazo Writing Africa

Writing about the main

‘Wash-wash’ paradise: Where fraudsters thrive, roam freely

In March 2011, then-Democratic Republic of Congo president Joseph Kabila flew into the country for emergency talks with his host Mwai Kibaki on a rather unusual subject — theft of a large consignment of gold.

The previous month, the murder of a Kenya Revenue Authority (KRA) official, which within security circles had been linked to a gold syndicate, had given a sneak peek into the high-stakes criminal business.

However, it was the unannounced visit by the Congolese president that would expose the extent of the illegal trade, and in particular, the consignment that had caught the attention of the leader of the mineral-rich country that has been plagued by civil war.

Reported to weigh 2.5 tonnes, the gold was estimated to be valued at Sh10 billion — a substantial enough haul to prompt the intervention of the two leaders.

Read: Kenyans named in Congo gold scam

By the time of the high level intervention, a local investigation by authorities is reported to have led to the killing of KRA’s Assistant Commissioner Joseph Cheptarus, who was shot dead while in the process of preparing an investigative report.

After the guarded talks between the presidents, an official communiqué said Kenya and DRC had formed a joint team to investigate an illegal gold smuggling syndicate between the two nations.

Nothing much has been heard of the matter since.

However, in 2019, President Kibaki’s successor, Uhuru Kenyatta, would grapple with a similar high-profile case reportedly involving a gold consignment of Vice President and Prime Minister of the United Arab Emirates (UAE) Sheikh Mohammed bin Rashid Al Maktoum, who is the Emir (ruler) of Dubai .

Read: Probe into smuggled gold deepens

On his way from a summit in Beijing, China, in April 2019, President Kenyatta, who was reportedly accompanied by ODM leader Raila Odinga, made a stopover in Dubai for talks with the Emir who had complained about problems with a gold consignment in Nairobi.

At the heart of this case was a purported recording between the royal family and their Kenyan contact that became the subject of an investigation ordered by the DPP. The matter that had reportedly caused diplomatic tensions thereafter cooled off.

But over the years, an illegal fake currency and gold smuggling business has been thriving, known as ‘wash-wash’, to the extent that this year, authorities have warned of a possible takeover of Parliament by these shrewd operatives.

“We will end up with up to 40 per cent holders of elective office being well known wash-wash dealers. Those are the ones who are hiring crowds. In some constituencies, the people we are profiling and investigating, people on (Directorate of Criminal Investigations Director George) Kinoti’s radar, are the leading candidates,” Interior Cabinet Secretary Fred Matiang’i told a recent public forum on elections.

The apprehension by authorities stems from a weak vetting mechanism that is allowing tainted politicians to run for office as the agencies tasked to weed out undesirable characters continue bickering.

Read: Fake gold, currency seizures point to police vigilance

While the Ethics and Anti- Corruption Commission (EACC) submitted adverse reports against 241 politicians whom it wanted barred, the electoral commission has since cleared a majority, citing legal provisions that unless one has been convicted – and exhausted all stages of appeal – they cannot be blocked.

Parliament’s rejection of recommendations by the electoral commission that imposed spending caps to ensure a level playing field for all candidates has once again allowed a free reign by politicians with deep pockets, including ill-gotten wealth, to try to unfairly tilt the scales.

The High Court has since rejected attempts to reinstate the spending limits that had capped presidential campaign spending at Sh4.4 billion, while that for governorship, senatorial and woman representative seats had been capped on a county-by-county basis ranging from Sh21.9 million to Sh117.3 million.

Yet these concerns are not without basis.

Dirty money

Once affluent neighbourhoods in Nairobi are no longer respectable, neither are they secure. Their glory is slowly fading, thanks to transnational organised fraud where some of those involved are from other African countries.

Popular neighbourhoods such as Kilimani, Kileleshwa, Riverside Drive, and Westlands — home to upper middle-class Kenyans — have now turned into safe havens for the purveyors of dirty money.

Over time, the upmarket estates have become home to drug dealers, high-end fraudsters targeting foreign businessmen, dealers in illegal guns, fake currency, murder, and forgery, among other crimes.

The posh estates have also become the hub of fake gold merchants, money launderers and investment fraud alias ‘wash-wash’.

Read: Congolese in Sh105m gold scam detained

Nairobi is also becoming a transit point of illicit money (proceeds of crime) and a global hotspot for money laundering, if one considers the recent court cases.

The players in the con game and criminal enterprise are ‘flamboyant businessmen’ with flashy offices in the uptown areas, furnished with real or fake gold-plated chairs and tables, and fitted with CCTV cameras. They also drive around in the latest top-of-the-range vehicles.

Cases of fake gold syndicates, fraudulent government tenders and gun dramas abound in the posh pre-independence suburbs established in the 1950s.

The fraudsters – who fancy gold jewellery – can hardly be suspected of being scammers since they heavily invest in their appearances by donning the latest designer clothes and shoes.

The neighbourhoods loved by the fraudsters are dotted with high-end clubs and bars. Top politicians, tenderpreneurs and top businessmen are some of the people who frequent the clubs.

In the past three years, detectives have arrested close to 20 suspects over investment fraud (wash-wash) and fake gold merchants, however, their court cases have hardly moved beyond the primary prosecution stage. Cumulatively, the pending court cases have a value of more than Sh1 billion.

Among the prominent criminal cases opened in court involving fake gold, prosecutors have only been able to secure the conviction of Kevin Obia. In August 2021, he was ordered to pay a fine of Sh300,000 or serve a year in jail in default.

A magistrate’s court in Milimani found him guilty of attempting to defraud Austrian national Christian Gallati of Sh15.7 million on the pretence that he was in a position to sell him seven kilos of gold.

He attempted to obtain €127,000 (Sh15.7 million at current exchange rate) from Mr Gallati at the Hilton Hotel, Nairobi, on May 1, 2015 by falsely pretending he was in a position to sell him the gold.

Read: Inside the shady world of bold, fake gold fraudsters

The scams involve demands of hefty upfront payments to facilitate the processing of export and shipment documents with relevant authorities, after which no export is done because the consignment turns out to be either non-existent, or is fake gold.

Victims of the fraud are unsuspecting Kenyans and foreign nationals. The criminals use false mineral dealers’ licences, export permits and assay reports purportedly issued by the government.

The Directorate of Criminal Investigations (DCI) discovered that the fake gold merchants were using Jomo Kenyatta International Airport (JKIA) to defraud unsuspecting foreigners.

The DCI said the fake merchants had settled on one of the international freight companies since it provides ground and cargo handling services in major airports across the world.

In September last year, an investor based in India was conned of Sh178 million in a fake gold scam by a Kenyan named Hezbon Nyabola, who had styled himself as a gold dealer.

The gold was to be shipped from Guinea Bissau through Kigali, before being loaded on a plane to India via JKIA. It was to be shipped by a Mr Cavalho Lopes, a national of Guinea Bissau, who had received Sh178 million ($1,780,000) from the complainant in exchange for 44.45 kilos of gold.

Regarding illicit money being shipped through JKIA, in February 2022, KRA customs officials arrested a Kenyan travelling from Burundi with Sh238 million in foreign currency.

The money has since been forfeited to the state pending determination of the case in which the traveller, Mr Andrew Kipkemboi, is defending its legitimacy.

Earlier in January 2022, KRA officials arrested a Bahraini national with Sh110 million at the JKIA in a suspected money laundering plot.

The money was seized from a male passenger identified as Khalid Jameel Saeed, who was intending to take a flight to Bahrain on an Egyptian airline.

In the shady deals of fake currencies, among those arrested is flashy “businessman” Steve Mark Oduk. He was arrested in September 2019 after police stormed a club in Kilimani, Nairobi, and seized fake US$1 million and 147 fake gold bars.

The most infamous fake dollar racket involved a sum of Sh32 billion found in a house in Ruiru in February 2019 by detectives from Kenya’s Special Crimes Prevention Unit. The money had been stacked in at least 20 metal trunks.

Three suspects — a couple and their female business associate — were arrested in connection with the huge cache of fake currencies, foreign and local.

Two years later, in April 2021, another cache of Sh750 million in fake currencies was found in Kilimani. The DCI arrested Mr Samuel Maina and Mr Boniface Mungai at their home at Makaazi Apartments around 1am, following a tip off from the public.

Counterfeit money

Also seized were several metal boxes and safes containing counterfeit money, machines and assorted documents and badges branded ‘De La Rue’ – the firm that has contracts to print currencies of several countries – and United Nations and National Treasury stickers.

Police also found containers with an unknown liquid, KRA reflector jackets, seals, and stamps for various institutions, among other items.

In November 2019, investigators also seized Sh19 million in fake US dollars in a residential house in Kilimani, after an operation on fake diamonds.

The fraud masters went to new levels in February 2019, when seven suspects allegedly mimicked President Kenyatta’s voice to defraud a prominent businessman of Sh10 million. Mr Joseph Waswa, Mr Duncan Muchai, Mr Issack Wanyonyi, Mr William Simiyu, Mr David Kikuyu, Mr Gilbert Kirunja and Mr Antony Wafula called tyre firm Sameer Africa’s boss Naushad Merali and his finance director Akif Butt pretending to be the president and asking to sell them land.

One of the suspected fraudsters impersonated Mr Kenyatta, while the others arrived in fancy vehicles and suits to collect the money.

Read: Suspect faces Sh200m fake gold scam charges

The latest gold fraud case involves three foreign nationals —Congolese, Ukrainian and Japanese. The Congolese national, Andre Kongolo Tshikunga, is suspected of conning a Ukrainian national, Kovalenko Hennadii, and Nashimoto Masaaki (Japanese) of Sh680 million in a fake gold deal.

In the case, Mr Tshikunga is accused of obtaining through pretences U$D1,059,000 from Mr Hennadii and US$5,772,717 (Sh577,271,700) from Mr Masaaki. Mr Tshikunga also holds Kenyan citizenship.

He reportedly claimed he was in a position to ship 250 kilogrammes of gold to them between January 2018 and November 2020.

Prosecutors said Mr Tshikunga is a perennial fraudster and has other pending cases. They said he had allegedly been conning unsuspecting people with the promise of supplying them with gold.

Another famous case involves businessman Paul Kobia and 13 others who lured an Italian businessman to a house on Riverside Drive in Nairobi to defraud him of Sh14 million in a fake gold deal.

In April 2019 in Kileleshwa, Mr Kobia and his co-accused were found in possession of fake gold nuggets, smelting pots, metal tongs, X-ray fluorescence and spectrometers.

The victim was allegedly defrauded after the suspects displayed metal boxes purportedly packed with gold bars.

The items were allegedly used by the accused to convince unsuspecting clients that they were dealers in gold.

The businessman, Mr Antonio Cianci, a director of Dubai-based Iron & Steel DMCC, which buys and sells gold, said he lost the money after the suspects claimed that they had pure gold available for sale.

The suspects were also charged with other counts such as obtaining money by false pretences, preparation to commit a felony and forging of stamps.

In December 2021, four Kenyans and one Cameroonian linked to a Sh35 million fake gold scam were arraigned at a Nairobi court for fraud. Mr Robert Kudi, Mr Robinson Gitau, Mr Livai Kombo, Ms Fatuma Mohammed and Ms Eva Kimotho had allegedly convinced the complainant that they dealt in gold and were in a position to sell him five kilos of the precious metal at Sh35 million.

The deal was thwarted by detectives attached to the Serious Crimes Unit of the DCI after the victim reported the fraud. Assorted metal bars that were to be passed off as gold were seized by the police.

In July 2021, an international rally driver lost Sh170.8 million to a Kenyan named Elvis Ouma Muga, alias Nick, who had pretended that he would sell him 500 kilogrammes of gold.

Mr Muga was accused of defrauding Mr Bernhard Ten Brinke, a Danish national and renowned rally ace, of $1,567,120. Mr Muga denied the charges in court and was released on bond pending trial.

Another pending case involves a Burundian businessman with Kenyan citizenship, Mr Samir Munyinyi, who was charged with defrauding a German of more than Sh54 million in a fake gold transaction.

He committed the offence between March 28 and April 12, 2018 at Wuyi Plaza on Galana Road in Kilimani, jointly with others not in court. He fraudulently obtained US$257,000 from Mertroglu Muhammet by pretending he could sell him 360 kilogrammes of gold. He was released on bond pending trial.

In another case, Mr Munyinyi, jointly with Congolese businessman Eric Amisi Bin Ramazani, was charged with obtaining from Mr Vladimir Borisenko US$202,404 by pretending that they were in a position to supply him with 100 kilogrammes of gold.

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