Organised scammers in different parts of the world have infiltrated the social media and other forms of online meeting platforms where genuine and unsuspecting gold dealers exist.
To lure victims, the fraudsters or their agents post photos or videos of gold nuggets.
Once interest is shown, contact is immediately made, and the “deal” process starts with the suppose buyers travelling to Kenya or sending their agents or representatives on tourist visas.
On arrival, the buyers are booked into high-end hotels of their choice and lavished with a luxurious stay.
“The invitation on tourist visas is a deliberate move since once the victims are scammed, the same is used against them when they are threatened with being reported to the Immigration officials and possibly being charged for doing business in Kenya without a work permit,” explained a detective involved in the investigations.
Once at the hotel, meetings are arranged. The gold owner is often from Congo in a trick to authenticate the origin. The seller is usually a representative of the small-scale gold mining groups locally.
Alternatively, the buyer is convinced that the gold has been smuggled into Kenya where it is easier to beat the system by authenticating papers for the precious mineral.
After the price of the consignment is agreed upon, a Kenyan shipping agent(s) are introduced for logistics.
At this stage, the “owner” takes a low-key role, leaving the logistics agent in control. Such meetings are normally held in leafy suburbs of Runda, Karen, Gigiri, Spring Valley, Lavington, Kileleshwa or Kilimani.
“At these locations, the victims are duped that the gold consignment being high-value cargo must at all times be under the escort of Customs officials as it's transported for testing and assaying,” says an investigator.
Fake security during testing, according to DCI, comprises rogue police officers and private bodyguards, all armed.
“Gold is smelted in the presence of the victims and some victims have taken videos of this process while others were not able because they we asked to keep away their phones, wrist watches and any other equipment thought to have ability to record,” discloses the detective.
The victims are the made to believe the "consignment" is then returned to the Customs warehouse as modalities on payments are agreed.
Whereas at the beginning the victim is made to believe the deal would be completely on cost, insurance and freight (CIF) basis, an obstacle is introduced once testing is done. The agent starts demanding for logistical fees inclusive of government royalties.
At this stage, the unsuspecting victim is further assured that they would be provided with collateral, which basically is genuine gold, at a security company of the victim’s choice and in return, the victim should take care of the said costs.
The buyer is then taken before a lawyer to draft the agreement, detailing how the collateral would be processed in the event the seller or agent does not fulfil his obligation.
“The parties also enter into a sales and purchase agreement, and this is when the alleged seller demands that the entire purchase price or the logistical fees be placed into an escrow account held by a law firm in Kenya,” says an investigator.
But as soon as the money hits the lawyer’s account, the narrative changes. The seller comes up with all manner of excuses, introducing hurdles that require money to unlock.
In some instances, victims are asked to hire a private jet to airlift the cargo.
“From our investigations, over 90 per cent of these payments received by the concerned law firms are withdrawn in cash either the same day or within the same week putting a stop to the money trail," explains the detective.
“The money trail therefore ends with the lawyer, raising serious questions in the integrity of individuals in our banking sector and whether the concerned banks adhere to the regulations stipulated under the Prevention of Crime and Anti-Money Laundering Act that requires them to flag and report such instances to the Financial Reporting Centre.”
Recent trends show victims are instructed to make payments through cryptocurrency wallets and the informal Hawala system, making it difficult to trace the money trail because of lack of substantive law to address their regulations.
In the end, no cold consignment is ever shipped.
