How a ‘Gold Mafia’ is looting Southern Africa, washing dirty cash
An investigation by Al Jazeera has revealed some of Southern Africa’s largest gold-smuggling operations, exposing how these gangs help criminals around the world launder billions of dollars while aiding governments in circumventing international sanctions.
Gold Mafia, a four-part series by Al Jazeera’s Investigative Unit (I-Unit) based on dozens of undercover operations spanning three continents, and thousands of documents, also shows
how government officials and businesspeople are profiting off the illegal movement of gold across borders.
The investigation reveals how billions of dollars’ worth of gold is smuggled every month from Zimbabwe to Dubai, allowing criminals to whitewash dirty money through a web of shell companies, fake invoices and paid-off officials.
The investigation also shows how Zimbabwe President Emmerson Mnangagwa’s government is systematically using gold smugglers to get around the chokehold of Western sanctions imposed on the country. The money laundering and gold-smuggling schemes involve one of Zimbabwe’s most influential diplomats, and go all the way up to the president and his circle.
The smugglers include millionaires, one of whom was accused of almost bankrupting Kenya through a similar, corrupt scheme also involving gold.
Gold smuggling, money laundering
Posing as criminals from China looking to launder over $100mn, Al Jazeera’s undercover reporters managed to gain access to these smugglers and gangs.
Zimbabwe is a key player in these operations. Gold accounts for almost half — over $2bn — of the country’s exports. But the nation faces a strict international sanctions regime, and even though its gold trade is not in itself banned by the West, the broader strictures against Zimbabwe make it harder to export the precious metal through official channels.
However, using a web of companies and patronage from some of Zimbabwe’s most powerful individuals, smugglers have turned those constraints on trade into an opportunity to launder billions of dollars and help the government in Harare get around some of the consequences of sanctions.
The process is as simple as it is cunning: Criminals from around the world with large volumes of unaccounted cash can give that money to the Zimbabwe government, directly or through smugglers. The Zimbabwe government desperately needs US dollars since the county’s own currency has little international value following years of hyperinflation.
In exchange, launderers get clean, legitimate cash — from the sale of Zimbabwean gold — transferred to their bank accounts.
‘Good washing machine’
One of the smuggling operations the I-Unit encountered was led by Uebert Angel, Zimbabwe’s ambassador-at-large to Europe and the Americas. Angel was appointed personally by President Emmerson Mnangagwa with the responsibility of securing global investments for Zimbabwe, and is one of the country’s most influential diplomats.
Angel, who is also a prominent pastor, works with his deputy, Rikki Doolan. The duo made an offer to Al Jazeera’s undercover reporters that Angel could use his diplomatic cover to smuggle dirty money into Zimbabwe. That cash would then be used to purchase Zimbabwean gold with the help of Henrietta Rushwaya, president of the country’s mining association and a niece of Mnangagwa.
“It’s a good washing machine, right?” Doolan said, a smile on his face, while speaking with Al Jazeera reporters.
Angel and Doolan repeatedly claimed that the country’s president was on board with their plans. Angel had another laundering idea too: He proposed using the unaccounted money to build a hotel near Victoria Falls, a popular tourist attraction in Zimbabwe.
‘It’s very clean that way’
If access to power is the currency that Angel and Doolan peddled, gold is the calling card of a string of — at times rival — smuggling operations.
One of the gangs is run by Kamlesh Pattni, a businessman who in the 1990s was accused of pocketing hundreds of millions of dollars belonging to the Kenyan exchequer through a gold smuggling scheme. He was charged but never convicted. Al Jazeera’s undercover operation shows that Pattni is now involved in a similar scam in Zimbabwe, exporting gold to Dubai and then laundering both the money and the precious metal.
Pattni’s biggest competitor, a gold smuggler named Ewan Macmillan, also offered to help launder money for Al Jazeera’s reporters. Like Pattni, Macmillan, uses a group of couriers to transport hundreds of kilos of gold per week from Zimbabwe to Dubai, where it is then laundered through a web of companies and false invoices. Central to Macmillan’s operations is his business partner Alistair Mathias, who advises clients on how to cleanse their dirty cash.
Finally, Al Jazeera obtained details of how Simon Rudland, one of Zimbabwe’s richest men, launders money through both Zimbabwean and South African companies. Rudland is the owner of Gold Leaf Tobacco, one of southern Africa’s biggest cigarette brands, especially on South Africa’s black market.
These smuggling gangs have official licenses from Zimbabwe’s central bank that allow them to sell the country’s gold in Dubai, documents accessed by Al Jazeera show. They are expected to return the proceeds from those sales back to the central bank.
Instead, Pattni, Macmillan and Matthias have a well-oiled money laundering mechanism in place. They told Al Jazeera’s undercover reporters to set up shell companies in Dubai that would serve as a front for gold trade. The legitimate money earned from the sale of Zimbabwean gold in the emirate would be transferred to the bank accounts of these shell firms. And the smugglers would instead carry the dirty cash back with them to Harare, where they would deposit it with the central bank.
“So, it’s very clean that way,” said Mathias, Macmillan’s partner.
When asked about the findings of Al Jazeera’s investigations, Pattni said no allegation of criminal wrongdoing had been upheld against him in Kenya. He denied involvement in any kind of money laundering, as well as employing anyone to smuggle cash or offering to deal with funds he knew originated from illegal sources. He said that when he met with our undercover team, he thought he was meeting with an investor who wanted to sell a stake in hotel businesses and “to divest of a portfolio in China into gold buying and mining in Zimbabwe”.
Alistair Mathias denied that he designed mechanisms to launder money and said that he had never laundered money or traded illegal gold. He told us he had never had any working relationship with Ewan Macmillan.
Rudland told Al Jazeera that all allegations against him were false and formed part of a smear campaign by an unidentified third party. He described himself as “a strong businessman … competing against the greedy and the envious”. He denied any involvement in the sale of illicit cigarettes, in gold or other smuggling and in sanctions busting.
Gold Leaf Tobacco, Rudland’s company, said that it emphatically denied any involvement, past or present, in money laundering, the trade in illegal gold or related matters.
The Reserve Bank of Zimbabwe told us that it takes the issues of money laundering and illicit trade very seriously and will not participate, directly or indirectly, in such activities.
President Mnangagwa, Macmillan, Angel, Doolan, Rushwaya and other parties featured in this article did not respond to Al Jazeera’s inquiries.
Over the course of the coming weeks, the Gold Mafia series will reveal more on these characters, how they work and how they are using one of the world’s most-wanted commodities – gold – to enrich themselves, while impoverishing a nation.
Source: Thanks AlJazeera.com