A fake gold syndicate scandal is putting Kenya on the international map as a black market with the potential of hurting legal businesses and diplomatic relations.
Currently, the ruler of Dubai, Sheikh Mohammed Al-Makhtoum, sent an official protest note to the Kenyan government demanding the release of a gold consignment held by customs in Nairobi.
The said letter was allegedly sent after reports emerged Kenyan custom officials were holding at Jomo Kenyatta International Airport (JKIA) gold consignment belonging to Ali Zandi, owner of Dubai-based gold trading company, Zlivia, which has connections with Saudi royal family.
According to the Africa Report magazine and other regional and international news outlets, Zandi had entered into a deal with flamboyant Kenyan businessman and politician Zaheer Jhanda who assured him he could source gold from Democratic Republic of Congo (DRC) and deliver it to him in Dubai but has since failed to deliver.
A video linked to the case, which includes newspapers marked 16 March 2019 and shows different metal cases filled with gold nuggets, was also leaked online.
The case involving Sheikh al-Makhtoum’s associate is just the most recent case of foreign nationals who have been scammed in gold deals in Kenya and Uganda.
In the past few months, more than 40 suspected gold scammers have been arrested in Nairobi alone. Other than Kenyans, those arrested include Bulgarians, Tanzanians, Rwandans, Nigerians and Congolese. Another link among them has been a tendency to live in Kilimani, an upmarket part of Nairobi.
In one case in Nairobi, a Russian national was scammed out of more than ksh 20 million. Uganda is prosecuting a similar case where South Sudanese national is accused of swindling $ 198,000) from to Ethiopians.
Crackdowns by criminal investigators in Nairobi since last year have netted gold nuggets, fake gold and different fake currencies.
Gold scammers are to Nairobi what Yahoo Yahoo boys are to West Africa. They are mostly young men who live large and chronicle their exploits on Instagram. In Kenya, they leverage their money to build political clout, which goes a long way into helping them get out of trouble.
The primary ‘person of interest’ in the UAE case is a young politician named Zaheer Jhanda.
Like many other suspected gold scammers, Jhanda created a high-profile public persona that involves vast amounts of money, political contacts and political ambitions. He unsuccessfully ran for a parliamentary seat in 2013 and 2017.
Another person of interest, Jared Otieno, was arrested on Thursday. The police made a point of noting that they had also towed away a Porsche and a new Bentley from a home he had recently bought for cash.
The crackdown on gold cartels in Nairobi brings into focus how attempts to clean the trade in conflict minerals are failing. The amounts involved also suggest Kenya’s financial system is still a conduit for extensive money laundering
#FraudAlert!!🚨 #DCI attention has been drawn to an upsurge in criminal cases involving the procurement & sale of #Gold in the country.
The Gold Scam has now reached alarming levels as unsuspecting foreign nationals are being swindled large amounts of money by the Fraudsters.
— DCI KENYA (@DCI_Kenya) May 9, 2019
The high-profile gold racket does not seem like it will harm Kenya’s relations with the much UAE, but President Uhuru Kenyatta will have to show his Emirati counterpart that he is going after the scammers.