Gold Mafia turning Zim into smugglers’ paradise

THE first part of the Al Jazeera Investigative Unit’s four-part Gold Mafia series has named Zimbabwe’s biggest players in gold smuggling and money laundering syndicates, with the Reserve Bank of Zimbabwe’s subsidiary Fidelity Printers and Refiners.

OWEN GAGARE

Undercover reporters posed as gangsters with about a US$1 billion black money that needs to be washed. They approached rival players on the shady gold market who promptly offered to launder the money, explaining elaborately how they would do so in the process.

Kamlesh Pattni

 Kenyan national Pattni is one of Africa’s most notorious gold dealers. He calls himself Brother Paul and boasts of extensive contacts on the continent, including heads of state. He is among the dealers exposed through the investigation.

By his own confession, he moves between US$20 million and US$50 million a week. Pattni has operations in Dubai and several African countries, inclusing Zimbabwe, Zambia, Democratic Republic of Congo, Kenya, Tanzania and Uganda.

He fled Kenya after former President Daniel Arap Moi left power in 2002, after which he was arrested for corruption when the opposition came into power.

Pattni is recorded boasting about how he met Moi as a young man, through the country’s intelligence director and eventually became one of his advisers. He was granted an exclusive gold-exporting licence which saw him making over US$600 million, which he shared with the former Kenyan leader and those close to him.

After being set free by the courts, Pattni moved to Zimbabwe where he has been cutting mouth-watering deals with the country’s leaders, including buying and exporting gold mainly to Dubai, in return for a handsome commission of 18% of proceeds from exported gold. He has all the required paperwork, which makes it easy to launder money, most of which he keeps in Dubai. “Dubai is the headquarters.

Dubai is the centre of Africa; a banking centre, financial centre, it’s tax free,” he tells undercover reporters.

“We have our own licence clearing at Dubai airport. We have permission of the Central Bank of Dubai. We have permission of the Reserve Bank (of Zimbabwe). We have the money laundering clearing certificates. We will show you all that, we will show you.”

 Pattni and other dealers have taken advantage of the RBZ’s lack of hard currency, to buy gold from small-scale miners. In return, they are given licences to sell gold abroad. The competing mafias fly the gold to Dubai and sell it there.

 They then bring the proceeds back to Zimbabwe in US dollars cash but have taken advantage of the system to launder money. One of Pattni’s couriers is Dymtro Abakumov, who owns Suzan General Trading.

He has RBZ authority to move US$3 million into Zimbabwe a week and generated US$168 million in 2020. The government pays an 18% bonus on the proceeds of his exports. The documentary reveals that Pattni and his courier declare their money on arrival at the airport. They however declare less money. In some cases, they bring in as little as US$50 000 or US$100 000 after selling gold worth up to US$2 million.

They then bribe custom officials to confirm they have brought the right amount of money. In one case, Pattni’s former accountant re veals that the dealer brought in US$99 850 after selling gold worth US$1.2 million.

To fund his gold buying, he then collects money from the Hawala market, where Zimbabwean-based clients who want to move money to Dubai give him hard cash. He then uses the money to buy gold and sells it in Dubai before paying the clients with proceeds from the sale, in Dubai. “The hard cash doesn’t enter the country.

He is not bringing any forex, but taking money out,” says his former accountant. Pattni however denied criminal wrongdoing in Kenya and emphasised that he had never been convicted in relation to his activities in that country.

He denied involvement in any kind of money laundering or sanctions busting, as well as employing anyone to smuggle cash or offering to deal with funds he knew originated from illegal sources. He said when he met the undercover team, he thought he was meeting with an investor to whom he wanted to sell a stake in hotel businesses and who wanted to “divest a portfolio in China into gold buying and mining in Zimbabwe”.

Abakumov denied being employed by Pattni or engaging in any criminal activity whether himself or through his company Sukros Investments. Everything he and his company did was in strict compliance with the terms of its licences and all applicable laws. Suzan General Trading said its operations were legal and above board in all respects.

Ewan MacMillan

 MacMillan is another big player, moving 200kgs of gold per month. He boldly declares: “I am number two in gold” to undercover reporters, before naming Pastor Paul (Pattni) as the number one player.

“He is just a thief. He almost put Kenya into liquidation, that’s how big he is,” says MacMillan, also known as “Mr Gold”. He boasts about being jailed over gold-related offences. “I went to jail first time for gold when I was 21, and then I went to do a lot of prison in the ’90s,” MacMillan says.

 MacMillan says gold trading offers unrivalled opportunities to clean money.

“There is an opportunity, a hell of a big opportunity to wash money here. You can wash money. You want US dollars in a bank account, which would be better to have a bank account in Dubai, US dollars. So, then the best thing is to meet my partner from Dubai, and he knows how we do things here. And then, he can help you with how you can bring the money here, no problem. I can give my partner gold in Dubai and he can pay you anywhere in the world and I need him to come up with a plan of how we can wash your money…and he is clever, he washes money for the Russians.” MacMillan told reporters he was approached by the RBZ to buy gold as part of measures to stop leakages.

“They said to me, go out and get all the gold out that’s being smuggled out of the country,” he said. “When a person comes to sell me gold, I don’t have to write his name down. I don’t have to do anything. I just take his gold, pay him, he leaves. I deliver to the government. Government asks me no questions.”

Macmillan has operations in Zambia, South Africa, Angola and Mozambique. Among his team members is Alistar Mathias, a gold trader and financial architect who builds money laundering schemes for corrupt politicians. He says he has done the job for the past 14 years. Mathias offers to launder money through his gold-trading network across Africa.

“In Ghana I do one tonne. I do US$40 million every month out of Ghana. This region (Sadc), I do 500 to a tonne again. So, I do roughly US$70 to 80 million every month. We can export from Zambia, I can export from South Africa. We have a company in Zambia, Angola, Mozambique. We can export from anywhere.”

Mathias advises a reporter posing as a Chinese gangster, Mr Stanley, to set up a gold-trading company and bank account in Dubai. He tells him to get a licence to import gold into the UAE.

“We are gonna tell the bank we are gonna be trading in commodities or gold. The money will come to that account all the time. They place clean money from the official sale of gold into Mr Stanley’s account. You show that it’s imported legally. You show that you have sold it to a refinery and the money got paid in the bank account. It’s very clean that way,” Mathias says.

MacaMillan adds: “And now you have access to that money. That’s your money. And you gonna give us the US dollars cash from Hong Kong, we gonna come back with that.”

Under the scheme, Mr Stanley’s dirty money is then brought to Zimbabwe and declared as proceeds of gold sales, yet the proceeds of Zimbabwean gold are deposited into his Dubai account, making the money clean.

The dirty money is then cleaned by buying gold from Zimbabwe, as part of a cycle.

“The only illegal thing is that you are giv ing me the US dollars out of Hong Kong. But they don’t know that,” declared MacMillan.

Mathias however denied that he designed mechanisms to launder money and said that he had not laundered money, or traded illegal gold for Russian clients or anyone else. He told Al Jazeera that he never had any working relationship with MacMillan.

Simon Rudland MacMillan says Rudland, known as “The Boss”, has a separate arrangement and bankrolls the country. He operates through his company Gold Leaf Tobacco.

He exports more gold than MacMillan and Pattni and has a contract to sell gold abroad on behalf of Fidelity Printers and Refiners.

Moses Nango, a South African Airways customer service agent, who says he has helped to move money, diamonds, gold out of the country, says Rudland’s couriers pick gold at Fidelity Printers and are escorted to the airport.

Their bags are exempted from searches. The couriers fly out on Emirates EK714 business or first class and fly back on the same flight EK713.

They are all white. His couriers include Keith Patrick, who made 13 trips in two months during part of the investigation, Talmage George Alexander (seven times in the same period); Terrance Ian Smith (nine trips), Johannes Swann Jnr and Johannes Swann Snr who appear 10 times and Peter Bowan, who also travels 10 times.

“When they get here to Harare, they go outside by the arrival exit, hand over the cash, get another consignment and get on the same fight going back again,” Nango said.

 Some of the gold is sold to Rudland’s company, Aulion Global Trading, in Dubai. MacMillan says Rudland lends the government money to buy gold.

“He gives Fidelity the money to buy the gold for him to export. Fidelity’s debt to him at one time is US$200m, 250 million. That is huge,” he says.

Rudland however denied the allegations against him, saying they were “false and formed part of a smear campaign against him by an unidentified third party”.

 He described himself as “a strong businessman . . . competing against the greedy and envious”. Gold Leaf Tobacco emphatically denied any involvement, past or present, in money laundering, the trade in illegal gold, or related matters.

Fidelity Printers

Fidelity Printers and Refiners denied having any business relationship with Simon Rudland or giving gold-exporting licences or incentives to those we identified. It also denied all involvement in money laundering, smuggling, and sanctions busting.

 The Reserve Bank of Zimbabwe said it takes the issues of money laundering and illicit trade very seriously and will not participate, directly and indirectly, in such activities.