SA banks mired in Zim Gold Mafia money laundering scam
CRIMINAL gangs that have been smuggling Zimbabwe’s gold have also been using South African banks as part of their money laundering and externalisation scheme, prejudicing this country of millions of dollars through illicit financial flows.
This week, Al Jazeera international news channel broadcast episode 2 of a corruption-busting investigative docuseries showing how politically connected elites and international criminals have been cleaning dirty money through South African banks, and externalising it to offshore accounts in Dubai, and then using it to export gold from Zimbabwe.
The gold has over the years been smuggled out of the country through a well-knit syndicate involving officials from Zimbabwe’s Civil Aviation Authority (CAAZ), a diplomat and the Zimbabwe Miners’ Federation (ZMF) as has been shown in the first episode of the Al Jazeera docuseries.
The racket has also included several people, all of them linked to President Emmerson Mnangagwa, including Ambassador-at-Large Uebert Angel and ZMF president Henrietta Rushwaya, among others.
Findings of the news channel’s investigative unit show that criminal gangs have been legitimising money laundered through gold exports and front men, who wash the dollars through initiatives such as the Advance Payment Scheme.
Using the scheme, smugglers have been externalising money undetected by South Africa’s central bank, with the transactions being declared as advance payments for imported goods by South Africa’s business community.
The racket has allegedly been used by Gold Leaf Tobacco founder Simon Rudland, who has been mired in underworld gold smuggling and money laundering activities in Zimbabwe, unearthed by Al Jazeera’s investigation.
Gold Leaf Tobacco, for instance, has allegedly been washing money earned through the sale of illicit cigarettes, externalising it to the UAE through PKSA, a shadowy company owned by Mohammed Khan, notorious for externalising money, according to former mafia member Dawood Khan.
The money is then used to buy gold from Zimbabwe’s Fidelity Printers and Refiners, the country’s largest gold buyer. Zimbabwean gold dealer Ewan MacMillan, also implicated in the smuggling, said Rudland has a separate arrangement and bankrolls the country.
Some of the gold is sold to Rudland’s company, Aulion Global Trading, in Dubai. It is from these proceeds that 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$200 milliin, US$250 million. That is huge,” MacMillan says.
Moses Nango, a South African Airways customer service agent, who says he has helped to move money, diamonds and gold out of the country, says Rudland’s couriers pick gold at Fidelity Printers and are escorted to the airport.
To cover the tracks of dubious transactions from Rudland’s South African base, to his offshore company, Aulion in Dubai, PKSA has been disguising the money as loans which the company will pay back.
Findings also show that PKSA has been using South Africa’s ABSA Bank, forging papers to suppose that the money will be paid back into PKSA’s bank account.
Through the scheme, smugglers and financial criminals have successfully by-passed security checks by South Africa’s Reserve Bank by insinuating that transactions made to offshore accounts are payments made abroad on behalf of South African businesses.
PKSA’s Mohammed Khan has been able to evade the law by opening several shoddy companies using stolen and lost identity documents.
The massive transfers are then described to South Africa’s central bank — which monitors the transactions — as advance payment for goods to be imported. The goods are never imported to South Africa, creating a safe passageway for dirty money to offshore accounts, before it is cleaned by importing gold from Zimbabwe.
“When the money is abroad, it is equals to advance payment, which is a particular reporting you can use to the Reserve Bank. Every transaction abroad has be reported to the Reserve Bank and you have to give them a reason why you are moving the money abroad,” said Paul Holden, a financial crime analyst.
Documents obtained by Al Jazeera, including contracts, emails and ledgers, show how Khan has been using fake invoices and identities to transfer money to companies abroad, which are also owned by Rudland’s partners.
Some of the companies include Vantage Leaf in Mauritius, Velmont Valley in Switzerland and Liberty Gold in the United States of America.
The findings also showed that officers at South Africa’s Standard Bank, ABSA and Sasfin Bank have been on Khan’s payroll. These officers would remove evidence of dubious money transfers from PKSA, also deleting evidence from computer systems, while getting money from Khan.
While gold barons exposed in the Al Jazeera investigation for smuggling, corruption and money laundering generating billions of dollars for self-aggrandisement have been using Western sanctions on Zimbabwe as a scapegoat, the country’s central bank has not been under sanctions.
Some of the gold dealers, Kamlesh Pattni, Ewan MacMillan and Henrietta Rushwaya for instance, claim they were engaged in smuggling activities to help tackle sanctions and assist the government, yet Zimbabwe is not under a trade embargo and can openly sell its mineral exports, including bullion.
In Zimbabwe’s case, the country has been able to trade with any other country and export whatever it produces, including gold. As a result, claims by the gold barons that they are smuggling to help the country are untrue.
Reserve Bank of Zimbabwe governor John Mangudya highlighted that point when he sought to distance the central bank from the smuggling and corruption activities of the gold dealers. One gold baron claimed Mangudya is on Rudland’s speed dial.