An advocate of the High Court and a gold dealer were on Tuesday, April 4, 2023, charged before Milimani Law Courts with defrauding an American businessman Ksh132 million in a fake gold deal.
Lawyer Thomas Otieno Ngoe and businessman Nicholas Otieno Ndolo appeared before Senior Principal Magistrate Zainab Abdul and denied three charges of conspiracy to commit a felony, conspiracy to defraud $1 million (Ksh132,540,000) from American businessman Seth Adams Bernstein and forging an East Africa mineral export permit.
According to the prosecution, the two had agreed to sell gold valued at Ksh16 billion to the businessman, who is the complainant in the case.
The foreigner then paid Ksh132 million as customs fees for 3,000 kilograms of gold to be shipped from the country to Dubai.
In the first count, the charge sheet read that on diverse dates between February 3 and 11, 2023, through Equity Bank Yaya Center Branch in Kilimani, Nairobi county jointly with others not before the court, the duo conspired to commit a felony namely obtaining money by false pretences to wit $1 million the property of Bernstein.
In the second count, the duo were charged that on February 11 this year at the same bank with intent to defraud, obtained from Bernstein $1 million which was wired to Ndolo's Equity Bank account by falsely pretending that a firm known as DSI Mining and Minerals company limited was in a position to custom duties for 3,000 Kilograms of gold to be shipped from Kenya to Dubai a fact they knew to be false.
In the third count, Businessman Ndolo was charged that on May 16, 2022, at an unknown place within the Republic of Kenya with intent to defraud, without lawful authority or excuse forged a document namely mineral export permit number EAC/22/92709141705/2022, purporting it to be a genuine permit issued by East African Community Customs.
According to investigations conducted by detectives from the Directorate of Criminal Investigations (DCI), the amount obtained by the suspects was a downpayment in the Ksh16 billion deal.
“That after formal introductions, they agreed that the complainant would purchase 3,000kg of gold at USD41,000 Per kg totalling USD123,000,000,” Inspector Alexander Makoma told the court.
The two were arrested on March 14, 2023, in Kilimani area after the American lodged a complaint with the DCI.
The complainant told police he was introduced to Ndolo as a businessman dealing in gold business.
Ndolo then provided an account in a local bank account name Africorp Consultants Limited. According to police, the complainant later instructed his bank in the US to wire $1,000,000 on February 10, 2023, by way of a swift bank transfer into the account.
According to investigators, the businessman confirmed to have received the money and promised to contact the complainant to witness the packaging of the gold in readiness for shipment to Dubai.
At the time the businessman was in the country.
"The complainant waited in vain for an appointment to witness the packaging which then prompted him to request for documentation in regard to the purchase of the said gold,” Inspector Makoma told the court.
The complainant later realised that some of the documents such as the customs entry indicated on the declaration form dated March 8, 2023, were not genuine.
It was then that Ndolo started to avoid meeting the complainant and later started threatening him with deportation from Kenya.
This prompted the complainant to make a report at DCI Operations Support Unit, the report was then booked at Capitol Hill Police Station and upon investigations at Equity Bank where the money was wired, it was discovered that it is operated by the lawyer and that the whole amount had been transferred to other accounts.
Upon the arrest of the lawyer, a quick search was conducted and a firearm was recovered from the vehicle they were driving.
The recovered firearm is believed to have been used to commit crimes and is therefore subject for further forensic analysis as well as to establish how it was acquired by the Ngoe.
On learning that he was being sought, Ndolo surrendered himself at DCI headquarters where he was arrested for interrogation to establish his involvement in a supposedly gold business that never was.
Lenient bail terms
After denying the charges, the two accused persons through their lawyers urged the court to grant them reasonable bail terms, claiming they have been out on a cash bail of Ksh500,000 before Kibera Law Courts where they had been arraigned last month pending investigations by the police.
They asked the court to maintain the same bond terms, arguing that they were not a flight risk.
In his ruling, the magistrate ordered each of the accused persons to be released on a Ksh1 million bond or Ksh 500,000 cash bail.
This is the latest of a series of such gold scams that have seen unsuspecting businessmen lose millions to the scammers in recent years.
It comes amid pleas from police to foreigners seeking to purchase gold from the country to get advice from their embassies and government offices.
Police have urged embassies and high commissions to advise their nationals coming in for business, Kenya does not hold any huge consignments of gold
"The gold scam has now reached alarming levels as unsuspecting foreigners are being swindled large amounts of money by fraudsters,” DCI Mohamed Amin has stated.
According to the government, Kenyans and foreign nationals must ensure they conduct due diligence on the person(s) they intend to engage in the gold-buying business.
