Govt warns of fraudsters in fake gold scam

The government has warned of a scam involving fraudsters dealing in gold trade.

Rogue mineral dealers have been issuing certificates purportedly issued by the Ministry of Mining to show that their gold, which is mostly fake, has been tested and graded.

“The fraud is committed by persons passing with huge quantities of gold available at discounted prices" Cabinet Secretary Dan Kazungu said in an advert in the government publication MyGov on Tuesday

"Their victims have been unsuspecting Kenyans and foreign nationals,” Mr Kazungu said.

The criminals are using false mineral dealers’ licences, export permits and assay reports purported to have been issued by the ministry.

Other common fraud cases involve demands of hefty upfront payments to facilitate the processing of export documents with relevant authorities, after which no export is done or the consignment turns out to be fake gold.

Mr Kazungu observed there has been an increase in the number of cases involving gold trade.

READ: Dubai cartels linked to gold smuggling in Kenya

Listed companies

He listed Aurical Kenya Ltd as the only company licensed to carry out gold dealings in the country.

Modogashe Agencies Ltd and Match Electricals are the companies licensed to carry out mineral dealings other than gold.

“The international dimension to the fraud is giving Kenya a negative and unwelcome reputation in the world of minerals and mining,” Mr Kazungu.

In June, a businessman Jared Otieno was charged with obtaining more than Sh22 million from two international traders, pretending he would supply them with 50 kilogrammes of gold.

He was charged with obtaining $169,000 (Sh17,407,000) from Mustaq Hefeji Dawood and 40,500 euros (Sh4,657,500) from Mohammed Imad Mokdad by pretending that he was in a position to sell them gold.

He denied the charges and was released on a Sh3 million bond ahead of the hearing of the case tomorrow (September 29).