Ukrainian stuck in Nairobi after losing Sh945m to ‘fake’ gold syndicate

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Ukrainian stuck in Nairobi after losing Sh945m to ‘fake’ gold syndicate

Ukrainian stuck in Nairobi after losing Sh945m to 'fake' gold syndicate
Ukrainian businessman Hennadii Kovalenko. He has sought assistance from police after falling victim to fraudsters during a gold trading venture. PHOTO | COURTESY

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Ukrainian businessman Hennadii Kovalenko thought he had hit El Dorado three years ago when he travelled to East Africa in pursuit of what promised to be a lucrative gold trading venture.

He put together his savings, borrowed some more money, and travelled to Uganda to purchase what he believed was 350kg of gold from the Congo Democratic Republic at a knock-down price of $27,000 per kilo, coming to $9,459,000, or Sh945 million at a conservative exchange rate.

He had already secured a buyer for his gold with a Dubai processor, and expected to reap a windfall of up to $4 million (Sh400 million) after taking care of all expenses – including freight, commissions, warehousing and taxes.

El Dorado turned to a nightmare. Instead of picking up his fortune in Dubai, Mr Kovalenko is stuck in Nairobi desperately chasing after what turned out be Fool’s Gold, and staring at massive losses.

He is yet to come to terms with the fact that he is just another gullible ‘investor’ to have fallen victim to sophisticated fraudsters who have turned the region into a graveyard for fortune hunters.

POLICE RAID

The gold he believes he bought in Uganda and was then brought to Nairobi for transshipment to Dubai is nowhere to be found.

He gave the police details of the logistics company that received his cargo and promised to deliver it to Dubai, but instead it was only junior employees who were arrested and charged with attempted fraud, while the directors and managers remain at large.

Apart from the arrest of the three, a police raid at the offices of Afrisolutions Limited recovered what was described as fake gold.

But in a conversation with the Nation, the Ukrainian insisted that what was delivered from Uganda was his shipment of genuine gold, which he had personally tested at the Department of Mining laboratory in Nairobi and confirmed at 99 per cent purity. He has the certificates to prove it.

Mr Kovalenko’s plight has attracted the attention of the Ukrainian Embassy in Nairobi, which has twice this year written to the Ministry of Foreign Affairs seeking intervention.

INTERVENTION

The first letter was on March 21: “The Embassy of Ukraine in the Republic of Kenya presents its compliments to the Ministry of Foreign Affairs of the Republic of Kenya,” read the letter in the normal diplomatic tone, “and has the honour to kindly request the assistance in the objective and impartial consideration by the competent authorities of the case of CID/C/GEN/Comp/6.12/2019/54 of 16.01.2019, which has been opened according to the claim by Hennadii Kovalenko”.

A second letter in the same vein seeking an update was written in July.

Speaking to the Nation, Mr Kovalenko conceded that there had been some action since he raised his complaint with the police, first with the Directorate of Criminal Investigation office at the Kilimani Police Station in Nairobi, before the matter was escalated to Nairobi Area DCI headquarters.

His problem is that the wrong people were arrested. According to his statements, his gold had in January last year, on being flown in from Uganda, been entrusted to two men introduced to him as Mr Joseph Kimo and Mr Zeddy Otieno, director and operations manager respectively, of Afrisolutions Ltd.

SET-UP

Those arrested on April 5 during the police raid on Afrisolutions were Consolata Achieng Kwendete, Washington Libese and Enock Mungwana Okonda, described as a tea girl, a gardener and a caretaker.

They were charged with ‘others not before the court’ with intent to defraud, receiving in cash $1,059,000 from Mr Kovalenko by falsely pretending that they were in a position to sell to him gold.

Mr Kovalenko first went to Uganda in October 2016 in the company of a countryman, Anton Chsherbakov, who introduced him to a Congolese national, Jeannot Bokwete, who said he had 350kg of gold nuggets for sale.

He struck a deal to buy the gold, but would pay a partial amount, and then share profits with Mr Bokwete when the gold was sold in Dubai.

He says he paid about $2.5 million to Mr Bokwete and his Ugandan broker John Gatete, who represented Dam Gemstone Experts Ltd.

The money was to cover a down payment on the gold, as well as fees for airfreight, logistics and various licences, permits and certificates.

But after various aborted shipments and false promises, the gold shipment was instead flown to Nairobi instead of Dubai.

GOLD PURITY

The consignment was flown to Nairobi from Entebbe, Uganda, on January 18 last year by Mr Bokwete, citing logistical difficulties in flying it direct to the buyers in Dubai.

He introduced Mr Kovalenko to Mr Kimo and Mr Otienno of Afrisolutions Ltd, a company he said had experience and all the necessary licences to trade in and export gold.

The company was supposed to transport the gold to his Dubai customer, Emirates Gold Ltd of Ajman, United Arab Emirates.

He saw the consignment of 350 kilogrammes of gold in seven metal boxes of 50kg each brought to the Afrisolutions offices by two armoured security vans from Brinks Security Service, complete with armed police escort.

Mr Kovalenko says he opened the boxes and took random samples, which he took to the Ministry of Mining for testing, and it was confirmed to be genuine gold of 99 per cent purity.

He took elaborate steps of capturing on video the opening of the seven boxes and how he dipped his hand into each box of gold nuggets, mixed the contents and then came out with a small sample.

The samples from the seven boxes were then put through a small smelting furnace at the Afrisolutions office to make a small gold bar.

SAMPLES

The small bar is what he then took to the Ministry of Mining, where he again videotaped the exercise of weighing and putting the bar in a testing machine which produced a readout confirming the properties.

Two Assay certificates, one of April 16, 2018 for a gold nugget of 19.83 grammes and another of May 3 the same year for a gold bar of 493 grammes were issued by the Ministry of Petroleum and Mininng, signed by Mr Joram Katweo for the Director of Geological Services.

Contacted by the Nation and sent copies of the two certificates, Mr Kalweo confirmed that they were genuine documents issues by the ministry on testing the gold samples.

His confirmation however came with a caveat that the purity certificate is only specific to the gold samples presented for testing, and therefore cannot be taken to confirm purity of the entire 350kg consignment.

The first samples were taken on the same date that Mr Kovalenko and his partner, another Ukranian Vladimir Bodnarchuk, signed an agreement with Afrisolutions worth $591,325 (Sh59 million) for storage, documentation, insurance, taxes and permits, and delivery to the consignee in Dubai.

STORY OF DECEIT

The money was paid in two tranches, a wire transfer of $300,015.75 to the Afrisolutions account at Equity Bank on April 18.

The rest, Mr Kovalenko says, was paid in cash, and he has two receipts issued by Afrisolutions, one of $538,825 issued on April 28, 2018, and another of $52,500 issued on April 17.

The two Ukrainians thought that after fulfilling their part of the bargain, they could fly on to Dubai and relax while looking forward to a bounty in Dubai.

What unfolded after that was a story of deceit, evasions and constant demands for more cash that mirrored what they had earlier experienced in Uganda, and also replicated what other traders from Europe and the Middle East landing in Kenya to buy cut-price Congolese gold had gone through.

First, at the beginning of June, according to Mr Kovalenko’s statements recorded with the police, came demands for an additional $1 million to procure a new UN Certificate of County of Origin supposedly required by the Kenya Revenue Authority.

Mr Kovalenko and Mr Bodnarchuk flew back to Nairobi, where they were told the problem could be solved on payment of $300,000, after which it would take just three days to fly out the goods.

SUSPICIOUS DOCUMENT

The two Ukranians did not have the money immediately, Mr Kovelanko writes in his affidavit, and flew back home.

They came back in the middle of October, where they paid an additional $124,000 and signed an addendum to the original contract with Afrisolutions to reflect the new amount.

A few days letter, they went to the Afrisolutions office, where they met Mr Kimo in the company of a man who was introduced as a Kenya Revenue Authority official.

The man, whose name was not given, told them that their gold was ready for shipment, but they first had to sign a declaration he had brought with him.

They found the document very strange. It was not on Ministry of Petroleum and Mining or KRA letterhead, yet it was asking them to acknowledge the challenges involved in shipping the gold ‘now stuck at JKIA’.

They were supposed to declare that they ‘will not have any claims whatsoever regarding the formula, means, ways and strategy used to ship the gold nuggets from Nairobi’, and that once the gold was delivered, ‘We won’t have any claims to any authority either government, private company and individual’.

FAKE GOLD

They declined to sign, but soon after, their Congolese associate disappeared. The two Afrosolutions managers also became scarce.

It was not until January this year that they reported to police. A DCI officer at Kilimani Police Station took their statements and recorded statements from staff of Afrosolutions and Brinks Security.

The security company, says Mr Kovalenko, was keeping two packages of 40kg and 8kg while he had been made to believe that the rest of the gold was kept in a Customs Bonded warehouse at the JKIA.

He however insists that what was recovered from Brinks was not the gold he had had tested and personally put in safes, wrapped and affixed seals, but different packages which were described as fake gold.

He is staring at massive losses comprising all the money he paid in Uganda and what was paid in Nairobi; much of it borrowed from friends and associates in Ukraine who will be demanding their pound of flesh.

It seems he still cannot reconcile himself to the idea that there may not have been any genuine gold at all.

Lying somewhere, he believes, is 350kg of real gold that could have set him up for life.

By MACHARIA GAITHO

Source-nation.co.ke

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