DCI probe Sh37m gold scam targeting US investor

Gold bars pile isolated on white background. Financial success, business investment and wealth concept. 3D illustration

Detectives from the Directorate of Criminal Investigations (DCI) are investigating a gold fraud scheme in which a United States national was allegedly defrauded of Sh37 million by suspects posing as legitimate gold dealers operating from Nairobi.

The probe follows a Wednesday raid by DCI officers on an apartment in Kilimani, Nairobi, which investigators said served as a safe house and the nerve centre of the scam.

During the operation, detectives recovered several safes believed to have been used to store items linked to the fraud.

At least five safes were flagged as key to the investigation, with two mini-safes already taken into DCI custody. From the two mini-safes, detectives recovered 5.35 kilogrammes of alleged gold, which the sleuths said had been presented to the victim as collateral for a larger gold consignment.

According to the DCI, the recovered gold was meant to secure a proposed purchase of 150 kilogrammes of gold that the victim intended to acquire from the suspects.

Investigators said the prime suspects, who are currently on the run, have a history of fraud and have previously been linked to similar cases.

The suspects are alleged to have used multiple fake identities to lure unsuspecting victims and are accused of defying police summons.

Those named as persons of interest include Kevin Otieno alias Sonko, Paul Chogo, Collins Ochieng Opande, and advocate Jacob Auma Okoth.

The advocate is alleged to have received the Shs.37 million from the victim through bank accounts registered in his law firm’s name. According to the DCI, the money was later withdrawn in cash and allegedly handed over to the other suspects.

Detectives are investigating the suspects for the offence of obtaining money by false pretence.

The victim, Dave White, a commodities trader based in the United States, said that he first came to Kenya on December 1 last year after being contacted by the suspects through their website.

“I had been solicited and approached through our website, which is international. They were proposing to sell non-manufactured precious metals, which we trade,” White said.

White said his company deals in commodities such as coffee and cocoa, and that Kenya had appeared to be a promising market, thus taking the deal.

“We like Kenya, and we think it is a great market. So we came with our eyes open and looking to do good business,” he said.

According to White, he and his colleagues carried out due diligence and entered into what he said was a proper contract with the suspects, including a collateral agreement meant to secure the initial funds advanced for the deal.

White said his company transferred funds from its bank account and that he personally witnessed what appeared to be a legitimate gold operation.

White described being taken to a heavily guarded compound where phones were confiscated, and armed guards conducted security checks.

He said he witnessed what he believed to be a gold smelting process involving 150 kilogrammes of gold in nugget form.

White identified Collins Ochieng Opande as the person running the shipping side of the operation, while Paul Chogo was the individual who primarily engaged him during negotiations.

White said two men wearing yellow vests and carrying clipboards claimed to be customs officials overseeing the smelting process.

According to White, the first batch of smelted gold, which was 1.35 kilogrammes, was presented as collateral for an initial 50-kilogramme purchase. The gold was placed in a jointly rented safety deposit box in Kilimani, Nairobi, on December 12.

“The way the deal worked was that we would do a joint collateral agreement, and when the money arrived, it would become the sole possession of my company,” he said.

After discussions with his colleagues, White agreed to expand the deal to the full 150 kilogrammes. He said an additional four kilogrammes of gold was later provided as further collateral.

However, White said concerns began to emerge when shipping arrangements repeatedly changed.

“After the money was sent, it was supposed to pay for shipping and insurance. They told us the export taxes were covered,” he said.

Problems started, he said, when the suspects claimed the gold could no longer be shipped as regular cargo and instead required a private jet.

“They said, ‘We can’t ship the cargo. We have to hire a jet.’ And they gave us a very big invoice for shipping, which I told them was not part of the deal,’” White said.

According to White, this was a red flag, and he promptly demanded a refund.

When he demanded his money back, White said the suspects proposed increasingly irregular shipping arrangements, including routing the consignment through different names, something that, according to him, he rejected.

White said the situation deteriorated further when the suspects claimed the gold had been moved to Uganda for export.

“He sent a video saying he was flying to Uganda and that the whole consignment had been sent there,” White said.

White said he travelled to Uganda with Paul Chogo, only to be told that they had arrived late, and customs offices were closed, and that the shipment had already departed.

“They abandoned me in Uganda and went their different ways,” he said.

From Uganda, White flew back to the United States before returning to Kenya on January 3 to pursue justice.

White said that he believed such scams are widespread and highly organised.

“It seems like it is an epidemic here. This was a very professional crew,” he said.

He said he believed many foreign investors fall victim because they become exhausted navigating unfamiliar legal systems.

“I can see how these guys are successful. Some people get worn out. They don’t know which way to go,” he said.