A lawyer and a gold dealer were Wednesday arraigned for allegedly defrauding an American businessman of Sh130 million in fake gold deal.
Lawyer Thomas Otieno Ngoe and businessman Nicholas Otieno Ndolo appeared before Kibera senior principal Magistrate Charles Mwaniki where the prosecution sought more days to detain them.
The police through inspector Alexander Makomah were asking for 14 days to detain them as they complete their investigations.
According to an affidavit signed by the investigating officer, the two were to sell gold valued at Sh16 billion to the American businessman.
“That after formal introductions, they agreed that the complainant would purchase 3,000kg of gold at $41,000 per kg totalling to $123,000,000,” read part of the affidavit.
This is the latest such gold scam to happen in a series in the country that have seen unsuspecting businessmen lose millions to the scammers.
It comes amid pleas from police to foreigners seeking to purchase gold from the country to get advice from their embassies and government offices.
The duo were released on Sh500,000 cash bail after the court ruled that the prosecution ground to hold them was not sufficient
“The prosecution did not tell the court that the respondents were flight risks, the basis of the application was based on the authenticity of the firearm licence, since the amount involved are huge, they are therefore released on Sh500,000 cash bail each and they will report to the investigating officer at the DCI Nairobi area specifically on April 3,” said Senior Principal Magistrate Charles Mwaniki.
The defence lawyers had told the court that their clients were not flight risks and urged that they be released on bond.
They downplayed the prosecution’s application and said that no evidence had been availed in court to ascertain that the respondents were flight risks
The two were arrested on March 14, 2023, in Kilimani area on suspicion of having committed an offence of conspiracy to commit felony contrary to section 393 of the Penal Code.
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 stated.
According to investigations, the businessman confirmed to have received the money and would then contact the complainant to witness the packaging of the gold in readiness for shipment to Dubai. He had arrived in Kenya for the deal.
“The complainant waited in vain for an appointment to witness the packaging which then prompted him to request for documentations in regard to the purchase of the said gold,” police said.
The complainant later realised that some of the documents such as the customs entry indicated on the declaration form dated March 8, 2023 was 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 respondent and that the whole amount has been transferred to other accounts.
Upon 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 2nd respondent.”
On learning that he was being sought, Ndolo surrendered himself at DCI headquarters where he was arrested for interrogation to establish his involvement in supposedly gold business that never was.
The police said investigations into the matter are not yet complete and they intend to recover the monies defrauded from the complainant and documents the accused used as instruments in committing offences, and subject them to necessary forensic analysis.
Police further plan to conduct identification parades for the complainant and other persons and subject the recovered firearm to forensic analysis. They will also seek to ascertain whether the lawyer is a licensed firearm holder, police said.
Police have urged embassies and high commissions to advice 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,” said DCI Mohamed Amin.
According to the officers, Kenyans and foreign nationals must ensure they conduct due diligence on the person(s) they intend to engage in the gold buying business.
Dozens of foreigners have in the past been arrested in Kenya and deported for being engaged in the fake gold deals.
Some of the Kenyans involved in the deals are also facing various charges.
