The tip-off led intelligence agents to an US jet loaded with half a tonne of gold, a Houston diamond merchant and a car chase that produced $6,8-million.
But since the February 5 bust on gold smuggling in the Democratic Republic of Congo, more than $5-million and 90kg of the gold have disappeared, according to official and banking sources who would not speak on the record for fear of reprisals.
The latest report about alleged gold smuggling stands out only because it has been made public, because of the huge amounts of gold and money involved, and because foreigners are being held. DRC’s Ministry of Mines estimates that about 80% of the country’s mineral production is smuggled out of the country, on planes, by road and by barge.
On Friday, the leaders of DRC and Kenya met to announce a joint investigation into mineral smuggling, which thrives despite a recent ban in DRC on mineral exploitation and trade in three eastern provinces. The danger is very real: A customs officer in Kenya was gunned down in what his family is calling a crime related to his investigation of smuggled gold from DRC.
DRC’s government says it has detained American Edward “Carlos” St Mary, a diamond merchant from a Houston society family; Nigerian Mickey Lawal, half brother of Nigerian-born Houston oil tycoon Kase Lawal; French businessman Franck Stephane M’Bemba; Nigerian businessman Alexander Adeola Ehinmola and three American crew members.
All are being held on suspicion of gold smuggling, under guard at the Hotel Ihusi in Goma and not allowed to receive phone calls. Under Congolese law, if a person is suspected of a crime that carries a sentence of more than six months, they can be held for up to 112 days without charge.
Wild West
Kenyan lawyer Punit Vadgama says his client, St Mary, is the victim of an elaborate con and never intended to do anything illegal. It is not known if the other detainees have lawyers acting for them.
Eastern DRC in many ways resembles the old Wild West of the United States — only wilder, and much more dangerous.
Tribal tensions exploded after French troops allowed Rwandan genocide perpetrators to escape across the border in 1994. Tribal conflict segued into a civil war that soon ballooned into what some call Africa’s World War — armies from eight African nations and 25 local militias and foreign rebel groups fought above all for control of DRC’s massive mineral reserves. Millions died.
The foreign troops withdrew after an internationally brokered peace agreement in 2003. But the leaders and generals of some countries had been given questionable mining rights in DRC during the war, in exchange for their troops, and still are involved in some deals.
Mining in east DRC fuels the conflict, paying for arms and making many commanders reluctant to give up a lucrative source of income.
DRC’s east, a vast and stunningly beautiful terrain of lush mountains and forested and swampy plains, remains a frontierland subject to no man’s law. Rebels from neighbouring Rwanda, Burundi and Uganda continue to fight, along with local militias and a national army. All these armed groups are involved in mining, from fighters who do the digging themselves, to those who force captured civilians to do it for them, to those who take a cut from artisanal miners.
The latest scandal started in the United States with a man identified only as David offering to sell bars of gold, according to a lawyer in the Kenyan capital, Nairobi.
In a letter appealing for intervention from DRC’s president, lawyer Punit Vadgama says his client, St Mary, and longtime family friend Mickey Lawal headed to Africa in December to pursue the gold deal.
The lawyer lays out the story as follows.
First sign of trouble
In Nairobi, the Americans met a man calling himself Michel Malongo, who produced an alleged export certificate in his name. They asked him to have the gold brought to Kenya for export. The origin of the gold is never divulged.
The Americans ordered an advance payment by electronic bank transfer, then cancelled the transfer “as the product was not ready for viewing”.
Finally, Malongo showed the Americans the gold, and took them to a smelter where the bars were turned into ingots weighing a total of 475kg. That’s worth about $23-million at current market prices.
The gold was smelted — it’s unclear why — in the presence of a man who identified himself as a Kenyan customs official and showed an identity card. The Americans inserted pieces of papers with their signatures signifying acceptance of the deal into each box carrying the ingots, which were then transported to an alleged bonded warehouse.
The Americans tried to charter a plane to carry the goods, but had difficulty because of the busy Christmas holiday season.
Then came the first sign of trouble: “When they [the Americans] tried to get in touch with Michelle [sic], they could not get hold of him and began to suspect that he may have been a fraudster who had stolen the commodity and their money,” the lawyer’s letter says. Neither Malongo nor the customs officer answered their telephones.
The Americans went to the Kenya Revenue Authority and to the Commissioner of Customs, who informed them that no gold refinery exists in Kenya and that they had been conned. They reported the matter to Kenyan police in January.
Later that month, they got a phone call from Malongo, who said the gold had been moved to neighbouring Uganda and that they should come collect it. St Mary refused. Malongo contacted them again to say the gold was now in Goma, in east DRC, where they would have to collect it and pay the balance or lose their money.
The Americans flew to Goma, aboard a private jet leased by Kase Lawal’s Camac company. The plane remains impounded at Goma airport.
The Americans paid the balance of the purchase price to Malongo and a few associates, and the gold was loaded on the aircraft, the lawyer says he learned in a phone call from St Mary.
Then came the arrests. Military intelligence agents turned up at Goma airport, where the gold was on the plane. A car chase, involving the agents and soldiers, found $6,8-million in the car — presumed to be the balance in payment for the gold.
DRC’s information minister Lambert Mende says soldiers are being investigated in the case. An army general reportedly among those being investigated, former rebel commander Bosco Ntaganda, told the Associated Press that his officers were involved in the car chase to stop suspects. He denied reports that the millions were intended for him.
It’s not clear where, or who, Malongo is, or if any Congolese have been arrested in the case.
After the detentions, the lawyer says, St Mary was concerned about the safety of the gold. Authorities took them to what they called the central bank, where the gold and money were deposited on February 6. Vadgama says in the last communication he was able to have with his client, St Mary told him that he had signed for the gold and got a receipt.
But the gold has already started to disappear. Mende, the information minister, said only 849 pounds (385kg of gold was confiscated from the plane — 90 kg less than St Mary told his lawyer had been received. And now, banking sources and officials say that of the $6,8-million at the bank, only a little over a million remains.
The rest is assumed to have been taken by soldiers involved in the deal, they say. – Sapa-AP