- Gold scams in the country have been reported in the recent past days
- The victims are mostly foreigners who come into the country with the hope of making a killing
- Fake gold is priced so lowly to lure the buyers who end up getting conned
- Nairobi has been singled out as major outlet for fake gold given its placement as commercial hub linking the gold rich republic of Congo
- DCI has called on the embassies to advise their entrepreneurs to follow the right procedure for buying gold as given by government
The Directorate of Criminal Investigations (DCI) has issued a notice alerting the public of the increasing cases of gold scams across the country in which foreigners have been identified as the major victims.
The detectives have now advised investors and other business people to conduct due diligence on those they intend to transact with to avoid falling victims of the scams that have seen several people lose their hard earned money.
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Fake gold that was recovered by detectives from office of the Directorate of Criminal Investigations (DCI) after they were led by President Uhuru impersonators. Photo: DCISource: Twitter
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In a Thursday, May 9, Twitter post, the sleuths urged the embassies to advise their citizens coming to Kenya for gold related business to always confirm with the Department of Mines & Geology for procedures of buying and selling of of gold.
"DCI wishes to inform the general public and the foreign nationals in particular that they must ensure that they conduct proper due diligence on the person(s)they intend to engage in the gold buying business," said the DCI.
Barely a month ago the sleuths arrested four suspects who included one Congolese, two Tanzanians, one Nigerians and four Kenyans were after they were found in possession of millions of suspected fake money and 100 kilograms of counterfeit gold nuggets.
Also, the investigators recovered a safe box containing fake gold at Barclays Banks Queensway branch along Mama Ngina street in Nairobi's Central Business District (CBD).
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In another incident, suspect who impersonated president Uhuru Kenyatta led detectives to their house in Ruiru where fake gold and KSh 8 billion in foreign and local currency.
A common trend in the fraud cases is that there is demand for hefty upfront payments to facilitate the processing of documents, after which no export takes place. Two factors make gold traders fall victim easily to fraudsters operating from Nairobi.
In 2017, former Mining CS Dan Kazungu issued a warning to members of the public over the gold scam. He said the criminals had been using false mineral dealers licences, export permits and assay reports purported to have been issued by the ministry.
According to the World Gold Council, in 2018 the country had an average of just 1.76 tonnes of gold reserves out of which only 160 kilogrammes of the metal was mined in the same period.
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As a travel and commercial hub of the region, Nairobi has for long been the conveyor belt for goods and services coming in and out of East and Central Africa which include minerals smuggled from the Democratic Republic of Congo.
Currently, a kilogram of gold in the international markets retails at over KSh 4.2 million. In Nairobi, fraudsters pretend they can get gold from the DR Congo for between KSh 2 million and KSh 2.5 million.
With the huge price variation, investors are driven by their desire to make a killing by selling it to other buyers at higher prices. Once they arrive in the country for the product, they are given first class treatment and the airports and even booked in expensive hotels.
They are then shown documents that appear genuine to support the fake gold business deals and licences to support as authentic business people. They are then asked to pay export processing fee and for the gold.
What follows later are a series of excuses that keep the hopes of the investors higher as the scammers make away with the money.
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