US Authorities Target Southern Africa’s Officials, Businesses Over Gold Smuggling

A 100 trillion dollar Zimbabwe note, worth 40 U.S. cents in 2015, was on display at Coin Heaven in Cottonwood, Ariz., on March 23, 2023. Allan Stein/The Epoch Times

In the early 1990s, a British-Kenyan businessman allegedly stole $2.3 billion from the public coffers of Kenya in east Africa and got away with it.

A commission of inquiry later found that Kamlesh Pattni’s company, Goldenberg International Limited, allegedly pretended to export gold and diamonds, and in exchange received substantial subsidies from the government for earning foreign exchange.

The scheme was allegedly aided and abetted by senior members of President Daniel Arap Moi’s kleptocratic administration, according to the commission’s report.

At the time the Kenyan government was being investigated by several multilateral institutions, including the World Bank, for allegedly misappropriating funds meant for development and poverty alleviation.

The Goldenberg Commission’s final report alleged that Pattni’s operation was “patently corrupt from the beginning,” as Kenya didn’t have significant gold deposits and had no diamonds.

“Officials authorized payments to Pattni for fictitious exports and they all shared in the spoils,” it stated.

Pattni was charged with fraud in 2000 and acquitted 13 years later, after a case in which evidence and witnesses repeatedly disappeared. He has denied any wrongdoing.

“By this time Pattni was long gone, having set up shop in UAE [United Arab Emirates],” said Chad Thomas, a South Africa-based independent financial crimes analyst who’s investigated some of Africa’s biggest corruption cases.

“But Africa remained Pattni’s playground; that’s where all his contacts are, corrupt players in African political and business circles,” Thomas told The Epoch Times.

Some of those contacts were in Zimbabwe, where the economy collapsed in the early 2000s.

Then-President Robert Mugabe’s ZANU-PF regime was accused of plundering earnings from the country’s vast mineral resources, including gold. The regime also seized white-owned farms and eliminated political opponents.

Economic implosion and political persecution in Zimbabwe triggered mass migration.

According to research by British economist Saddique Ansari, Zimbabwe experienced one of the worst episodes of hyperinflation in history as a consequence of economic mismanagement.

“Between 2000 and 2008, the government financed a growing budget deficit by printing money, which led to hyperinflation, with prices doubling daily by 2008,” wrote Ansari in a November 2024 paper examining Zimbabwe’s meltdown.

“At one point, inflation reached 89.7 sextillion percent annually, rendering the Zimbabwean dollar nearly worthless.”

Zimbabwean economist Eddie Cross told The Epoch Times that Pattni saw in the southern African country “exactly the same conditions that enabled him to steal in Kenya.”

Cross noted that the Zimbabwe dollar remains worthless, with citizens forced to trade in U.S. dollars and South African rands.

“What we have in Zimbabwe is the political elite pocketing public money instead of funding essential services and developing infrastructure,” he said.

President Emmerson Mnangagwa, Mugabe’s successor, has continued where his predecessor left off, Cross alleged.

“All forms of wealth, including mines, have been nationalized and mineral profits go to President Mnangagwa and his cronies, and the Chinese, who manage a few mines,” he said.

Workers inspect an open cast at Arcadia Lithium mine in Goromonzi, Zimbabwe, on Jan. 11, 2022. The Chinese firm Zhejiang Huayou Cobalt acquired the hard-rock lithium mine for more than $400 million in April 2022. Tafadzwa Ufumeli/Getty Images

In March 2024, The U.S. government slapped sanctions on Mnangagwa, his wife, and others close to the president’s office for corruption and serious human rights abuses.

Just like in Kenya in the 1990s, Zimbabwe’s failed state has created the perfect conditions for organized crime to flourish, according to the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

Its latest sanctions, effective from December 2024, target 28 individuals and businesses the OFAC says are involved in a global gold smuggling and money laundering network based in Zimbabwe.

The OFAC identified Pattni, now in his late 60s, as the leader of southern Africa’s so-called “gold mafia,” a group it says “poses a threat to the United States and global financial systems.”

In a press release on Dec. 9, 2024, the office alleged that Pattni “has facilitated illicit activities by bribing officials, deploying trusted supporters to mask ownership [of companies], and weaving a global web of businesses to hide the illicit activities.”

The fraudulent scheme, the OFAC alleged, has “robbed Zimbabwe’s citizens of the benefit of natural resources while enriching corrupt government officials and criminal actors.”

The OFAC, the Federal Bureau of Investigations (FBI), and authorities in the United Kingdom began an intensive investigation of Pattni and his network following a media expose in April 2023.

After leaving Kenya, according to the OFAC, Pattni befriended Mugabe and established a scheme similar to the one he allegedly ran in Kenya, “wherein they would generate cash via the sale of Zimbabwean natural resources in foreign jurisdictions.”

U.S. authorities established that Pattni and his lieutenants would return to Zimbabwe and “would overreport the amount of cash being brought back into the country, receive compensation on that, and bribe government officials to receive protection for their illicit activity.”

The OFAC alleged Pattni hid profits behind a global network of front companies.

Pattni and his collaborators are looking to establish new operations in other resource-rich countries, “further compounding the threat his illicit network poses to the United States and global financial systems,” the OFAC alleged.

The U.S. government-led investigation identified Sanjay Keshavji Vaya, a Kenyan national, as Pattni’s “right-hand man” in his Zimbabwe-based activities.

It also identified David Paul Crosby, a British gold trader based in Zimbabwe, as a key figure in the alleged smuggling network. He allegedly controls several companies based in Kyrgyzstan through which money is laundered.

The sanctions freeze all U.S.-based assets owned by those on OFAC’s list and block them from doing business in America. OFAC regulations also prohibit U.S. citizens from dealing with sanctioned people and entities.

Pattni, when contacted in Dubai by The Epoch Times, declined to comment on his dealings in Zimbabwe. He also would not comment on the U.S. sanctions against him and his cohorts.

When asked for comment about Pattni’s business in Zimbabwe, Mnangagwa’s spokesperson, George Charamba, told The Epoch Times: “As we have previously stated, we dismiss the American sanctions with the contempt they deserve. As for the president’s business dealings, they are private.”

He also referred The Epoch Times to a statement made by Monica Mutsvangwa, Zimbabwe’s minister of information, on April 4, 2023, in response to the release of international news network Al Jazeera’s documentary series “Gold Mafia” on gold and money laundering operations in southern Africa.

At the news conference, Mutsvangwa pledged that the government would investigate allegations that a gold smuggling network was operating in Zimbabwe.

“Any person found to have engaged in acts of corruption, fraud, or any form of crime, will face the full wrath of the law,” she said on state television.

“Government takes this opportunity to reaffirm its commitment to upholding local and international laws, including laws relating to financial transactions, the trade of gold, and the other precious minerals of our country.”

Cross said there have been no prosecutions related to gold smuggling in Zimbabwe after Mutsvangwa’s public statement.

“Nothing has come of this so-called investigation,” the Zimbabwean economist said.