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Inside the shady world of gold scams
Happy days. South Sudan tycoon Lawrence Malong displays his dollars during his heyday. COURTESY PHOTO
What you need to know:
Blow-by-blow. South African man narrates how he was tricked to splash $1.9m (about Shs7b) and got no gold in return. He accuses Malong, a South Sudanese socialite known for splashing around dollars, of orchestrating a scam spread across Kampala, Nairobi, Dubai, Hong Kong and Lusaka, that left him on the verge of bankruptcy. Malong and others are currently in Luzira and are facing charges over the matter.
Wegnew Dessie is a middle-aged man of Ethiopian origin, who lives in South Africa.
He greets you with a smile and does not seem bothered by life. He speaks softly. But this is before he tells his story.
He studied medicine, but did not practice it, choosing a career in business because he wanted to be rich.
And he made money over the years, managing to acquire property worth millions of dollars. But he now says he is depressed. He spends a lot of time in Uganda seeking justice, spending yet more out of his decimated fortune.
In a court case currently before Buganda Road Road Magistrate’s Court, South Sudanese socialite Lawrence Malong Lual Yor, who is renowned for living an ostentatious life and splashing dollars, is charged with two others, and others at large, over conning Dessie of $1.9m in a fake gold deal.
When he first came to Uganda in March 2017, Dessie felt he was on the verge of making even more money.
He has a friend called Abebe, who also lives in South Africa.
In his search for opportunities, Abebe went to Juba when South Sudan had just gained independence.
In Juba, Dessie says, Abebe met Malong, an ambitious young man who was also looking for a way to conquer the world.
Malong introduced himself to Abebe as a son of Gen Paul Malong, then a top officer in the armed forces of South Sudan.
In their conversations, Dessie says, Malong told Abebe that because he was the son of his father, he did not require prior appointment to access any official in Juba and in some places in the region.
Abebe was convinced that Malong was the right friend to have. The first experiment ended in failure. Dessie says Malong introduced Abebe to a man he called his friend, who he also said was a minister in the government of South Sudan.
To “facilitate” things, Dessie says, the man Malong introduced to Abebe asked for $100,000 (about Shs370m), which Abebe paid.
But things did not move as fast as Abebe had hoped, choosing to return to South Africa where he already had a foothold.
Shortly after Abebe returned to South Africa, Dessie says, Malong followed him, at the invitation of his friend.
Dessie says Malong stayed over in South Africa for three years – up to 2015 – with all his bills catered for by his host. It was during that time that Dessie got to meet Malong.
Enter Uganda
When Malong left South Africa, he operated in Uganda and Kenya, and in November 2016, Dessie says, Malong informed Abebe that there was a gold deal in Uganda out of which they could make a killing.
On November 26, 2016, Abebe travelled to Uganda to find out details.
Dessie says Malong took Abebe to Speke Resort Munyonyo and introduced him to his team. According to Malong’s story as told to Abebe, Dessie says, there was a rebel leader in the Democratic Republic of Congo, an army general, who owned up to tonnes of gold.
This rebel leader would not be available to meet with gold buyers, Dessie says Malong told Abebe, but that he had delegated his brother, Mike Okitalunyi Lota, to act on his behalf.
Lota was in the meeting that Malong arranged at Munyonyo, Dessie says.
In the same meeting, Malong introduced Thaddeus Gavana Zikusooka, who was supposed to be a clearing agent for gold deals.
After the meeting, Malong and his group took Abebe to a house in Muyenga, Kampala, where the gold on offer was stored.
They showed him 150 bars – 150kgs of what was supposed to be gold.
To make him believe the story, Dessie said, Malong and his group melted a piece of genuine gold in Abebe’s presence.
After Abebe felt that he had confirmed the existence of the gold, Dessie says Malong and group told him that if he finished the 150kgs, they would avail more gold for him to buy, up to two tonnes.
Dessie sucked in
Now that Abebe had confirmed what he saw as a lucrative gold deal, it was time to find money to transact because he did not have enough.
He called his longtime friend Dessie. Dessie says his first reaction was to refuse to get involved, saying since he did not have a licence to trade in gold, he would not participate in the illegal business.
Abebe told Malong as much, and Malong had a solution. Malong, Dessie says, told them it did not matter that the others had no licence since he had a mining licence for gold and diamond.
Debbie says Malong told them the licence was not an issue and all they needed to do was to buy the gold, pay the taxes due to government, and fly it out of the country.
Dessie was then sold into the deal, and he and Abebe flew to Uganda in March 2017, to do business.
Malong and his colleagues, Dessie says, took the duo to the same house in Muyenga where they had taken Abebe before to see the gold.
But Dessie was trying to proceed with caution.
He says he told them he wanted to start with buying one kilogramme and that if the deal worked out, he would return for bigger business.
After Malong and group failed to convince him to buy more, Dessie says, they settled for the one kilogramme he wanted at the start.
He was to pay $23,000 (about Shs85m), 5 per cent tax and one per cent for insurance. He says he paid $30,000 (about Shs111m) in total for the first kilogramme of gold, which he planned to sell in Dubai.
Botched trip to Dubai
Dessie says they then asked the sellers to avail them the documentation and the gold they had paid for so that they would travel to Dubai, United Arab Emirates to do business. A complication set in at that stage – Malong’s licence had expired.
Dessie says Malong asked them for $10,000 (about Shs37m) to renew it. They considered the request and decided that instead of losing the $30,000 (Shs111m) they had already paid for the gold, they were better off paying the $10,000 (about Shs37m) to renew the licence.
After they gave him the money, Malong presented to them what was supposed to be a renewed licence.
“We now know it was fake,” Dessie says.
At this stage, Gavana, who was supposed to be a clearing agent for gold deals, educates Abebe and Dessie that in gold trade, the agent travels with the precious metal to the airport and sees them through all the processes.
So, on the appointed day of their flight, Dessie and Abebe travelled to Entebbe airport and waited for Gavana.
While they waited, Dessie says, Malong and his group called to tell them that there was another complication, that according to Ugandan law, the buyers would not be allowed to travel with just one kilogramme of gold since the gold had entered the country from DRC as 600kgs.
When they showed them what was supposed to be gold for the second time in Muyenga, Dessie says Malong and group had told them that in the same house where they had seen the 150kgs, there were also 450kgs that was available for sale.
In court. South Sudanese socialite Lawrence Malong Lual Yor (second left standing) and his co-accused appear at Buganda Road Court on Thursday. PHOTO BY ABUBAKER LUBOWA
At that time, Dessie says Malong and group told them the minimum amount of gold that they would be allowed to take out of Uganda was 10kgs.
Because they were already deep into the deal, Dessie and Abebe raised more money and paid for another nine kilogrammes, spending $150,000 (about Shs555m) to buy it and $50,000 (about Shs185m) to pay taxes, all of which Dessie says was handed to Malong and group.
When the appointed day to fly to Dubai came, Dessie and Abebe again received the same explanation.
Malong and his group told them that Uganda Revenue Authority (URA) would not allow them to take only 10kgs of gold out of the country yet the gold entered the country from DRC when it was 600kgs.
The more the merrier
At this point, Dessie says, they lost their heads and demanded to be refunded their money and abort the deal.
Refunding the money, however, was not an option since Malong and group said it had already been spent.
Dessie says Malong explained to them that the owner of the gold, who was also supposedly running a rebel group in DRC, had soldiers to feed and other bills to pay.
At every stage when their faith got shaken, Dessie says, Malong would remind them that his father was Gen Malong, a top soldier in South Sudan, and that the seller of the gold is another General in DRC.
No one anywhere in the world would like to mess up with the two Generals, Dessie says Malong assured them.
To avoid the complication of being blocked at the airport because of small quantities, Dessie says then Malong came up with the idea that they instead buy 150kgs of gold.
Dessie says they told Malong that they did not have the amount of money required to buy that amount of gold, to which he says Malong also had a solution.
“We trust you, at least you pay the tax and take the gold, sell and pay us after,” Dessie quotes Malong as saying.
He says when they said they did not even have the money to pay tax for the 150kgs, Malong told them he did not have money to refund their investment, and that they did not want to lose it.
The money required to clear 150kgs was $500,000 (about Shs1.8b).
Dessie and Abebe went back to South Africa to look for it. When they returned with $200,000 (Shs740m), Dessie says, Malong and group told them that it was not enough, but they would use that to talk to an officer of URA to let them through Entebbe.
Before releasing the money, Dessie, says, they demanded to see the URA officer referred to. Malong then presented to them a man he called Patrick, who he introduced as “chief officer” of URA.
Patrick eventually agreed to let them export the gold and pay the other part of the tax after they sell, Dessie says.
After paying the $200,000 (about Shs740m) as a deposit on the taxes, Dessie says, another demand cropped up.
Malong and his group wanted another $100,000 (about Shs370m) because they were going to release gold of too much value to Dessie and Abebe and there were things that needed to be attended to urgently.
After receiving the money, Malong and group allowed the gold to be shipped to Dubai. Another scene was just unfolding.
No gold in Dubai
On the appointed day of the flight to Dubai, Dessie and Abebe went to the airport and, as they had got used to doing, waited for Gavana to come through with the gold and documentation.
Gavana this time showed up, and he did have the cargo – a steel container with 150 bars of gold.
Dessie says the box was opened and they were allowed to inspect it to confirm that it is what they had bought.
They confirmed it and were allowed to lock the box with their own padlock and take the keys.
The duo travelled to Dubai and were told that their cargo would follow them there.
On the following day while in Dubai, they went to Blue Sky Cargo to ask for their merchandise.
On leaving Entebbe airport, they had been given the paperwork and a tracking number for their gold.
The cargo was nowhere to be found.
In panic, Dessie says, they called Malong and Gavana, who had stayed back in Kampala, to find out what the problem was.
Dessie says Malong told them not to worry, that he was always in control, that the gold would be found.
The following day, Dessie says, Malong called to say the gold had been taken to Nairobi and not Dubai, requesting them to fly to Nairobi. Dessie and Abebe flew to Nairobi.
Dessie says when they got to Nairobi, they found Malong and group, who informed them that the gold was in the hands of the revenue body.
“Malong told us that a chief Kenya revenue service officer was his brother, so we were lucky,” Dessie says.
Malong introduced his “brother” as Owino in Kenya. It was Owino’s turn to explain to Dessie and Abebe what had happened.
Dessie says Owino told them that the revenue officer in Uganda had smuggled the gold to Nairobi instead of sending it to Dubai because the duo had only paid less than half of the tax.
Dessie says Malong told them that they were in luck because if Owino was not his brother, the gold would have been seized by the tax body in Kenya.
Malong said the gold would not return to Uganda since that would cause problems.
Dessie says Malong implored them to let Owino do the paperwork showing that the gold originated from Nairobi and facilitate its export.
Dessie and Abebe were then required to pay another $450,000 (about Shs1.6b) to complete the process.
In Daily Monitor tomorrow, we recount Dessie’s ordeal back in Kampala, Hong Kong and Lusaka, until he decided that he had been conned and involved the police.
Previous case
In March last year, detectives arrested former National Resistance Movement Kampala City mayoral aspirant on allegations of conning a senior presidential assistant in charge of diaspora issues and her business partner over Shs450m in a fake gold deal.
Muhammad Kasule, who is also proprietor of Blue Diamond Corporation, allegedly conned Ms Florence Kiremerwa and her US business partner, Mr Richard Richards, of the said money after promising to deliver to them two kilogrammes of gold.
Mr Vicent Ssekatte, the spokesman of the Directorate of Criminal Investigations, said: “A complaint was made to us and we have arrested Kasule on charges of obtaining money by false pretences and uttering false documents and forgery.”
It is alleged that Kasule promised Ms Kiremerwa and Mr Richards to sell them gold at US$50,000 (Shs150m) mid last year.
Mr Richards wired US$48,000 to Ms Kiremerwa’s bank account. She also transferred the money to Kasule’s account in KCB main branch in Kampala City.
Mr Ssekatte said Kasule didn’t deliver the two kilogrammes of gold.
“He told Richards to travel back to US and convinced him that he would send the consignment. When Richards went back to the US, Kasule started dealing with him directly,” he said.
