Gold bars. Shutterstock
An American national has lost more than Shs2.2 billion in a transaction that never was, following the purchase of non-existent gold mines and land. Serge Chistov, an American of Eastern European origin, lost the money in different tranches over a period of more than 13 months between January 2023 and January 2024. The scams involved two lawyers attached to two prominent law firms in downtown Kampala and other people suspected to be security operatives.
Ms Mariam Natasha Oduka, the communications manager of the State House Anti-Corruption Unit, told this publication that the case is one of many involving Ugandans scamming foreign nationals that the unit has been investigating. In his September 18, 2024 letter to State House’s Anti-Corruption Unit, Mr Chistov, who had been dealing in gold in Tanzania, revealed that a friend introduced him to one of the lawyers involved in the scam early in 2023.
Assurances were made that Mr Christov had been connected to “a genuine lawyer who would help” him do business in Uganda. Mr Chistov arrived in Uganda in February 2023 and met the genuine lawyer we will refer to as Lawyer One. In the middle of that month, February of 2023, the American and two of his associates from Tanzania were driven to the Hilton Garden Inn in the leafy and upscale Kitante area. While there, the American was introduced to about six other people who were described as “genuine gold dealers.”
“During that meeting, they agreed to provide five kilogrammes of gold, each at the cost of $48,000 (about Shs176.1 milion). In all we were to pay them $240,000 (about Shs880.5 million), but we would have to pay at least 25 percent as a show of commitment,” one of the American’s associates told this publication, adding that the 25 percent came down to $60,000 (about Shs220.1 million).
Viewing the gold A week later, the American and his associates were driven to an office building in Bukoto, which the scammers, who had uniformed escorts from the Anti-Terrorism Police, claimed were their office premises. “We were told to hand over the deposit prior to being taken out to view the gold, which we did,” Mr Chistov’s associate revealed.
The American’s entourage was then driven to a customs bonded warehouse in Namanve where they viewed and inspected the gold. Mr Chistov, who has some experience in dealing with gold having traded in the same while operating in Tanzania, says that what they were shown was genuine processed gold. Between $300m (Shs1.1 trillion) and $600m (Shs2.2 trillion) worth of gold is annually smuggled out of the Democratic Republic of the Congo (DRC) via Uganda.
According to a report entitled The Intermediaries: Traders Who Threaten the Democratic Republic of Congo’s Efforts for Conflict-Free Gold, a great deal of the gold that ends up in Uganda from the DRC ends up in the United Arab Emirates (UAE). Despite of this abundance of gold, Kampala has also gained notoriety for being a hub of scammers.
Mr Chistov ran into one of them. The scammers in question then demanded that the American hands over the rest of the balance of $180,000 (about Shs659.6 million) before the gold could be handed over to them. They also demanded for an additional $10,000 (about Shs36.6 million) as the cost of transport and security during the time of delivery. That brought the total cost of the gold to $250,000 (about Shs916 million). The money was duly delivered to the purported offices of the scammers in Bukoto, a Kampala suburb, but the gold was never delivered to the American and his associates. The scammers vanished. “We went back to the office, but found that it was not their office. It must have been used as a temporary office for purposes of stealing from us. We also went back to the warehouse, but there was no trace of the people who had taken us there,” Mr Chistov said.
Plot thickens The American then launched a search for the scammers. It was at that point that Lawyer One introduced Lawyer Two, who duly promised to “use his connections” within the security agencies to trace and apprehend the scammers, but at a cost of $40,000 (about Shs146.7 million). “The two lawyers assured me that they would trace the people who had taken my money.
After a few days, the second lawyer video called me saying that he had nabbed one of the fraudsters in Congo. He was indeed with the fraudster, but a few days later, he told me that he had failed to bring the fraudster back to Uganda. I later came to learn the fraudster was known to the two lawyers,” Mr Chistov wrote in his documented petition to the State House unit.
The two lawyers then advised Mr Chistov to incorporate a company in Uganda, saying that it would make trading in gold and other minerals easier.
A company, Igolide Uganda Limited, was subsequently incorporated, with Chistov as a managing director and majority shareholder and the two lawyers as shareholders. According to the American, the two lawyers informed him of the availability of land in Kassanda District, which they claimed the Ministry of Energy and Mineral Development was open to licensing to a prospector. They, however, hastened to add that such a licence could only be obtained if the minister received an inducement of $50,000 (about Shs183.2 million), which was duly handed over to the lawyers. No licence was, however, ever delivered.
It later emerged that the mine that the lawyers were talking about was Kisita Gold Mine, from which the government had earlier evicted artisanal miners to allow for licensed investors to prospect for gold. The $50,000 was lost.
Firm as a conduit Ultimately, the incorporation of Igolide turned out to be a conduit through which more money—both dollars and Uganda shillings—was eventually stolen from him. In November 2023, he was “advised” to enter into an agreement with artisanal gold miners in Mubende. The agreement was meant to serve as some sort of contract that would ensure that the miners supplied Mr Chistov with gold. “I gave Lawyer One $40,000, as consideration for that arrangement, but I have never received a signed copy of the said agreement and I have not received any benefits from the arrangement,” Mr Chistov wrote.
It is now feared that the money was swindled by Lawyer One—Shs40 million for purposes of purchasing land for purposes of setting up an illusion plant—vanished in thin air. As it turned out, since the American was always in and out of the country, it was deemed necessary to make the two lawyers signatories to the company’s accounts. However, as the American was to later discover, that was a very fatal error in judgement.
Ms Oduka told this newspaper that investigations into the scam are complete. “We are now in the process of compiling our findings for onward transmission to the Director of Public Prosecutions (DPP) for legal advice,” she said.
