From Liberia with Gold and Millions of USD
A year-long investigation has established that a Lebanese owned Liberian registered gold firm, Golden Vision Trading, suspiciously sent and received at least US$11 million to and from Kaloti, a Dubai company at the time of the payments were under investigation in the United States for money laundering.
Between August 2012 and March 2013, Golden Vision Trading
sent and received money from Kaloti with New York based Standard Chartered Bank
flagging the transaction as suspicious, according to banking records. Kaloti
denies wrongdoing.
In a leaked document obtained by this paper, Standard
Chartered Bank says it had suspicions about suspected money laundering,
suspicious “wire transfers” and the use of high-risk jurisdictions and round
figure payments. In 2013, the bank filed a suspicious activity report about
Golden Vision Trading, an active holder of a gold dealership license issued by
the Liberia Ministry of Mines and Energy.
According to the report, Standard Chartered Bank identified
25 potentially suspicious transactions sent and received by Golden Vision
Trading though an account at International Bank Liberia Limited.
International Bank Liberia says it is prohibited by
confidentiality rules to divulge whether Golden Vision Trading is an account
holder with them. But investigations conducted by this paper unearthed that the
company has an active account with account number ending 0102.
The Standard Chartered Bank reported that the transactions
between Golden Vision Trading and Kaloti were “considered suspicious” because
the transactions to Kaloti were a “high risk business” of precious metals,
“which is known to be a high-risk industry for money laundering”.
The bank also said it independently flagged the transactions
as suspicious because the company used “high risk jurisdictions relative to
money laundering, such as UAE and Liberia.”
Standard Chartered Bank also suspected the transactions
might be money laundering since “a number of transactions were remitted and
received by” Golden Vision Trading “in round dollar amounts.
Round dollar remittances are a known sign of money
laundering, Standard Chartered Bank says in the leaked document.
Golden Vision Trading’s Spokesperson, Joe Aidibi admitted
having business relationship with Kaloti, but disclosed that the bond ended
since 2013.
He denies having knowledge about any accusations or
investigations of Kaloti for alleged money laundering or financial crimes.
About round figure amounts and about any reasons Standard
Chartered Bank may have thought that some transactions were suspicious, Aidibi
said he didn’t know anything and that there were no reasons to be suspicious
about the transactions with Kaloti or any part of Golden Vision’s business.
The leaked document seen by the Daily Observer forms part of
the FinCEN Files; the latest investigation by the International Consortium of
Investigative Journalists (ICIJ), known best for the Panama Papers exposé.
The leaked documents include more than 2,100 suspicious
activity reports filed by banks with the U.S. Department of Treasury’s
Financial Crime Enforcement Network. The agency, known in shorthand as FinCEN,
serves as the leading global regulator in the battle against money laundering.
The records were gathered by Congressional committees
investigating Russian interference in the 2016 U.S. presidential election.
BuzzFeed News obtained the records and shared them with the International
Consortium of Investigative Journalists. ICIJ organized a team of more than 400
journalists from 110 countries to investigate.
A suspicious activity report is not evidence of criminality
but is a sign that bank employees have concerns about possible wrongdoing.
The transactions with the Liberian company took place when
Kaloti Jewellery Group was one of the targets of a money laundering
investigation carried out by the U.S. Drug Enforcement Administration. As part
of the FinCEN Files, ICIJ has revealed previously undisclosed details about
this money laundering probe and its connection to West Africa gold traders. The
U.S. investigation occurred between 2011 and 2016. Specifically, U.S.
investigators suspected that a company in Benin, Trading Track Company, and other
companies doing business with Kaloti Jewellery Group were involved in
laundering drug money through gold.
U.S. investigators did not investigate the Liberia gold
company and there is no suggestion that the company was involved in financial
crimes. However, the timing of the transfers during the U.S.-led investigation
and Kaloti’s well-publicized controversies raise questions about the Liberian
companies’ dealings with the Dubai-based gold refinery. Kaloti continues to do
business today although its refinery business lost accreditation to the “Dubai
Good Delivery (DGD)” list in 2015 – which is effectively a requirement for
trading in the mainstream, international bullion markets.
The payments to and from Golden Vision Trading are part of
US$35.5 million Liberian companies sent outside between 2009 and 2015,
according to the leaked documents.
Liberia Financial Intelligence Unit (FIU) has expressed
shock over the transactions and figures involved, saying “it is a lot of
money”.
Edwin W. Harris, director general of Liberia’s FIU, is not
sure that the FIU was alerted about the suspicious transactions between Golden
Vision Trading and Kaloti.
He promised to launch an immediate investigation into the
matter and noted that the case is an eye opener for the unit to enhance its
supervision on companies involved with the sale and purchase of precious
metals.
He was also surprised that International Bank failed to
alert the FIU about the transactions and said “once these transactions passed
through the bank, the bank was supposed to report it.”
International Bank Liberia, through its Compliance Manager,
Kojo G. Weeks said it couldn’t file any suspicious transactions report because
the FIU wasn’t in existence during the transactions period and that Liberia
never had any regulations to compel banks to do so.
The FIU was established by an Act of the Legislature in
2012.
Since its establishment the agency has had some challenges
ranging from interference and independence.
Mr. Harris said the lack of independence would affect the
robustness of the FIU and noted that one way the institution can be robust and
strong is for it to be independent.
According to him, the Central Bank of Liberia thinks the FIU
should report to it since the Act that created the entity says the bank should
head its board.
Another challenge, Mr. Harris said, is the failure of
Justice Ministry officials and police to prosecute cases of money laundering
and terrorist financing in Liberia.
“We are [an] administrative, not Judiciary FIU. We only carry
out preliminary investigations and forward cases to the Liberia Revenue
Authority (LRA), the police and the Ministry of Justice for prosecution,” Mr.
Harris says. “The FIU has within the last nine months filed 12 cases of money
laundering and terrorist financing cases with the police and Justice Ministry,
but none of those involved have been taken to court.”
“We get frustrated that none of these cases have been
prosecuted. We spent time investigating and writing reports and even paying for
intelligence,” he said.
Mr. Harris said the FIU is beginning to understand that the
failure to prosecute cases of money laundering and terrorist financing is
because people don’t understand the concept and disclosed that the FIU has
approached a USAID funded program that has agreed to provide funding to
initiate training for prosecutors, judges and compliance officers of various
banks across Liberia.
He thinks there is an urgent need for the Central Bank of
Liberia to revisit most of its regulations. The Daily Observer has now
established that Golden Vision Trading is not only involved in suspicious money
transfers but was also indirectly involved in the smuggling of gold from
Liberia.
One of the two men, whose names are registered under the
company at the Ministry of Mines and Energy’s Repository, Hassan Aidibi, was
arrested on 4 February 2019 by customs officers at Liberia’s international
airport boarding a Royal Air Maroc Flight with a briefcase containing gold.
Hassan Aidibi is also the owner of another company under a
similar name: Golden View Trading. Both Golden Vision Trading and Golden View
Trading are housed at the same address in Monrovia.
Liberia Revenue Authority (LRA) said documents retrieved
indicated that Mr. Aidibi was transporting the gold on behalf of Gold Business
Center, a business duly registered under the laws of Liberia and licensed by
the Ministry of Mines and Energy on January 24, 2017 and up to June 26, 2019.
Mr. Aidibi declared 97.94 ounces of gold at a current market
value of US$95,876 and made a 3% royalty payment of US$2,876 into Government of
Liberia Revenue Account, but LRA anti-smuggling investigators found out that
the actual gold he was exporting was 56 kilograms or over 1,900 ounces, valued
at over US$2 million.
The royalty on the gold was estimated at over US$50,000, a
source at the LRA who is knowledgeable of the incident said.
Joe Aidibi, who claimed Mr. Hassan Aidibi is his dad,
dismissed allegations of his arrest as untrue, but said Aidibi was only
questioned about documents or certificates that may have expired.
“Mr. Aidibi was never arrested or charged. A few days after
being questioned, Liberian authorities returned the gold to him and that was
the end,” Joe Aidibi disclosed.
Harris recalls it was the FIU under his predecessor who
provided the tip-off to the LRA that led to Mr. Aidibi’s arrest for questioning
last year.
But Assistant Minister of Mines at the Ministry of Mines and
Energy, Emmanuel T.T. Swan, confirmed that Aidibi was arrested while trying to
evade taxes by falsely declaring the quantity of gold he was exporting.
Assistant Minister Swan however disclosed that the matter
was settled out of court with the legitimate royalties due to government paid.
“You know it is a financial crime. The LRA has a section
that worked with the Police and the Ministry of Justice. They were able to
impose the different punitive measures relative to the financial crime. So my
information is that all of those were settled and the minerals were released to
the company,” Swan noted.
Further investigation conducted into Golden Vision Trading
suggests that the company is buying gold from illegal miners, mostly
ex-combatants operating in protected areas in violations of mineral development
law of Liberia.
Joe Aidibi differs and noted that all the company’s gold is
sourced legally from inside Liberia and Golden Vision complies with all
requirements, including taxes and authorization.
However, illicit miners operating in the Gola Forest, a
protected area near the Liberian-Sierra Leonean border west of the country
alleged that they usually sell to Golden Vision Trading; while miners in
Western Gbarpolu County corroborated that the company is funding some gold
creeks at several mining sites in the county.
“Buying gold from
someone who doesn’t have legal rights to handle minerals is a violation;”
Assistant Minister Swan says. “Golden Vision Trading is compelled by law to buy
only from legitimate brokers and miners”.
Kaloti has publicly claimed that they are a respected
company and abide by gold-trading laws. However, the Dubai mining giant’s
association with Golden Vision Trading coupled with allegations by a
whistleblower at its auditor that Kaloti did make irregular gold purchases,
dents Kaloti’s reputation. The transactions flagged by Standard Chartered Bank
are not the first concerns raised about Kaloti’s gold-buying and selling
conduct over the years.
Asked specifically what the transactions with Golden Vision
Trading were and what the origin of the gold in those specific trades was,
Kaloti failed to reply.
Kaloti told ICIJ, a media partner of the Daily Observer,
that it “vehemently denies any allegations of misconduct, whether those
allegations stem from today or a decade ago. While we have not been provided
copies of the reports (including SARs) you reference, the vast majority of your
questions ask about activities well over half a decade old, and the asserted
DEA and U.S. Treasury reviews of that same information which you appear to
concede concluded without any enforcement action. These questioned activities
also predate significant regulatory changes in the industry. Kaloti’s business
has evolved to comply with those changes and has consistently met or exceeded
all applicable regulatory requirements, consistent with industry best
practices.”
The company said: “Kaloti is a respected, third-generation
family business that owns and runs, among other businesses, a long-established
precious metals trading company and a state-of-the-art gold refinery in Dubai.
It regularly conducts all appropriate and required Know Your Client (KYC) and
Anti-Money Laundering (AML) checks.”
While suspicious activity reports were not proof of
wrong-doing in 2012 and 2013, it does appear as if the gold-related conduct of
Golden Vision Trading and those associated with its senior employees such as
Joe Aidibi, were still controversial as late as 2019. If banks and state
authorities such as the FIU today apply the same criteria for flagging
suspicious conduct they applied then, it may be that newer transactions are
also being carefully studied.
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