“We do merchanting, that’s it.”
That is how Mohamed Khan, certainly one of South Africa’s greatest cash launderers, described his method to hiding huge quantities of illicit money from authorities.
That code phrase for laundering sits properly with the person identified higher by his avenue title, Mo {Dollars}. During the last decade, Khan has constructed a legend as a go-to determine for individuals wanting to wash their soiled cash in Southern Africa.
He helps a number of the area’s wealthiest individuals legitimise tens of millions of {dollars} of unaccounted money by way of a classy net of entrance firms, bribes and faux invoices, 1000’s of paperwork and interviews with Khan’s former colleagues, brother and ex-wife have revealed.
Mo {Dollars} is a central determine in Al Jazeera’s four-part investigation, Gold Mafia, into gold-smuggling and money-laundering operations in Southern Africa. The investigation reveals how competing gangs have infiltrated state establishments, airways and banks in Zimbabwe and South Africa to launder piles of cash utilizing gold.
“He’s type of held up as a type of shadowy determine that controls cash laundering in South Africa,” cash laundering investigator Paul Holden advised Al Jazeera.
Amongst Mo {Dollars}’s greatest purchasers is Simon Rudland, a Zimbabwean millionaire who owns one of many area’s greatest tobacco firms, Gold Leaf Tobacco. South African income officers have accused Rudland of evading taxes by promoting his cigarettes on the black market.
So, what precisely is “merchanting”? How do launderers like Mo {Dollars}, Rudland and their accomplices transfer soiled cash throughout borders with out being tracked?
Stolen identities
A former worker of Mo {Dollars}, who we’re calling Jimmy to guard his identification, advised Al Jazeera that the crew goes out at evening, appears to be like for poor and homeless individuals, and gives them as much as 10,000 rand ($550) in the event that they accompany Mo {Dollars}’s workers to a financial institution and open accounts. Telephones given to them are registered with the financial institution.
Then “the cellular phone was taken away from them, the pin quantity was modified on the banking app”, Jimmy recalled from his time with the group, explaining how Mo {Dollars}’s crew takes management of these financial institution accounts.
Soiled money from Gold Leaf Tobacco and different purchasers is cut up into small, comparatively unsuspicious quantities and deposited into these a number of accounts, that are in impact dealt with by monetary service suppliers PKSA and SALT Asset Administration, each owned by Mo {Dollars}.
Entrance firms
In 2016, Mo {Dollars} signed Rudland’s Gold Leaf Tobacco on as a consumer. That deal was “particularly for the intention of cash laundering and nothing else”, Dawood Khan, Mo {Dollars}’s brother and former colleague, advised Al Jazeera. Dawood has severed ties together with his brother’s enterprise and is hiding in an undisclosed location.
Rudland authorised Mo {Dollars} to hold out international alternate transactions on Gold Leaf’s behalf. The stage for “merchanting” was set.
Since then, Rudland and Mo {Dollars} have laundered a whole bunch of tens of millions of {dollars} to financial institution accounts of a set of entrance firms unfold the world over – Aulion in Dubai, Vantage Leaf in Mauritius, Velmont Valley in Switzerland and Liberty Gold in the USA. These firms are managed by Rudland and his enterprise companions like Howard “Howie” Baker and Andrew Greyvenstein, firm paperwork present.
In simply 2017, Gold Leaf wired $14m to Aulion, $12m to Vantage Leaf, $16m to Velmont and $9m to Liberty Gold, transaction paperwork accessed by Al Jazeera reveal.
Duping the central financial institution
The cash is described to South Africa’s central financial institution – which screens all foreign exchange transactions – as advance funds for items to be imported.
“Each transaction overseas needs to be reported to the reserve financial institution and it’s a must to give them a cause for why you might be transferring cash overseas,” Holden defined. “The import advance cost, it’s a really helpful method for cash launderers as a result of you’ll be able to justify the motion of funds in another country with out something coming in simply but.”
“It lets you transfer the cash overseas instantly after which, you recognize, create a paper path at your comfort at a later stage.”
That paper path is certainly created later: Dawood described how he would create pretend invoices for firms that might by no means truly ship any items to South Africa.
“In a whole ebook of SALT Asset Administration…I can say, 90 % of the accounts that had been on the ebook had been hijacked,” Dawood stated.
Within the case of Gold Leaf Tobacco, these pretend invoices had been initially primarily for tobacco imports that by no means got here. Then, the operation ran right into a problem: That they had extra soiled cash than they may launder utilizing tobacco or different innocuous “imports” like clothes.
So Rudland and Mo {Dollars} turned to a different product: gold.
Gold smuggling
Underneath the gold scheme engineered by the duo, PKSA gives what are described as loans to Aulion, the Dubai-based entrance firm. In 2018 alone, the quantity transferred was $98m, in accordance with wire paperwork.
Aulion, in accordance with official paperwork drawn up by PKSA, buys Zimbabwean gold with that cash. But it surely doesn’t repay the mortgage. As a substitute, the gold is smuggled to Dubai by couriers working for Rudland.
In Dubai, the gold is dropped at a refinery the place it’s melted down and all traces of its dodgy origins eradicated.
Bribing bankers
To make sure the “merchanting” doesn’t increase any purple flags in South Africa’s monetary system, Mo {Dollars} would bribe key officers at two of the nation’s greatest banks – Customary and ABSA – in addition to at Sasfin, a financial institution that focuses on small companies.
Ledgers accessed by Al Jazeera present 1000’s of {dollars} of money had been paid each month to those officers. Different paperwork and interviews reveal that dodgy, illicit transactions had been solely processed when bribed workers had been within the workplace.
Folks in financial institution compliance departments had been paid to make sure that PKSA and SALT Asset Administration paperwork appeared clear and obtained the required approvals. And within the case of Sasfin, a member of the IT division obtained bribes to wipe fraudulent transactions from the financial institution’s on-line system.
“Gold Leaf Tobacco had the aptitude inside Sasfin to maneuver huge quantities of cash, not questioned, since you had the respective eyes within the financial institution, overlooking the whole course of,” Dawood advised Al Jazeera.
The victims of ‘merchanting’
Transferring tens of millions of {dollars} of doubtful money throughout borders helps criminals cowl traces of ill-gotten wealth.
However it isn’t only a victimless crime. “Once you focus simply on the cash laundering, you are likely to ignore what cash is being laundered,” Holden defined. “[Money launderers] are providing an extremely very important service to a number of the worst individuals on the planet: individuals trafficking, drug trafficking and complicated organised crime like state seize in South Africa.”
State seize – which a authorities investigation confirmed below former South African President Jacob Zuma – refers to systematic political corruption designed to profit a couple of non-public entities.
“State seize massively impacted the financial system in South Africa,” Holden stated. “It has impoverished enormous quantities of individuals, has threatened the true stability of the nation in the long run.”
“And that was all facilitated by stuff like this.”
Simon Rudland advised Al Jazeera that the allegations towards him fashioned a part of a smear marketing campaign by an unidentified third social gathering. He denied any involvement within the sale of illicit cigarettes and in gold or different smuggling. He additionally denied any data of Aulion and advised Al Jazeera that cash had not been handed to the Dubai agency from Gold Leaf.
He accepted that he had had dealings with Mohamed Khan, who he agreed “appeared” to be a cash launderer. He acknowledged that Gold Leaf and one other of his firms had authorised Khan’s SALT Asset Administration to behave as their agent however denied that any type of cash laundering had been undertaken for him or any of his companies.
Rudland stated that funds made to Vantage Leaf, Liberty Gold and Velmont Valley had nothing to do with him or his firms.
Gold Leaf Tobacco denied any involvement, previous or current, in cash laundering, unlawful gold commerce and associated issues. No “untaxed” or “unlawful” cigarettes may very well be “attributed” to Gold Leaf, it stated. Gold Leaf’s restricted transactions with Mohamed Khan and SALT Asset Administration had all the time been lawful and correct, it stated. Gold Leaf stated it had by no means made any cost to Aulion.
Andries Greyvensteyn confirmed that he was below investigation by the South African Income Service, along with Rudland and Howie Baker. He stated his dealings with Rudland and with Mohamed Khan (who he accepted was a cash launderer) had been very restricted and he denied knowingly taking part in any crimes or unlawful actions. Baker didn’t reply to a request for feedback on the investigation.
Mohamed Khan advised Al Jazeera that every one allegations towards him had been false and based mostly on hypothesis, conjecture and manufactured and doctored proof. He confirmed that he was the proprietor of the PKSA Group and of SALT Asset Administration and that Gold Leaf had been purchasers of SALT however he denied involvement in cash laundering or different prison exercise. He denied bribing anybody who labored within the South African banking sector.
Liberty Gold denied all data of the issues and people featured in our investigation, whereas Vantage Leaf denied any identified involvement in cash laundering or false invoicing.
Sasfin Financial institution advised Al Jazeera it was taking vigorous motion towards suspended and former workers and purchasers of its international alternate unit and stated that it now not had a relationship with any of the companies named on this article.
ABSA stated it had handed Al Jazeera’s findings to its Forensic Investigative Unit, whereas Customary Financial institution stated it has a zero-tolerance stance regarding fraud and criminality and would report and help in any authorized investigation.