Dubai Firm Should Lose Cash Over Gold – Court
By Dickson Jere
A Dubai based businessman – through his company – was looking for Gold in Zambia. He was introduced to some purported traders in Zambia under the name of Lusaka Gold and Platinum Refinery Limited. He sent his agent to Zambia who linked up with the “sellers” and took him to Ibex Hill area where the so-called Gold factory was situated. They assured him all was well and he then proceeded to pay USD 277,000 as payment for 45 kg of gold. They even gave him an Air Waybill before they withdrew the money from the bank after a further USD 500,000 was paid. But they never delivered the goods!
However, while the “transaction” was going on, they convinced the Dubai man of another consignment of 123 kg and he made payment of ZMW 8.1 million through FNB bank account of the purported sellers. But bank smelt a rat and immediately alerted authorities who then froze the accounts.
When DEC came in, it discovered that the Air WayBill was fake and the purported sellers did not have any license from the Ministry of Mines to trade in minerals. Consequently, DEC seized the funds and applied to High Court through the DPP to have the same forfeited to the state as tainted property.
But the Dubai man through his company filed a claim as an interested party, arguing that the funds were clean and he was merely a victim of scam and therefore should be given back his money. Simply, he didn’t know about the crime.
A panel of three Judges of the High Court heard the case. The main question was whether the money should be given back to the businessman who was duped in the gold scam.
The Court, after hearing both sides, determined otherwise.
“On the evidence, the interested party failed to take even basic steps to verify the legality of Lusaka Gold and Platinum Refinery Limited’s operations in Zambia,” the Judges observed, adding that the buyer should have done some due diligence before paying.
“By ignoring these clear red flags and choosing to proceed with the transaction, the interested party acted in willful blindness,” the Court said.
The Judges noted that any prudent buyer would have checked whether the seller is genuine and that he had licences to sell Gold before even making payments to the purported sellers.
“It is trite that ignorance of the law is not a defense,” the Judges said.
“We emphasize that forfeiture laws aim to wrest benefits from wrongdoing, participants who turn a blind eye to obvious illegality cannot claim innocence,” they added.
The Judges then ordered the forfeiture of the money.
“In the result, the interested party does not have a legitimate claim to the sum of ZMW 8,142,251.04,” the Court ruled.
Case citation – DPP v Smolenski Trading LCC – 2025/HPEF/002 and Judgement last two weeks ago on 30th September, 2025.
Lecture Notes;
1. This is an interesting case. Section 31 of the Forfeiture of Proceeds of Crime Act of 2010 provides a defence to interested party who acquired an interest in property for fair value after the crime had been committed but could not reasonably have known about the crime or tainted property. In this case, the Court said the Dubai firm did not do fair due diligence. If it did, would have known about the crime. So the Defence fell off.
2. The buyer reported the matter to the police and even sued the scanners to recover his money.