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.
Suspicious transactions report from Standard Chartered shows how a Lebanese-owned gold firm in Liberia transferred more than US$11 million to a company in Dubai
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.
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.
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.
Both Golden Vision Trading and Golden View Trading, housed at the same address in Monrovia, are owned by Hassan Aidibi.
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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