Suspects in the recent gold scam as they walk into court

NBE, Geological Survey disagree on gold inspection
Auditor General to present report

The Federal Police recently discovered hidden gold bars at the residences of two individuals who were detained for an alleged involvement in the National Bank of Ethiopia’s (NBE’s) gold scam.

The police found 70.445 kg of gold in the residence of Mudesir Mohammed, owner Sofam Enterprise, located around the Bisrate Gobriel area here in Addis Ababa. The police also found 8.433 kg of gold in Sultan Mohammed’s house, the brother of Mudesir, who is also behind bars.

The Federal Police Crime Prevention and Investigation Department took the gold bars to the Central Geo-Chemical Laboratory of the Ethiopian Geological Survey for inspection. On February 18, the laboratory inspected the gold found in Mudesir Mohammed’s house. The gold was found out to be a 22-carat gold weighing 70.445 kg. On February 20, the laboratory inspected the gold found in Sultan Mohammed’s house and confirmed that it was 21 carat and weighed 8.433 kg. Other three brothers of Mudesir have also been detained on suspicion of involvement in the gold fraud. Mudesir’s nephew, Baredin Nurserbo, and Mohammed Awol, a young man who used to work for Mudesir, are also suspected of supplying counterfeit gold to NBE.

In a related news, officials of NBE and the Ethiopian Geological Survey have disagreed on the procedures of gold inspection. The NBE took possession of the gold inspection instrument of the geo-chemical laboratory two weeks ago. The Ethiopian Geological Survey agreed to send its chemists to NBE's headquarters when suppliers bring to the bank gold for inspection. After two months since the gold scam began to hit the headlines on Thursday a supplier brought gold to the NBE for sale for the first time. Two chemists of the geo-chemical laboratory went to NBE to inspect the gold. The gold was inspected and the new officials of NBE, who replaced those in imprisoned in connection with the scam, asked the chemists to seal the gold in a wooden box which the bank gives to gold exporters. Executives of the bank asked the chemists to put the stamp of the laboratory on the box. However, the chemists refused to do so saying since the inspection was conducted in the headquarters of the bank it was impossible for them to put their stamp on the box. Consequently, the gold was returned to the owner.   

In another news, the Federal Auditor  General is to present its report on the gold scam to the House of Peoples’ Representatives Public Accounts Standing Committee. The Auditor General has been inspecting the procedures of the NBE, the Ethiopian Geological Survey, and the Ministry of Mines and Energy relating to gold procurement and inspection for the past several weeks. It has finalized the inspection and is expected to submit the report to the Public Accounts Standing Committee in the coming few days.

The Federal police has asked the Geological Survey Geo-Chemical Laboratory for technical explanations on the results of the gold inspection it conducted previously. The police and Auditor General have been assessing the working procedures of  NBE, the Central Geo-Chemical Laboratory, the Ethiopian Geological Survey and the Ministry of Mines and Energy. Both have  also been interrogating officials of the respective organizations.

Reliable sources told The Reporter that the gold fraud was committed in two different ways. One of the suspects, known by the name Kefyalew Umeta, used to directly supply counterfeit gold bars to NBE by bypassing the geo-chemical laboratory. “He just put the gold plated iron bars in the wooden box, put the forged seal of the geo-chemical laboratory on the box and took it to the bank. He also had forged certificates of the laboratory certifying the purity of the gold. Officials of the bank then took receipt of the wooden box, placed it in a vault and effected 80 percent of the payment,” the sources said.

According to these same sources, Kefyalew is a fake name and it is not yet clear if the person that used that name had been arrested or not.  The document obtained from NBE indicates that Kefyalew  supplied 300 kg of gold. However, he supplied 29 boxes of iron bars to the bank with forged document.

Police assert that some of the suspects (businesspeople under arrest) took real gold to the laboratory and after they got the certification and placed the gold in a sealed wooden box on which the emblem of NBE was stamped they opened the box and substituted the real gold with a fake one.

The loss NBE sustained as a result of the scam and the total amount of iron bars NBE bought believing that they were gold is not yet known. However, officials close to the case estimate that NBE has at least lost over 20 million dollars.

By Kaleyesus Bekele