“We shop, that’s all.”
This is how Mohamed Khan, one of South Africa’s biggest money launderers, described his approach to hiding large amounts of illicit money from the authorities.
That code word for washing suits the man better known by his street name, mo dollars. Over the past decade, Khan has built a legend as a go-to figure for people wanting to clean up their dirty money in southern Africa.
He helps some of the region’s wealthiest people legitimize millions of dollars in unaccounted-for cash through a sophisticated network of front companies, bribes and false invoices, thousands of documents and interviews with former colleagues, brother and ex-wife have revealed. of Khan.
Mo Dollars is a central figure in Al Jazeera’s four-part Gold Mafia investigation into gold smuggling and money laundering operations in southern Africa. The investigation reveals how competing gangs have infiltrated state institutions, airlines and banks in Zimbabwe and South Africa to launder vast amounts of money using gold.
“He is portrayed as some kind of shadowy figure controlling money laundering in South Africa,” money laundering investigator Paul Holden told Al Jazeera.
Among Mo Dollars’ main clients is Simon Rudland, a Zimbabwean millionaire who owns one of the region’s largest tobacco companies, Gold Leaf Tobacco. South African tax officials accused Rudland of evading taxes by selling his cigarettes on the black market.
So what exactly is “trading”? How do launderers like Mo Dollars, Rudland and their accomplices move dirty money across borders without being tracked?
stolen identities
A former Mo Dollars employee, whom we call Jimmy to protect his identity, told Al Jazeera that the team goes out at night, looking for poor and homeless people, offering them up to 10,000 rand ($550) if they accompany Mo Dollars. employees to a bank and open accounts. The telephone numbers given to them are registered with the bank.
Then “they took their cell phones, they changed the pin on the banking app,” Jimmy recalled of his time with the group, explaining how the Mo Dollars team takes control of those bank accounts.
Dirty cash from Gold Leaf Tobacco and other clients is divided into small, relatively unsuspicious amounts and deposited into these multiple accounts, which are actually run by financial services providers PKSA and SALT Asset Management, both owned by Mo Dollars. .
front companies
In 2016, Mo Dollars signed Rudland’s Gold Leaf Tobacco as a client. That deal was “specifically with the intent to launder money and nothing else,” Dawood Khan, Mo Dollars’ brother and former colleague, told Al Jazeera. Dawood has severed ties with his brother’s business and is hiding out at an undisclosed location.
Rudland authorized Mo Dollars to conduct currency transactions on behalf of Gold Leaf. The stage for “trade” was set.
Since then, Rudland and Mo Dollars have laundered hundreds of millions of dollars into the bank accounts of a collection of front companies around the world: Aulion in Dubai, Vantage Leaf in Mauritius, Velmont Valley in Switzerland and Liberty Gold in the United States. These companies are controlled by Rudland and his business associates, including Howard “Howie” Baker and Andrew Greyvenstein, company documents show.
In 2017 alone, Gold Leaf transferred $14 million to Aulion, $12 million to Vantage Leaf, $16 million to Velmont and $9 million to Liberty Gold, transaction documents seen by Al Jazeera reveal.
Fooling the central bank
The money is described to South Africa’s central bank, which oversees all currency transactions, such as advance payments for imported goods.
“Every foreign transaction must be reported to the reserve bank and you must give them a reason why you are moving money abroad,” Holden explained. “The import advance is a very useful technique for money launderers because you can justify moving funds out of the country without anything coming in yet.”
“It allows you to move the money overseas immediately and then, you know, create a paper record at your convenience at a later stage.”
In fact, that paper trail is created later: Dawood described how he would create fake invoices for companies that would never actually deliver any product to South Africa.
“In a complete SALT Asset Management book…I can say that 90 percent of the accounts that were in the book were hijacked,” Dawood said.
In the case of Gold Leaf Tobacco, these bogus invoices were initially primarily for tobacco imports that never arrived. The operation then ran into a challenge: they had more dirty money than they could launder using tobacco or other innocuous “imports” like clothing.
So Rudland and Mo Dollars turned to another commodity: gold.
gold smuggling
Under the gold scheme devised by the duo, PKSA makes what are described as loans to Aulion, the Dubai-based front company. In 2018 alone, the amount transferred was $98 million, according to electronic documents.
Aulion, according to official paperwork drawn up by PKSA, buys Zimbabwean gold with that money. But you don’t pay the loan. Instead, the gold is smuggled into Dubai by couriers working for Rudland.
In Dubai, the gold is taken to a refinery where it is melted down and all traces of its dubious origins are removed.
bribe bankers
To ensure that “trading” does not raise any red flags in the South African financial system, Mo Dollars bribe key officials at two of the country’s largest banks, Standard and ABSA, as well as at Sasfin, a bank that focuses on small businesses.
Ledgers seen by Al Jazeera show that thousands of dollars in cash were paid to these officials every month. Other documents and interviews reveal that the illegal and suspicious transactions were only processed when the bribed employees were in the office.
People in bank compliance departments were paid to ensure PKSA and SALT Asset Management paperwork appeared clean and got the required approvals. And in the case of Sasfin, a member of the IT department received bribes to delete fraudulent transactions from the bank’s online system.
“Gold Leaf Tobacco had the ability within Sasfin to move massive amounts of money, unchallenged, because you had your respective eyes on the bank, overseeing the whole process,” Dawood told Al Jazeera.
The victims of ‘merchanting’
Moving millions of dollars in dubious cash across borders helps criminals hide traces of ill-gotten wealth.
But it’s not just a victimless crime. “When you focus only on money laundering, you tend to ignore what money is being laundered,” Holden explained. “(Money launderers) are providing an incredibly vital service to some of the worst people on the planet: human trafficking, drug trafficking and sophisticated organized crime like state capture in South Africa.”
State capture, which a government inquiry confirmed under former South African President Jacob Zuma, refers to systematic political corruption designed to benefit a few private entities.
“State capture had a huge impact on the economy in South Africa,” Holden said. “It has impoverished large numbers of people, it has threatened the real stability of the country in the long term.”
“And all of that was facilitated by things like this.”
Simon Rudland told Al Jazeera that the allegations against him were part of a smear campaign by an unidentified third party. He denied any involvement in the sale of illicit cigarettes and the smuggling of gold or other contraband. He also denied any knowledge of Aulion and told Al Jazeera that Gold Leaf had not passed any money to the Dubai firm.
He accepted that he had dealings with Mohamed Khan, who he agreed “appeared” to be a money launderer. He acknowledged that Gold Leaf and another of his companies had authorized Khan’s SALT Asset Management to act as his agent, but denied that any form of money laundering had taken place for him or any of his businesses.
Rudland said the payments made to Vantage Leaf, Liberty Gold and Velmont Valley had nothing to do with him or his companies.
Gold Leaf Tobacco denied any involvement, past or present, in money laundering, illegal gold trading and related matters. No “tax-free” or “illegal” cigarette could be “attributed” to Gold Leaf, he said. Gold Leaf’s limited transactions with Mohamed Khan and SALT Asset Management were always legal and proper, she said. Gold Leaf said it had never made any payments to Aulion.
Andries Greyvensteyn confirmed that he was under investigation by the South African Revenue Service, along with Rudland and Howie Baker. He said his dealings with Rudland and Mohamed Khan (whom he accepted as a money launderer) had been very limited and denied knowingly engaging in crime or illegal activities. Baker did not respond to a request for comment on the investigation.
Mohamed Khan told Al Jazeera that all the accusations against him were false and based on speculation, conjecture and fabricated and manipulated evidence. He confirmed that he owned PKSA Group and SALT Asset Management and that Gold Leaf were SALT clients, but denied any involvement by him in money laundering or other criminal activity. He denied bribing anyone working in the South African banking sector.
Liberty Gold denied any knowledge of the issues and individuals featured in our investigation, while Vantage Leaf denied any known involvement in money laundering or false billing.
Sasfin Bank told Al Jazeera that it was cracking down on former and suspended employees and clients of its currency unit and said it no longer had a relationship with any of the companies mentioned in this article.
ABSA said it had passed Al Jazeera’s findings to its Forensic Investigation Unit, while Standard Bank said it has a zero-tolerance stance on fraud and crime and would inform and assist any legal investigation.