Mutombo involved in African gold smuggling

By Mike Tolson and Tony Freemantle
HOUSTON CHRONICLE

One-time NBA star Dikembe Mutombo has made a worldwide name for himself sponsoring humanitarian projects and noble causes in his native Africa, so it was only natural that two State Department officials would meet with him in November 2010 as part of his effort to bring more attention to the bloody trade in conflict minerals that has bedeviled his homeland, the Democratic Republic of Congo.

Less than two weeks later, according to a U.N. report, Mutombo was in New York on a more personal cause — trying to interest a Houston oil executive in a $10 million deal to buy 1,045 pounds of gold from the mines of eastern Congo, the heart of the conflict mineral trade.

If Mutombo had reservations about the apparent contradiction between word and deed, he did not show it. He eagerly explained how he and his family had 4 tons of Congolese gold just waiting for a buyer.

Because of an internal ban on mining and exports, imposed to try to stop the main revenue source for the mafia-like militias that controlled them, the gold could not be taken to market in usual ways. What Mutombo needed was somebody with money, connections and the ability to put a deal together.

Enter Kase Lawal. As chairman of CAMAC, a Houston energy company, Lawal knew Mutombo from the latter’s final days with the Houston Rockets — and he knew how to do business in Africa. Lawal moved to Houston from Nigeria as a young man and built a company that prospered in large measure because of his operations there and in neighboring countries.

Better yet, he had millions of dollars at his disposal, a corporate jet big enough to move extra cargo and an old family friend, Carlos St. Mary, with experience trading Third World minerals.

St. Mary said the deal was described as lawful in Kenya, where it would take place. He started work immediately, hoping the transaction would be done before Christmas. The gold was “dirty,” still in nugget and dust form, but that hardly mattered. St. Mary had expectations of his biggest payday ever with his share of the profits.

There were, however, no profits to be had. In truth, the deal was an elaborate scam that ended at an airport in Goma with the seizure of the Gulfstream V jet and the arrest of St. Mary and several CAMAC employees, all suddenly facing accusations of money laundering and attempted smuggling.

More than 1,000 pounds of gold pulled from the cargo hold was taken away by Congolese officials. Two bags containing $6.6 million in cash were gone as well, into the pockets of a local general whose loyal troops oversee much of the nearby mining operations.

To make matters worse, Lawal had to pay millions more to recover his plane and his people. St. Mary said Lawal later told him the entire ordeal cost him around $30 million.

The failed smuggling plot drew global attention. But conspicuously absent from publicity surrounding the incident was any mention of the part played by Mutombo, the finger-wagging basso profondo whose 7-foot stature and defensive prowess made him a force on the hardwoods.

Not only had Mutombo initiated the deal, St. Mary said, but he and his family played a key role from the onset, one not revealed until recently with the release of a United Nations report on Congo’s militia activity that recounts the incident.

Mutombo would not talk about his involvement. “I have nothing to say,” he replied when reached by phone in Atlanta. But the extent of it became clear through lengthy interviews with St. Mary, who kept records and copies of text messages throughout the ordeal, and the report by U.N. investigators. Through a spokesman, Lawal declined to comment.

Two big surprises

It all started on Dec. 3, 2010, when St. Mary walked into a New York hotel. He thought he had been summoned to help with an oil deal that Lawal had been pursuing in Liberia. To his surprise, he saw Mutombo, an old acquaintance, and three of Mutombo’s nephews, David and Stephan Kapuadi and Reagan Mutombo.

More surprising was the Mutombo contingent’s proposal: the purchase of 1,045 pounds of gold that would generate $10 million in profits to be divided three ways — 40 percent to Lawal, 30 percent to St. Mary and 30 percent to the Mutombo family. And there was the promise of more gold to come.

The U.N. report said Reagan Mutombo and the Kapuadis ran through a PowerPoint presentation, complete with slides of gold bullion and the admonition, underlined, that “highest discretion and confidentiality is a priority.” Initially, the Kapuadis said, the group would act as the buyer, and a valid license to import gold or minerals was mandatory.

There was no discussion of conflict minerals, the broad term that refers to gold and three other minerals used in electronics and other industries, and the production of which often involves forced labor and helps fund armed conflict.

Dikembe Mutombo represented that the gold belonged to him and “his people,” said St. Mary, whose work as a trader in rough diamonds has taken him to dangerous places with sketchy characters. Asked why the transaction would take place in Kenya, Mutombo said there was “too much shady stuff in Kinshasa” — Congo’s capital — and that Nairobi was closer to his village, St. Mary said. Mutombo was to supply both product and paperwork, and Lawal was to provide funds for the purchase and to cover expenses.

St. Mary was to evaluate the gold and find buyers.

“He had an answer for everything,” St. Mary said of Mutombo as they went through the details of the proposed deal.
Whose gold was it?

At various points over the next two months, St. Mary thought the whole thing smelled fishy.

He said he encouraged Lawal to think twice about going through with it. But Lawal wanted to give the deal every chance, according to St. Mary, largely because Mutombo constantly reassured them it would all work out fine.

Though Mutombo and his family early on claimed the gold belonged to them, St. Mary actually found himself dealing with someone named Eddy Michel Malonga who claimed to be the real owner of the gold.

He also began to demand 40 percent up front. In late December, Lawal reluctantly turned over almost $4 million in cash, but only after getting a certificate of ownership and having the gold placed in a secure customs warehouse in Nairobi, the capital of Kenya. A week later, Malonga — and the gold — disappeared. The purported customs facility was a sham.

St. Mary said he reported the missing gold and apparent swindle to Kenyan authorities, and Lawal sent his security team to trace Malonga’s movements, vowing to do what was necessary to “smoke him out.”

Malonga, feeling the heat, called and said the gold had to be moved and was now in Congo. The deal could still go through, but St. Mary would have to come to Goma with the rest of the cash to get it. A Nairobi lawyer hired by St. Mary and one of Lawal’s security officers flew to the city of 500,000 on Congo’s eastern border and confirmed the gold was there, apparently secure on a military base.

But was it worth the risk? Kenya offered relative safety and neutral authorities. Goma was the home turf of Gen. Bosco Ntaganda, a militia warlord under indictment from the International Criminal Court.

Mutombo was still pushing the transaction on Jan. 28, just a few days before the airport arrests, when he and St. Mary attended a celebration of CAMAC’s 25th anniversary at a huge private party at the Hobby Center. While Lawal was mingling with more than 500 local luminaries, Mutombo sought to allay St. Mary’s ongoing concern.

“He’s trying to assure me the whole night,” said St. Mary. “Just get this deal done, he says, and there will be much more. Kase finally tells me to be at his office at 11 the next day. When I get there, he asked me what I thought. I said it was a judgment call. I could see why you would want to salvage the deal if it is salvageable.”

One person got away

Lawal gave the go-ahead for his brother Mickey, a CAMAC executive in Nigeria, and St. Mary to fly to Goma. But because of the trouble and expenses, he was lowering Mutombo’s share to only 10 percent. When St. Mary relayed this news, Mutombo did not take it well.

“No, no, no,” he said, according to St. Mary. “This is the third time he has done this to me.”

Several days later, the deal went haywire on the tarmac in Goma. Armed soldiers were everywhere, as were bickering officers and government officials who apparently were arguing over where the bags of money would go. St. Mary lost contact with Mutombo and Malonga.

Curiously, the one man on the plane in Goma who was not arrested by government authorities along with St. Mary and the others was Reagan Mutombo. He drove away from the Gulfstream at the airport with Ntaganda’s soldiers.

“He’s Congolese and we’ll take care of him,” the warlord’s men said.

Almost a year later, St. Mary remains unclear precisely why the deal went south at the end. He has no more contact with Mutombo and does not know whether he ended up with any money. He is also estranged from Lawal, who has yet to publicly acknowledge any role in the debacle.

St. Mary said Mutombo, a Congolese hero so praised for his work on behalf of humanitarian causes in his homeland, was meeting with President Joseph Kabila in Kinshasa, ostensibly to discuss politics, at the moment the deal blew up. Because of the timing, St. Mary cannot help but wonder whether top government officials had been informed of the gold deal — or perhaps knew about it all along — or whether CAMAC’s jet and Lawal’s representatives were lured to Congo by design.

This St. Mary knows for sure: The last time he saw the gold, it was in a vault at the Central Bank of Congo. Ntaganda ended up with a considerable amount of Lawal’s money. The Congolese government presumably got the rest and at least $3 million in fines. And St. Mary ended up with nothing.

“I’m not sure what (happened),” he said, “but this was a calculated devious plan.”

mike.tolson@chron.com


tony.freemantle@chron

http://blog.chron.com/ultimaterocke...-million-
gold-scam-only-now-coming-to-light/