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Corruption: Zimra official loses house

by Kelvin Mutsa Mufute -

Corruption: Zimra official loses house

 Daniel Nemukuyu Investigations Editor
Corruption: Zimra official loses house

The Mabvazuva house that has been forfeited to the State

Former Zimra revenue officer Mr Kennedy Nyatoti has made history by becoming the first person to lose assets under Zimbabwe’s civil-based asset forfeiture law when his US$150 000 mansion and US$10 000 car were forfeited to the State after he and his divorced wife failed to explain how they could afford these.

Mr Nyatoti’s lawful income between October 2014 and May 2018 was US$44 907, and it was established that he neither had private income nor was he running a private business. So he failed to explain how he managed to build the US$150 000 mansion in Mabvazuva suburb in Harare and buy a Honda CRV valued at US$10 000.

Zimra’s lifestyle audit team discovered the mansion and car, after perusing the claims made during the divorce proceedings between Mr Nyatoti and his wife.

Investigations established Mr Nyatoti never ran a legitimate business during the period in question, neither did he prove any payment of income tax regarding the funds needed to build the house.

A court application was made for civil forfeiture in terms of the amended Money Laundering and Proceeds of Crime Act and the High Court ordered forfeiture of the mansion and the car.

Previously, the State could only apply for forfeiture after a conviction for a corruption-related offence.

However, the new law now allows the State to apply for forfeiture under civil rules even without instituting criminal proceedings.

The main difference is that in civil cases a party only has to make a case on the balance of probabilities, but in a criminal case the rule is proof beyond reasonable doubt. So even if corruption was probable, but not proved, under the old rules the person kept the assets. Under the new law they can lose these.

If one fails to justify his or her wealth as required by law, the State can successfully forfeit the unexplained wealth.

Prosecutor General Mr Kumbirai Hodzi hailed the court’s decision saying processes were now underway to transfer ownership of the house and the car to the State.

Mr Hodzi said the new civil forfeiture law was a more effective in recovering funds lost through corruption or fraud.

Mr Nyatoti’s woes mounted when he parted ways with his wife. The divorce proceedings exposed Mr Nyatoti as someone living an expensive lifestyle well beyond his


Both Mr Nyatoti and his wife, Ms Tatenda Chisadza, were taken to court after failing to explain how they managed to build the property in Harare’s Mabvazuva suburb when his earnings during the period under review only amounted to US$44 900.

Investigations by Zimra also revealed that besides constructing a luxurious house, Mr Nyatoti allegedly paid lobola amounting to US$10 000 in 2016 before taking his family on a trip to China at a cost of US$15 000 in November 2017.

Principal Public Prosecutor Mr Kelvin Mufute said he was satisfied that the couple’s identified property constitutes proceeds of crime and was, therefore, tainted.

Mr Mufute further said Mr Nyatoti acquired a Honda CRV valued at US$6 000 which he registered under Ms Chisadza’s name, a Nissan Skyline valued at US$4 000 for his sister, built a house worth US$150 000 in Mabvazuva, Harare, and bought a Honda Fit registered under his mother’s name.

The court agreed that the assets could not have been acquired under the known income of the couple.

Buttressing the State’s case, Zimra’s loss control officer Mr Blessing Majoni submitted that his investigations had established that Nyatoti abused his office and obtained the funds through corrupt means, adding he even tried to hide behind his sister, Portia, in a bid to justify how he acquired his wealth.

But Portia could not have had the money either. Mr Majoni said Nyatoti lied about the amounts spent on vehicle imports, which was later verified by Zimra. Nyatoti allegedly also claimed that his sister had provided US$100 000 towards construction of the Mabvazuva house, but it later turned out that Portia was a mere receptionist and did not have that sort of money.

(Edited by Kudzai Chinoda - original submission Wednesday, 3 June 2020, 5:05 PM)

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A Shallow Flood - Heroin markets in East and Southern Africa

by Julian Rademeyer -

A new report published today by the Global Initiative Against Transnational Organised Crime presents the most extensive survey of heroin markets, prices and flows in East and Southern Africa ever published.

The report examines heroin markets in Tanzania, Mozambique, South Africa, eSwatini, Lesotho, Zambia, Zimbabwe, Malawi and Namibia.

A steady flow of heroin has gradually seeped across the region, and this has had a significant impact on the many secondary towns found along the continent’s transcontinental road networks. These places, in turn, have spawned their own small local heroin markets, and become waypoints in rendering sustainable the spread of heroin across the region.

The impact has been significant and the emerging drug markets represent credible threats to the development and security of the regions institutions and structures.

A copy of the report can be donwloaded here.

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Crime and Contagion: The impact of a pandemic on organized crime

by Julian Rademeyer -

The fallout of the COVID-19 pandemic is having profound impacts on society and the economy, and it will also influence and shape organized crime and illicit markets. The institutional response to the pandemic and the consequent reshaping of socio-economic norms worldwide will affect how criminal networks operate, as well as the nature of law-enforcement responses to them.

A new policy brief from the Global Initiative Against Transnational Organised Crime examines the impact of COVID-19 on crime: This is the first in a series and every week as part of our #CovidCrimeWatch, we will publish a series of articles about the pandemic and organised crime.

More in the links above and here:

(Edited by Kudzai Chinoda - original submission Thursday, 26 March 2020, 3:09 PM)

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DPP & EACC hand over Ksh.2B of corruption proceeds to Covid-19 emergency fund

by Kudzai Chinoda -

DPP, EACC hand over Ksh.2B of corruption proceeds to Covid-19 emergency fund

By Francis Gachuri For Citizen Digital

Published on:  April 7, 2020 11:31 (EAT)

The Office of the Director of Public Prosecutions (DPP) and the Ethics and Anti-Corruption Commission (EACC) on Tuesday presented a donation of Ksh.2 billion to the National Treasury as part of efforts to beef up the Covid-19 emergency fund.

DPP Noordin Haji and EACC boss Twalib Mbarak, while issuing the dummy cheque to Treasury Cabinet Secretary Ukur Yatani, said the funds were part of recovered proceeds of crime such as corruption and money laundering.

DPP Haji said the prosecution fund established last year had so far netted Ksh.2.9 billion, from which the Ksh.2 billion presented to Treasury had been retrieved to aid in the fight against the novel coronavirus.

“We have various institutions dealing with corruption. A lot more money is out there but because cases are not complete, we can’t use it. We have to wait for the cases to be complete,” noted Haji.

Twalib, on his part, said: “This money is a product of plea bargaining. There are some cases ongoing, we can’t use the money because of pending appeals. But we are confident we will recover this money.”

The EACC CEO added that the war on corruption is still ongoing, further expressing confidence that it will bear fruits and more public resources illegally held in terms of land and property will be recovered and reverted to the government.

CS Yatani commended the two State agencies for the move, also urging others to follow suit and channel some funds to the Covid-19 emergency kitty.

He also revealed that the Treasury had received a pledge of Ksh.7 billion from the Sports fund as well as other individuals, organizations and State agencies.

“We are revising the budget and we won’t spare any item. We are suspending some projects to address the current situation and recovery of the income. We are cutting on some expenditure that we can push to the next financial year,” he said.

“I may not be able to give you the specifics on the budget for Covid-19 because it’s a moving target, but the figures are massive. Some of these proposals are outrageous, we may not be able to finance them. Even with the prevailing circumstances, we must run a fiscally sound economy.”

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COVID -19 and its Consequences

by Kudzai Chinoda -

Dear ARINSA Family,

There’s been widespread anxiety – and no doubt fear, following Monday's announcement by the President   to lockdown South Africa until 16 April 2020. Around the world, the coronavirus pandemic has turned our lives upside down.

As a result, people are increasingly weary, anxious, uncertain and perhaps even stressed.  We at ARINSA remain available to help you as best as we can during this challenging season.  

As circumstances quickly evolved here in South Africa we have made the transition for our team to work from their respective homes as of Monday, 23 March 2020.  Our office will be closed during the lockdown period HOWEVER you will still be able to reach us by phone via WhatsApp as you always have. We are available to answer your calls and remain committed to assist where ever possible.

We don’t dispute that the situation is less than ideal – but we’re grateful that technology is allowing us to remain connected and effective throughout this crisis.

To this end, we have opened up ARINSA Community a special page on our website which has been populated with relevant articles, resources and broadcasts which can be helpful during the next few weeks. Click here to check it out now.

While you’re online, please feel free to take advantage of the chatting platform to send a timely message to a colleague or ask questions. Comment on the various articles on the website, visit the e-learning platform, check out the case law blog by clicking here now. You will have great fun, while also learning valuable lessons.

You’re still able to browse our online repository of resources under the "Green button" in ARINSA Community, or the Member Countries area which you can access by clicking here.

If you find yourself needing guidance or assistance - you’re still able to connect with us through email.

Maybe the crisis is time for you to focus on advancing and sharpening your skills. If you ever find yourself needing to talk do not hesitate to call or send a message via this link. Search for any of our names from the Secretariat send a message and we will gladly chat.

ARINSA is committed to your success, we want to help you in making sure that "criminals have nowhere to hide". It’s our calling. It’s our mission. And it’s our privilege.

Please continue reading our articles and login regularly and let us have your comments or areas that we need to improve on. If you are inactive or you have forgotten your login credentials and you have received this message, then you still have a chance to be active again. I am extending my hand to you to reach me now on my email:

We’re all in this together, and we’ll all get through it together. We want to turn this "work from home" time in to the best ever time we have ever had in our carriers.

And please join us as we pray for a miraculous and positive turn of events in this unprecedented global crisis.

Yours sincerely,

Kudzai Chinoda
+27 83 341 8561 (WhatsApp)

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How U.S. Firms Helped Africa’s Richest Woman Exploit Her Country’s Wealth

by Kudzai Chinoda -

How U.S. Firms Helped Africa’s Richest Woman Exploit Her Country’s Wealth

By Michael Forsythe, Kyra Gurney, Scilla Alecci and Ben Hallman

   ·Published Jan. 19, 2020Updated Jan. 23, 2020

LISBON — [Update: Isabel dos Santos is set to face embezzlement charges in Angola.]

It was the party to be seen at during the Cannes Film Festival, where being seen was the whole point. A Swiss jewellery company had rented out the opulent Hotel du Cap-Eden-Roc, drawing celebrities like Leonardo DiCaprio, Naomi Campbell and Antonio Banderas. The theme: “Love on the Rocks.”

Posing for photos at the May 2017 event was Isabel dos Santos, Africa’s richest woman and the daughter of José Eduardo dos Santos, then Angola’s president. Her husband controls the jeweller, De Grisogono, through a dizzying array of shell companies in Luxembourg, Malta and the Netherlands.

But the lavish party was possible only because of the Angolan government. The country is rich in oil and diamonds but hobbled by corruption, with grinding poverty, widespread illiteracy and a high infant mortality rate. A state agency had sunk more than $120 million into the jewellery company. Today, it faces a total loss.

Ms. dos Santos, estimated to be worth over $2 billion, claims she is a self-made woman who never benefited from state funds. But a different picture has emerged under media scrutiny in recent years: She took a cut of Angola’s wealth, often through decrees signed by her father. She acquired stakes in the country’s diamond exports, its dominant mobile phone company, two of its banks and its biggest cement maker, and partnered with the state oil giant to buy into Portugal’s largest petroleum company.

Now, a trove of more than 700,000 documents obtained by the International Consortium of Investigative Journalists, and shared with The New York Times, shows how a global network of consultants, lawyers, bankers and accountants helped her amass that fortune and park it abroad. Some of the world’s leading professional service firms — including the Boston Consulting Group, McKinsey & Company and PwC — facilitated her efforts to profit from her country’s wealth while lending their legitimacy.

The empire she and her husband built stretches from Hong Kong to the United States, comprising over 400 companies and subsidiaries. It encompasses properties around the world, including a $55 million mansion in Monte Carlo, a $35 million yacht and a luxury residence in Dubai on a seahorse-shaped artificial island.

Among the businesses was the Swiss jewellery company, which records and interviews reveal was led by a team recruited from Boston Consulting. They ran it into the ground. Under their watch, millions of dollars in Angolan state funds helped finance the annual parties on the French Riviera.

When Boston Consulting and McKinsey signed on to help restructure Sonangol, Angola’s state oil business, they agreed to be paid in an unusual way — not by the government but through a Maltese company Ms. dos Santos owned. Then her father put her in charge of Sonangol, and the government payments soared, routed through another offshore company, this one owned by a friend of hers.

PricewaterhouseCoopers, now called PwC, acted as her accountant, consultant and tax adviser, working with at least 20 companies controlled by her or her husband. Yet there were obvious red flags as Angolan state money went unaccounted for, according to money-laundering experts and forensic accountants who reviewed the newly obtained documents.

When the Western advisory firms came into Angola almost two decades ago, they were viewed by the global financial community as a force for good: bringing professionalism and higher standards to a former Portuguese colony ravaged by years of civil war. But ultimately they took the money and did what their clients asked, said Ricardo Soares de Oliveira, an international politics professor at Oxford who studies Angola.

“They are there as all-purpose providers of whatever these elites are trying to do,” he said. “They have no moral status — they are what you make of them.”

Now, more than two years after her father stepped down after 38 years as Angola’s strongman president, Ms. dos Santos is in trouble.

Last month, an Angolan court froze her assets in the country as part of a corruption investigation, along with her husband’s and those of a Portuguese business associate. The Angolan attorney general claimed the couple were responsible for more than $1 billion in lost state funds, with particular focus on De Grisogono and Sonangol.

Ms. dos Santos and her husband could face years in prison if convicted, according to the office of Angola’s president, João Lourenço. At the heart of the inquiry: $38 million in payments from Sonangol to a Dubai shell company hours after Angola’s new president announced her firing. Ms. dos Santos’s half brother is also facing corruption charges for helping to transfer $500 million from Angola’s sovereign wealth fund. The asset freeze came soon after I.C.I.J. reporting partners asked the government about transactions in the documents.

In an interview with the BBC, Ms. dos Santos, 46, denied any wrongdoing and called the inquiry a “political persecution.” “My companies are funded privately, we work with commercial banks, our holdings are private holdings,” she said.

Her husband, Sindika Dokolo, 47, suggested the new government was scapegoating them. “It does not attack the agents of public companies accused of embezzlement, just a family operating in the private sector,” he told Radio France Internationale, another I.C.I.J. partner.

Global banks including Citigroup and Deutsche Bank, bound by strict rules about politically connected clients, largely declined to work with the family in recent years, the documents show.

“These guys hear about Isabel and they run like the Devil from the cross,” Eduardo Sequeira, head of corporate finance for Fidequity, a Portuguese firm that manages many of Ms. dos Santos’s companies, wrote in a 2014 email after the Spanish bank Santander turned down work with her.

Consulting companies, far less regulated than banks, readily embraced her business. American advisory firms market their expertise in bringing best practices to clients around the world. But in their quest for fees, several have worked for authoritarian or corrupt regimes in places like China or Saudi Arabia. McKinsey’s business in South Africa was decimated by its partnership with a subcontractor tied to a political scandal that took down the country’s president.

The new leaks show the pattern repeating itself in Angola, where invoices point to tens of millions of dollars going to the firms. They agreed to be paid for Angolan government work by shell companies — tied to Ms. dos Santos and her associates — that were in offshore locations long used to avoid taxes, hide illicit wealth and launder money. The arrangement allowed her to keep a large portion of the state funds, the records show.

(The documents, called the Luanda Leaks after the Angolan capital, include emails, slide presentations, invoices and contracts. They came to the I.C.I.J. through the Platform to Protect Whistleblowers in Africa, a Paris-based advocacy and legal group.)

PwC, based in London, said it was investigating its dealings with Ms. dos Santos and would stop working with her family. Boston Consulting said it took steps, when hired, “to ensure compliance with established policies and avoid corruption and other risks.” McKinsey called the allegations against Ms. dos Santos “concerning,” and said it wasn’t doing any work now with her or her companies.

‘Shadow Management’

De Grisogono, an upstart Swiss jewellery company, was on life support. Its business had never fully recovered from the global financial crisis, and by 2012, it was deeply in debt.

Mr. Dokolo, Ms. dos Santos’s husband, seemed to offer a way out. He teamed up with Sodiam, the Angolan state diamond marketer, in a 50-50 venture set up in Malta that took over the jeweller. The state enterprise eventually pumped more than $120 million into the business, acquiring equity and buying off debt, the records indicate. Documents show that shortly after the acquisition, Mr. Dokolo put in $4 million, an amount he had gotten from a “success fee” — drawn from the Sodiam money and shunted through a shell company in the British Virgin Islands — for closing the deal.

Mr. Dokolo, through his law firm, said he had initially invested $115 million and “has subsequently invested significantly more into the business,” but that could not be verified in the documents.

Flush with Angolan government money, the Geneva jeweller hired the Boston Consulting Group, an American management company with offices in more than 50 countries.

In 2012, according to the documents, a Lisbon-based team at the firm took a central role in helping to run De Grisogono — “shadow management” as John Leitão, a Boston Consulting employee who would become the jeweller’s chief executive, said in a November interview in Lisbon.

The consulting firm, however, said its employees worked only on three specific projects, ending its involvement in early 2013.

By that year, the consultants had started leaving the firm to join the jeweller, eventually occupying the positions of chairman, chief financial officer and chief operating officer alongside Mr. Leitão.

He said in the interview that the consultants had inherited “a total mess.” But under his watch, the company, with boutiques in London, New York and Paris, went deeper into the red, despite an initial uptick in sales, documents show.

De Grisogono had a run of bad luck, including economic pressures affecting Russian oligarchs and Saudi sheikhs who had been big customers, Mr. Leitão said. Yet many rich patrons, including Ms. dos Santos and her husband, would take jewellery and wristwatches without paying for them up front, the documents show. Marketing expenses also shot up — 42 percent during Mr. Leitão’s first year to $1.7 million, with the increase going to the Cannes party, according to an internal presentation.

Mr. Dokolo was unapologetic about spending big on parties. “You tell me what major luxury brand spends less than this on promotion to become a global brand,” he told the French radio service. In an interview with BBC, Ms. dos Santos said she was not a stakeholder in De Grisogono, though several emails and documents call that into question, indicating she had an ownership interest in the Maltese companies controlling it.

The jeweller gave the couple an ability to better market Angolan diamonds. Mr. Dokolo already controlled the rights to more than 45 percent of the country’s diamond sales through a company that bought uncut gems, generating hundreds of millions of dollars in income, according to the Angolan president’s office.

Mr. Dokolo’s lawyers said he aimed to integrate the country’s diamond industry, “from mining to polishing to retail sales.”

The Angolan people did more than pay dearly for a European jewellery company. They paid with money borrowed at a 9 percent annual interest rate from Banco BIC, an Angolan lender where Ms. dos Santos owns a 42.5 percent stake. The government will have to repay some $225 million, according to the Angolan president’s office. The loans had been guaranteed by Ms. dos Santos’s father.

For all the money it put in, Sodiam never exercised any management control of the jeweller and never recouped any of its investment. Now, Sodiam officials want out, and the business is for sale.

“It is strange,” said Eugenio Bravo da Rosa, Sodiam’s new chairman, speaking of the man he replaced, who had signed off on the investment. “I can’t believe a person would start a business and let its partner run the business with total power to make all the decisions.”

Striking Oil

In 2016, Sonangol, Angola’s state oil company, was in crisis after a drop in market prices. One former Boston Consulting employee described a company in an “absolutely chaotic” state. The Angolan president fired the company’s board and appointed his daughter, Ms. dos Santos, as chairwoman that June. Boston Consulting was helping Sonangol come up with a “road map” to restructure.

Ms. dos Santos had a history with the company. A decade earlier, she and her husband made millions partnering with Sonangol and a Portuguese businessman to invest in a Lisbon gas company, Galp Energia. Their stake came courtesy of the Angolan government — through an $84 million loan from Sonangol, documents show. Their share in Galp is now worth about $800 million.

The former Boston Consulting employee, speaking on the condition of anonymity, said that Ms. dos Santos — the president’s eldest child — was able to get things done that other executives could not because she wasn’t susceptible to pressure.

“We’re very committed to transparency,” Ms. dos Santos told Reuters at the time. “We’re very committed to improving our profits at Sonangol and to improving our organization.”

But transparency went only so far. More than half a year before she was named chairwoman, her father signed off on a decree drafted at the couple’s law firm, records show, that led to the awarding of $9.3 million to a Maltese company to oversee Sonangol’s restructuring. The business, Wise Intelligence Solutions, was owned by the couple and run by a close associate, Mário Leite da Silva, De Grisogono’s former chairman. Boston Consulting came on board, followed by McKinsey, with the Maltese firm acting as their manager.

Boston Consulting and other advisers billed for only about half of what Wise received from the Angolan treasury, receipts and invoices show, even though the Maltese company had only limited expertise of its own. Wise “does not have the human resources and specific know-how,” its Maltese accountant said in a March 2016 email. Ms. dos Santos disputed this, with her law firm saying Wise had “technical expertise.”

After she took charge of Sonangol, the payments to the offshore companies would surge even higher.

In May 2017, Wise was replaced as project manager by a company in Dubai owned by one of her friends. It issued a flurry of invoices later that year, some with the barest of details. One of them, simply marked “Expenses May-September 2017,” carried a charge of more than 470,000 euros (over $520,000). These invoices account for the $38 million Sonangol paid to the Dubai company in the hours after Ms. dos Santos was fired on Nov. 15, 2017.

The Sonangol account was with the Portuguese arm of Banco BIC, where she was the biggest shareholder. Shunned by global banks, the couple increasingly relied on the Angolan lender, which has a big office in Lisbon steps from her apartment. In 2015, Portuguese regulators said the bank had failed to monitor money flowing from Angola to European companies linked to her and her associates, concluding that the lender lacked internal controls.

“Paying huge and dubious consulting fees to anonymous companies in secrecy jurisdictions is a standard trick that should sound all alarm bells,” said Christoph Trautvetter, a forensic accountant based in Berlin who worked as an investigator for KPMG, a global business advisory firm.

Days before the invoices were issued, the Sonangol executive who would have approved them was fired, replaced by a relative of Ms. dos Santos, the documents show. The managing director of the Dubai company, Matter Business Solutions DMCC, was her frequent associate Mr. da Silva.

Months later, Carlos Saturnino, Ms. dos Santos’s successor as Sonangol’s head, publicly accused her of mismanagement, saying her tenure was marked by conflicts of interest, tax avoidance and excessive reliance on consultants. He also said she had approved $135 million in consulting fees, with most of that going to the Dubai shell company.

“We have there some situations of money laundering, some of them of doing business with herself,” Hélder Pitta Grós, Angola’s attorney general, said in an interview with I.C.I.J. partners.

Ms. dos Santos, speaking with the BBC, said the Dubai company supervised work for Sonangol by Boston Consulting, McKinsey, PwC and several other Western firms. When asked about the invoices, she said she was unfamiliar with them but insisted the expenses were legitimate, charged at “the standard rate” under a contract approved by Sonangol’s board.

“This work was extraordinarily important,” she added, saying that Sonangol cut its costs by 40 percent.

Her lawyers said the $38 million was “for services that had already been provided and delivered by consultants in accordance with the contract.”

By late 2017, Boston Consulting was winding down its work on the project, which ended that November. McKinsey and PwC declined to comment.

The consultants’ involvement with Ms. dos Santos extended far beyond the Swiss jeweller and Sonangol. McKinsey, for example, provided advice on a Portuguese engineering firm she had just acquired and the Angolan mobile phone company where she served as chairwoman, documents show.

Two of the “big four” accounting firms, PwC and KPMG, did consulting work for Urbinveste, another thinly staffed company she owned that acted as a public works contractor in Angola. It oversaw projects — such as road and port design and urban redevelopment — worth hundreds of millions of dollars, some set to be financed with loans from Chinese banks and built by Chinese state-owned companies. KPMG also audited at least two companies she owned in the country. The firm said that in Angola, it performs “additional due diligence procedures” for all the businesses it audits.

The other two major accounting firms, Deloitte and Ernst & Young, now known as EY, did work for companies tied to her as well.

Accounting firms in the European Union, where much of Ms. dos Santos’s business empire was located, are bound by the same rules banks are, requiring them to report suspicious activity. One firm in particular, PwC, had a broad view into the inner workings of Ms. dos Santos’s empire.

The Accountant

Ms. dos Santos had a long history with PwC. In the early 1990s, fresh out of King’s College London, she took a job with Coopers & Lybrand, soon to merge to become PricewaterhouseCoopers.

Her top money manager, Mr. da Silva, whose assets in Angola were frozen last month, was also a PwC alum. And when Ms. dos Santos took over Sonangol, she brought in a PwC partner, Sarju Raikundalia, as its finance head. The payments to Dubai in November 2017 happened on his watch before he, too, was fired. Neither of the businessmen responded to requests for comment.

PwC not only audited the books of her far-flung shell companies, but also provided her and Mr. Dokolo’s companies with tax advice and did consulting work for Sonangol.

Like Boston Consulting, PwC was paid by Wise Intelligence for its Angola work, and it audited the financial statements of the Maltese holding companies that controlled the Swiss jeweller.

In 2014, PwC accountants in Malta had a problem. As they prepared annual financial statements for Victoria Limited, one of the Maltese companies that controlled De Grisogono, they wrote in a draft that the ultimate owners were Mr. Dokolo and the Angolan government. But Antonio Rodrigues, an executive at Fidequity, objected — the couple had been facing increasing media scrutiny after a 2013 Forbes article examined the origins of their wealth. Such information, he wrote, should not “be mentioned.”

“Noted — we will discuss internally and revert,” a PwC accountant replied. The language was removed.

PwC accountants also noticed there was no paperwork to account for millions of dollars in loans being pumped into the Maltese holding companies and De Grisogono, according to emails.

Robert Mazur, who was an anti-money-laundering investigator for the United States Customs Service, reviewed the PwC financial statements at the I.C.I.J.’s request, along with email exchanges between the accountants and Ms. dos Santos’s money managers.

“The accountants and financial service providers involved in these transactions should have seriously considered filing a suspicious transaction report,” he said.

When presented with the I.C.I.J.’s findings, PwC said it would not comment on specific projects, citing client confidentiality, but said it was ending its work with Ms. dos Santos. “In response to the very serious and concerning allegations that have been raised,” the firm said, “we immediately initiated an investigation and are working to thoroughly evaluate the facts and conclude our inquiry.”

As for Ms. dos Santos’s assets, the bulk of her fortune is now outside Angola, much of it in tax and secrecy havens where it will be hard to pry loose.

Ana Gomes, a former European Parliament member, filed a complaint in November in Portugal alleging that Ms. dos Santos laundered money through Banco BIC. Ms. Gomes said that the network of professional service firms had enabled Ms. dos Santos to move her money out of Angola and into legitimate businesses in Europe and elsewhere.

“They are part of a system of finding the safest landing for all the assets that are siphoned off,” she said.

KYRA GURNEY, SCILLA ALECCI and BEN HALLMAN are reporters for the International Consortium of Investigative Journalists, based in Washington.

A version of this article appears in print on Jan. 20, 2020, Section A, Page 1 of the New York edition with the headline: Earning Riches By Exploiting A Poor Nation. Order Reprints | Today’s Paper | Subscribe


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by Kudzai Chinoda -


09/03/2020 02:46:00 BY ASHMOND NZIMA

MBABANE – The Eswatini trade ‘misinvoicing’ gap averaged E4.2 billion (US$268.4 million) from 2008 to 2017 (10 years), according to a report by Global Financial Integrity (GFI).

The report titled ‘Trade-related illicit financial flows in 135 developing countries 2008-2017’ was released on March 4, 2020 (last Wednesday).

It focuses on trade-related misinvoicing, one of the largest components of illicit financial flows (IFFs) among the 135 developing countries and 36 advanced economies. Trade misinvoicing refers to one party (the importer or exporter) deliberately falsifying the price, quantity or quality of goods being imported or exported, and in this way, illicitly transferring the difference, which may involve money laundering, customs duty evasion, and tax evasion.

Export under-invoicing can also be used to shift money abroad, evade income taxes and export taxes. Illicit financial flows pertain to illicit activity, and do not include tax avoidance. ‘Trade-related’ illicit financial flows may include the illegal drug trade, illicit arms deals, and the laundering of dirty money.

The report found that on average, over 10 years, the average rate of trade misinvoicing for the country as a percent of total trade with all its global trading partners was 21.9 per cent.

“This is the value that has been illicitly moved through Eswatini’s trade, and as a result, has not been properly taxed by the respective authorities,” reads the report in part.

Meanwhile, the countries included in the report are based on the International Monetary Fund (IMF) classification system, which is comprised of 148 developing countries and 36 advanced economies. However, 13 of the developing countries did not report sufficient trade data to the United Nations to be included in the analysis.


“In order to identify a country’s imports/exports that may have been misinvoiced, Global Financial Integrity (GFI) conducts a value gap analysis by examining data submitted by governments each year to the United Nations Comtrade database and applying a series of filters to ensure unmatched trades are omitted. GFI then uses a partner-country analysis to compare and contrast the differences between any set of two countries in order to identify value gaps, or mismatches, in the reported data,” reads the report.

The report demonstrates that trade misinvoicing continues to be a major drain on domestic tax bases in developing countries, undermining efforts to mobilise domestic resources to meet the UN 2030 Sustainable Development Goals (SDGs) and other long-term national development initiatives.


“While the estimates of trade misinvoicing may not be exact, the numbers illustrate the orders of magnitude of the problem, which clearly underscores the reality that this phenomenon is a major global problem. The data indicates that trade misinvoicing has been a persistent challenge across most countries over the 10-year period examined.”

The data also shows the problem is universal in nature – there are large degrees of trade misinvoicing between both advanced and developing economies.
“It is important to note, however, that trade misinvoicing has a far greater negative impact on the finances of developing economies.

“In other words, trade misinvoicing constitutes one the world’s most serious global challenges for successfully achieving the SDGs across developing countries,” highlighted the report.

Developing and advanced economy governments alike, according to the report, both have a responsibility to curtail trade misinvoicing in particular, and illicit financial flows in general, as these practices undermine the economic and national security of all nations, not just developing ones.

No immediate comment could be sourced from Eswatini Revenue Authority (SRA) Director Communications Vusie Dlamini as he was reported out of office when a questionnaire was sent on Friday.
A local economic expert has concurred with the report that the estimated potential lost tax revenue from trade misinvoicing can approach billions of dollars per year for developing countries – depriving them of desperately needed financial resources that could otherwise have been directed at scaling up public investment for national economic development and poverty reduction.
Meanwhile, through the same challenge, according to the report; neighbouring South Africa is losing R300 billion annually. The average size of the value gap between sub-Saharan Africa and the 36 advanced economies is US$27.2 billion (about E426.3 billion).

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African Prosecutor’s Association and United Nations Office on Drugs and Crime hold a joint Conference on Combating Transnational Organised Crime through Asset Forfeiture

by Kudzai Chinoda -

African Prosecutor’s Association and United Nations Office on Drugs and Crime hold a joint Conference on Combating Transnational Organised Crime through Asset Forfeiture

PRETORIA, 6 February 2020 – A three-day high-level combating transnational organised crime and enhancing asset forfeiture conference jointly organised by the UN Office of Drugs and Crime in Southern Africa and the African Prosecutors Association, in co-operation with UK Department For International Development and United States, International Narcotics Law Programmes was concluded in Pretoria. This workshop was part of a bigger initiative that included the deployment of mentors, national and regional workshops and the development of training manuals. Together, all of these initiatives are aimed to help  to achieve the 2030 Agenda advancing the targets and indicators of SDG 1, SDG 8, SDG12, SDG14 and 15. This workshop also addressed SDG 16 and 16.4 that deals with Illicit Financial Flows.

More than 45 representatives from 16 Member States, international and regional organizations, discussed and shared experiences on different approaches to combat the challenges posed by transnational organised crimes using asset forfeiture.  

Ms. Zhuldyz Akisheva representative of the UNODC Southern Africa delivered her opening remarks in the presence of Ben Llewelyn-Jones, the Deputy British High Commissioner to South Africa,  Ms Shamilla Batohi, the National Director of Public Prosecutions for South Africa, Counsellor George Saad, Deputy Prosecutor General of Egypt also the current President of African Prosecutors Association and David Bargueno, a representative from the US Embassy in South Africa.  

Ms. Shamila Batohi thanked the African Prosecutors Association and the UNODC for co-organizing the conference in cooperation with the UK DFID and INL. She also praised those who contributed to the success of this landmark conference through their leadership, participation and financial contributions.

The conference was a follow-up to the MoU agreement signed between APA and UNODC in Angola in November 2016. It was also part of a wider initiative to give a new push to multilateral co-operation in addressing the ever-evolving threat of transnational organised crime especially wildlife crime.

The conference emphasized the need to engage proactively with International and regional networks and partner organizations who provide platforms that can complement and facilitate cooperation prior to the mutual legal assistance process. These entities provide FIUs and law enforcement agencies with informal contact points from other member jurisdictions. 

The conference stressed the need to further strengthen international, regional and bilateral efforts to combat transnational organised crime through cooperation that is based on international law.

Conference participants underscored the need to put measures in place for public prosecution authorities and law enforcement entities to collaborate with their counterparts. They also emphasised the need to use the international, regional and bilateral cooperation instruments for sharing information and facilitating forfeiture and recovery of assets. The participants highlighted the need to use special procedures for the facilitation of the forfeiture of assets. It was recommended that tools such as rapid freezing powers, non-conviction based forfeiture, reversal of burden of proof, illicit enrichment provisions, unexplained wealth orders and civil remedies that have already been developed and successfully used by various jurisdictions in the region to secure and confiscate illicitly acquired assets are employed wherever possible.

Participants also called for innovative and efficient means of delivering training and identified training tools such as e-learning for enhancing asset forfeiture.  

Finally, participants agreed that elements of this conference will feed into the African Prosecutor’s Association Annual General Meeting, to be held in Egypt later this year. UNODC and APA reiterated their readiness to strengthen cooperation to combat transnational wildlife crimes. Participants acknowledged that there are existing initiatives to combat wildlife crime and that the UNODC was ready to support Member States through all-of-UN approaches. This would be in collaboration with partners, such as INL, DFID and the private sector to address the particularly challenging issues related to transnational organised crimes and asset forfeiture related to wildlife crime.

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Leaks Show Large Firms Aided Dos Santos’ Offshore Empire

by Kudzai Chinoda -

Leaks Show Large Firms Aided Dos Santos' Offshore Empire

Published Tuesday, 21 January 2020
Written by Eli Moskowitz

A trove of 715,000 leaked emails, charts, contracts, and audits details how the daughter of the former Angolese president Isabel dos Santos, reportedly Africa’s richest woman, managed to amass and shield her US$2 billion fortune with the help of western consulting and accounting firms. 

Leaks show that western firms earned millions through dos Santos' offshore empire

Boston Consulting Group, Price Waterhouse Cooper, PwC, McKinsey & Company, and Accenture provided financial services to dos Santos and her husband, Sindika Dokolo, a high-profile Congolese businessman and art collector, that allowed them to safeguard their fortune abroad. 

Dos Santos has shares in multiple Angolan state banks and companies such as the telecommunication company Unitel. The couple has built an empire of over 400 companies and subsidiaries, operating in over 94 financial secrecy jurisdictions such as Malta, Mauritius and Hong Kong.  

Critics say that Dos Santos and her husband have been syphoning mostly natural resources of one of the world’s poorest countries where two-thirds of the country’s population survives on less than $2, while the government now says that dos Santos and her husband owe the state over $1 billion.   

Documents reveal that PwC was perhaps the worst perpetrator in assisting the couple with their offshore companies. They found that firms such as PwC continued to provide services despite the fact that other banks had rejected them and regulators had flagged customers matching this profile.  

“It’s not exactly our finest hour,'' Bob Moritz, Chairman of the PwC Network said at the

following the release of the Luanda Leaks.

He assured summit participants that the company had already severed ties with dos Santos and that it would work “with speed” to make sure that incidents like these would not occur in the future.

The files, dubbed the ‘Luanda Leaks’, were acquired by the anti-corruption charity Platform to Protect Whistleblowers in Africa, PPLAAF, which then shared them with the International Consortium of Investigative Journalists, ICIJ, a high profile organization perhaps most well-known for its publication of the Panama Papers, which went on to release the documents  publicly on Sunday. 

Over 120 journalists from 37 media outlets that include the New York Times, the Guardian, the BBC, French newspaper Le Monde, and Portuguese newspaper Expresso, collaborated to review the documents disseminated in the leak, which spans between 1980 and 2018.

The leaks coincide with a recent Transparency International analysis that show over 400 cases in which hundreds of professional advisors and accountants have provided services to financial criminals that have amounted to a total of $412 billion in the UK alone.  

“Without the assistance of these people, these corruption schemes and the money laundering that flows from that would be unable to happen.” Ben Cowduck, of the UK chapter of Transparency International, told ICIJ.  

“It’s a fabulous set of revelations which I’m absolutely delighted by” said Nicholas Shaxon, who has written extensively on the offshore industry, in an interview for

On one hand there is the traditional story of corruption in Africa, “which, of course, we hate,” but on the other we have the less familiar story of how the money is taken from the west by large financial firms who are “helping capital flight, helping the draining and the looting of Africa.”

Read More:

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AML: A Shocking $8.14 billion of fines handed out in 2019

by Kudzai Chinoda -

AML: A Shocking $8.14 billion of fines handed out in 2019

By thefintechtimes January 15, 2020

A shocking $8.14 billion of fines for AML handed out in 2019, with USA and UK leading the charge. 

Encompass Corporation, a fast-growing provider of intelligently automated Know Your Customer (KYC) solutions, has carried out an analysis of Anti-Money Laundering (AML) related penalties handed down between 1 January and 31 December 2019.

Key observations: 

  • 58 AML penalties handed down globally in 2019, totalling $8.14bn 
  • This is double the amount, and nearly double the value, of penalties handed out in 2018, when 29 fines of $4.27bn were imposed 
  • Regulators in the USA were most active, handing out 25 penalties totalling $2.29bn 
  • UK followed with 12 fines totalling $388.4m 
  • Largest monetary fine was $5.1bn and originated from France 
  • Average monetary fine for 2019 was $145.33m 
  • 2019 was record year, in terms of number of penalties handed out (58), ahead of 2016 (47) 
  • Under half of penalties given out in 2019 were to banks (28 of 58), compared to two-thirds in 2018 (20 of 29) 
  • Penalties handed down by regulators across multiple jurisdictions beyond the USA and UK: these were Belgium, Bermuda, France, Germany, Hong Kong, India, Ireland, Latvia, Lithuania, the Netherlands, Norway and Tanzania 

2014 still holds the record for the highest total value of fines at $10.89bn, but this includes an anomalously large penalty of $8.9bn. If this were to be removed, 2019 would take the lead.

Wayne Johnson, Co-Founder and CEO of Encompass Corporation

Wayne Johnson, Co-Founder and CEO of Encompass Corporation commented:

“Since 2015, annual AML penalty figures have been steadily rising each year. Multi-million dollar fines have been commonplace for a while, but we are now seeing more penalties of one billion dollars or over, with two in 2019 alone. 

Historically, the majority of these fines have been given to banks, but this year the proportion was less than half, demonstrating that money laundering is now recognised as a general business issue, not just one that is specific to financial services. Regulators in the gambling/gaming sector were particularly active in 2019, handing out five fines, all of which were well over $1 million and the highest being $7.2 million. Interestingly, four of these were in the UK, demonstrating a crackdown here. 

The USA continues to lead the way, having handed out the most penalties this year at 25 – more than twice the amount of the UK, the country in second place. Given that these two countries have transparent regulatory cultures and active regulatory bodies, we expect we shall continue to see the largest number of fines originate from here, but we are seeing activity from increasing numbers of jurisdictions as time goes on. For example, in 2019, penalties were handed out by 14 countries, compared to just three a decade ago in 2009. 

We are not expecting the spotlight on money laundering to dim. The continued and increased focus on this area highlights the severity with which it is viewed at a global level, which is not surprising given the negative economic and societal repercussions it can have. As we head into 2020, we shall continue to monitor and analyse AML penalty data with interest to see how it evolves.” 

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