Dubai Investor Lost $2.5M In Alleged Fraud By Afriswiss Commodities

Kenya High Court freezes company’s bank account as gold trading scandal exposes country’s growing reputation as hub for precious metals scams

NAIROBI, Kenya — A Dubai-based gold trading company has lost an estimated $2.5 million in a sophisticated fraud scheme allegedly orchestrated by Kenyan precious metals dealer Afriswiss Commodities Ltd, according to court documents filed in the High Court of Kenya.

Justice Moses Ado of the High Court issued a preservation order on Monday, freezing at least $140,000 (approximately Ksh18 million) held in Afriswiss Commodities’ account at I&M Bank Kenya. The freezing order, which remains in effect until July 10, 2025, represents the latest in a series of high-profile gold fraud cases that have damaged Kenya’s reputation in international precious metals trading.

The Broken Promise

The case centers on a gold trading agreement signed on May 9, 2024, between SH Trading DMCC, a Dubai-based gold importing firm, and Afriswiss Commodities Ltd, a Nairobi-based precious metals trading company. The deal involved the shipment of 25 kilograms of gold from Kenya to Dubai’s flourishing commodities market.

SH Trading DMCC paid $118,000 in advance to cover costs such as government royalties, export taxes, insurance, smelting, customs handling and agency fees. However, according to court documents, no gold was ever delivered to the designated port despite the substantial advance payment.

Cord Kabus Dupree, the majority shareholder of SH Trading DMCC, alleged that Lynnwood Farr, CEO of Afriswiss Commodities, played a central role in executing the fraudulent agreement. Farr allegedly assured the Dubai firm of reliable gold supply and convinced them to wire funds to the company’s bank account while paying the balance in cash.

Government Officials Implicated

The case has raised serious concerns about the alleged involvement of Ministry of Mining officials in facilitating the introduction between the parties. According to Dupree’s testimony, SH Trading DMCC established operations in Kenya after being introduced to key industry players through ministry officials, which gave the firm confidence to pursue the transaction.

This connection to government officials mirrors patterns identified in previous gold fraud cases, where scammers leverage perceived government endorsement to build credibility with international buyers. The promise of quick riches is used to lure in unsuspecting marks, often westerners seeking to play out a modern rendition of the Scramble for Africa.

Admission of Guilt

In a significant development, Afriswiss Commodities has admitted to receiving $136,940, including interest, for gold that was never delivered. The company has also acknowledged causing the Dubai merchant an estimated business loss of $2.5 million, though this figure likely represents lost business opportunities rather than direct financial losses.

The admission suggests the company may not contest the basic facts of the case, potentially streamlining legal proceedings and recovery efforts.

Kenya’s Growing Gold Scam Crisis

The Afriswiss case highlights Kenya’s growing reputation as a hub for precious metals scams targeting international buyers. Recent court cases include: $546,000 (Sh70 million) fraud involving Dubai-based traders · $200,000 (Sh25.8 million) scam targeting Voltex Commercial Trading Limited · $1.2 million (Sh164 million) fraud against a British national · Multiple cases involving sums between Sh2 million and Sh51.6 million.

In April 2024, Congolese national Erick Kalala Mutendi was charged alongside three Kenyans for defrauding British national Tanner Caldwell of $1.2 million (Sh164 million) in a fake gold deal involving the purported sale of 2,820 kilograms of gold.

The proliferation of such cases has drawn international attention to Kenya’s precious metals sector, where legitimate mining operations coexist with sophisticated fraud schemes. Scammers in Kenya employ various tactics, including: Selling fake gold made from brass or other metals. Using counterfeit documents, such as fake mining permits. Setting up fraudulent companies that disappear after receiving payments.

Dubai’s Vulnerable Position

Dubai’s position as a major gold trading hub has made Dubai-based firms attractive targets for international fraud schemes. The Dubai Multi Commodities Centre (DMCC) serves as a key facilitator of international precious metals trade, but this prominence has also exposed UAE investors to sophisticated scams.

Recent fraud reports indicate that scammers approached Dubai investors in January 2024, claiming to run a successful gold trading business in Africa. Initial investments of AED 75,000 were made, with promises that gold bars would be shipped to Dubai within two weeks. However, they later demanded additional funds for documentation and other expenses.

Legal Ramifications

Kenneth Amondi, representing SH Trading DMCC, successfully argued for the asset preservation order, expressing concern that the Kenyan company might disown the deal and transfer funds before case conclusion. The freezing order is designed to ensure that recoverable assets remain available should the Dubai firm prevail in court.

The case is being heard at the Milimani Law Courts, which has become a frequent venue for international commercial disputes involving Kenyan companies and foreign investors.

Red Flags and Prevention

Legal experts recommend that foreign gold buyers verify that sellers hold valid licenses from the Ministry of Mining and are registered with the Registrar of Companies. They also advise demanding proper documentation including KRA PIN and business registration certificates.

Warning signs include scammers promising large quantities of gold that cannot be found in Kenya. For instance, a victim is being promised one tonne of gold at once at favourable prices. Kenya exports less than 500 kg of gold every year.

The proliferation of gold fraud cases involving UAE nationals has potential implications for Kenya-UAE trade relations. A recent case involving a rich Emirati highlights the power that Nairobi conmen can have and Kenya’s role as a smuggling route for gold from the eastern Democratic Republic of Congo.

The ongoing cases threaten to undermine legitimate business relationships between the two countries, as international investors become increasingly wary of engaging with Kenyan precious metals dealers.

What’s Next

The court is expected to issue further orders on July 10, 2025, which may include extending the asset freeze or providing directions for the main case proceedings. The case represents a critical test of Kenya’s legal system’s ability to address the growing gold fraud crisis and restore confidence in the country’s precious metals sector.

As the case proceeds, it serves as a stark reminder of the risks facing international investors in Kenya’s precious metals market and the urgent need for stronger regulatory oversight to prevent such sophisticated fraud schemes from targeting foreign buyers.

This is a developing story.