‘Gold mafia’ case exposes Africa’s smuggling crisis

In an otherwise anonymous court room in Pretoria, acting judge Waheeda Amien delivered a serious blow to gold dealer Andries Greyvensteyn, a man depicted as a central pillar in Southern Africa’s “gold-mining mafia”, in February.

If you have no idea who Greyvensteyn is, let alone why he is supposedly one of the masterminds of an illegal gold-smuggling operation, you’re not alone. 

The softly-spoken 41-year-old opened a small gold-trading business, called Gold Kid Trading, in 2006 in Springs, an industrial area on Joburg’s hard-nosed East Rand. For years, he managed to avoid the spotlight completely. 

But a series of court skirmishes with the South African Revenue Service (Sars), along with a starring role in a 2023 Al Jazeera documentary titled Gold Mafia, has made it increasingly hard for Greyvensteyn to avoid the headlines.

The first rumblings arose a decade ago, when the priority crimes unit, the Hawks, raided 18 properties, including The Gold Kid’s refinery and three homes in Springs, seizing 48kg of gold, worth R20m. “This is huge, these are really organised syndicates that we are dealing with,” Hawks spokesperson Hangwani Mulaudzi told News24 at the time.

Then in 2021, in a case which went largely unnoticed, Greyvensteyn was convicted for “illegal dealing and illegal possession of unwrought precious metals”. Described by police as a “major role player in the gold refining industry in Gauteng”, Greyvensteyn was sentenced to a fine of R150,000 or five years imprisonment, of which half was suspended.

Yet, if you believe the claims made by Sars in the Pretoria high court case before Amien, you’d think that conviction had made no difference whatsoever. 

In court documents, the tax authority argued that Greyvensteyn’s Gold Kid had been laundering illicit gold and dirty money through its accounts for years.

Greyvensteyn denied this, arguing that all the gold he refined was legitimately obtained, including old jewellery, which was then smelted into bars and on-sold to customers in Dubai and elsewhere. He produced invoices from his suppliers too.

Sars was having none of it. These invoices were unsubtle forgeries, it said.

In one such instance of alleged crookery, Sars said Gold Kid bought VAT-exempt gold Krugerrands, melted them down, and then illegally claimed VAT refunds on the unwrought gold – a scheme that Greyvensteyn denied.

But if that was the background, the issue before Amien was a crisp one. A year before, in February 2024, Sars had obtained an order freezing all his assets under the Tax Administration Act based on all these alleged shenanigans.

Greyvensteyn wanted this freezing order lifted, saying it prevented him from leaving the country or earning a living –  asking the court to declare those sections of the Tax Administration Act that allowed this “unconstitutional”.

In her ruling, Amien agreed that this would indeed limit his right to earn a living and move freely, but she said this is justifiable under the circumstances. 

“Given the allegations of fraudulent trade on the part of [Gold Kid Trading], seizure of [Greyvensteyn’s] foreign assets and a limit on his trade and ability to travel seems appropriate,” she said.

The upshot of that ruling is that it confirms the tax authority has the right to seize his overseas assets, his company holdings and his passport, pending a R3bn tax claim tied to the alleged gold-trading racket.

Record highs

For critics, Amien’s ruling is a sign that the courts are finally getting serious about stemming the rise in illegal gold trading. 

With the price of gold now at record highs of more than $3,300 an ounce – having risen by 45% over a year – there is much riding on whether the authorities can get a grip on smuggling, says Karam Singh, a consultant to non-profit group Corruption Watch.

“It’s immensely frustrating. We’ve seen so much exposed by investigative journalists about gold smuggling with the expectation that something would happen to stop it, but it’s almost like no-one is paying attention,” he says.

For Singh, it speaks to deep-seated capacity issues. “The deeper issue is that there seems to be a problem across the continuum of our law enforcement authorities, from the detection, to the investigation and prosecution of gold smuggling. And there are no easy answers in fixing this,” he adds.

But the imperative to address this has been heightened by the alarming trajectory of gold-smuggling incidents. 

An investigation by the Switzerland-based SwissAid found that about 435 tonnes of African gold – worth more than $30bn – were smuggled off the continent in 2022. And these incidents had more than doubled from a decade earlier.

South Africa’s own statistics reveal disturbing discrepancies: the country exported 230 tonnes of gold in 2022, despite local production totalling just 103 tonnes, according to SwissAid. Imports reported by other countries into South Africa amounted to 138 tonnes.

The gaps arise partly because South Africa does not classify imported gold for refining and re-exporting as “official imports”; as a result, illicit gold can move through legitimate supply chains almost undetected.

The Global Initiative Against Transnational Organised Crime estimates that up to 30 tonnes of unlawful gold pass through South Africa annually, generating about $2bn for syndicates exploiting this opacity.

The Greyvensteyn case is one of the few instances where the door has been opened to reveal how the supply chain works, shining a light on how South Africa’s ageing gold infrastructure, once the engine of its economy, has become a gateway for the continent’s booming illicit gold trade.

Numerous court documents, as well as interviews with investigators and corruption experts, lay bare the systemic weaknesses that allow this. 

The problem begins with illegal miners – mostly undocumented foreigners from Zimbabwe, Mozambique, and Lesotho – who risk their lives entering abandoned mines in South Africa in search of leftover traces of gold.

“If you’re able to manage that,” says Peter Bishop, a former member of the Special Investigating Unit, “you will make a huge dent in the illicit trading of gold from a South African point of view.”

The supply chain is, by now, well-entrenched too.

First, violent criminal gangs oversee the operations, moving the precious metal to buyers, including licensed dealers who exploit regulatory loopholes. Then, the gold passes to exporters using front companies, such as scrap metal and second-hand dealers, before reaching largely unregulated international intermediaries and refiners.

While work has been done to improve border controls, corruption is pervasive and results in many undocumented foreigners, when they are caught on illegal mines, simply returning to the country and picking up where they left off. 

“It’s a massive problem,” Bishop tells Currency. “South Africa is known as the gold rush for the rest of Africa because there are so many abandoned mines.”

The UN Office on Drugs and Crime warns that porous border posts, particularly at Beitbridge between South Africa and Zimbabwe, and Komatipoort between South Africa and Mozambique, undermine regional efforts to stem gold smuggling.

Most of the 6,100 abandoned and ownerless mines, vacated decades ago, before environmental and mining laws existed, have become a state liability and are now overseen by the government because there are no longer legally accountable owners to enforce rehabilitation.

But it doesn’t end there. Even mines still owned by the private sector are looted because of corruption, lax oversight by regulators, or poor controls by companies.

“They plug these shafts, but these guys just keep on opening them,” says Bishop. Shafts are scattered all over the country, and underground tunnels are linked for kilometres on end, making it difficult to police.

The zama zamas brave treacherous environments with little or no safety gear, frequently poisonous gases and sudden flooding. They work underground for weeks, even months on end. 

Efforts to crack down on zama zamas have had mixed results, too.

Operation Vala Umgodi, a police-led initiative launched in late 2023 to “close the hole”, led to more than 20,000 arrests and the seizure of millions in cash, weapons and mining equipment.

Yet the humanitarian cost of “closing the hole” and starving out illegal miners has been immense. At the derelict Buffelsfontein mine in Stilfontein, which is majority controlled by a Chinese company, hundreds of zama zamas refused to surface even after food and water supplies were cut off, resulting in the recovery of at least 87 bodies.

This illustrates that stamping out illegal gold mining won’t be as easy – or as uncomplicated – as many would wish.

Interlinked weakness

Greyvensteyn, for better or worse, has become the poster child for this battle. 

For his part, he maintains that he is entirely innocent of the charges and that he is simply collateral damage in a wider bid by the authorities to nail others. He has never “knowingly” participated in any money-laundering scheme – a specific use of words.

Approached for comment, Greyvensteyn’s lawyers said they could not speak as they were preparing further documents to challenge Sars in court. 

However, those close to him say he has been unfairly painted as instrumental to the gold mining “mafia”, rather than someone who was perhaps “too trusting” of others, including Zimbabwean businessman Simon Rudland and Joburg businessman Mohamed “Mo Dollars” Khan.

Yet in the Al Jazeera documentary, Greyvensteyn was depicted as a crucial limb of a sprawling network smuggling gold from Zimbabwe to Dubai via South Africa, alongside Rudland, Dubai dealer Howard Baker and Khan – all of whom denied wrongdoing.

The central allegation was that Rudland financed gold purchases through Zimbabwe’s Fidelity Printers and Refiners, while Baker’s Aulion Global Trading in Dubai and Rappa Resources in South Africa handled processing and onward sales. Greyvensteyn reportedly oversaw local operations through Gold Kid and a US entity, Liberty Gold.

It was a messy business that also entangled South Africa’s banking sector, previously thought of as a vanguard of exemplary corporate governance.

Sars has now claimed R4.87bn in damages from Sasfin Bank, arguing that it helped launder R8.2bn in dirty money offshore for a decade in transactions linked to this wider smuggling network, mostly linked to Rudland.

Sasfin partly fessed up. It admitted that “a group of Sasfin employees in the foreign exchange business unit had colluded with the implicated clients to enable the circumvention of exchange control and anti-money-laundering regulations, as well as to subvert our system of internal controls”. 

It said all these bankers had been fired, and criminal cases opened.

Nonetheless, the bank is defending the lawsuit, saying it “falls outside the recognised parameters of applicable law and has a very remote likelihood of success”.

This is a significant case, representing the first time a major bank has been implicated to this extent in cross-border money-laundering. 

For Corruption Watch, the lack of arrests for this gold and tobacco smuggling is a serious problem – particularly as this case represents a “serious threat to South Africa’s financial system” with role players “involved in all spheres of society”.

As it is, South Africa’s prosecutorial weaknesses have drawn international scrutiny. 

The Financial Action Task Force (FATF) greylisted South Africa in 2023, citing failures to prosecute money-laundering and enforce financial crime laws. What happens in this smuggling case will be a key indicator of whether the country is on the right track.

Greyvensteyn might be the most high-profile case, but the courts are full of similar stories – all of which speak to the difficultly in tackling gold smuggling.

In Welkom, a mining town established in the 1940s, authorities have now seized three properties, six luxury vehicles and hundreds of thousands of rand from George Lekulo, an alleged illegal mining kingpin with prior gold-related convictions.

And, on a roadside near Kroonstad, police in 2021 intercepted a Volkswagen Polo packed with R1.4m in cash hidden in a green carrier bag. The suspects admitted under questioning that the funds came from illegal gold sales in Gauteng. 

More such cases are likely to come to the courts, as the record-high gold price is likely to spur illicit activity. 

As it is, gold is the sixth most traded product globally, accounting for 2.54% of world trade in 2023, according to the Observatory of Economic Complexity. Africa’s share – much of it off the books – is a growing concern for regulators.

The issue isn’t only an African one, says Bishop, who has more than 25 years of experience investigating smuggling networks and earned recognition as an expert by the UN Office on Drugs and Crime. 

“We can have the best laws, but if the rest of the world, where our product is going to, is not enforcing it, we’ll never stop it,” he says. 

South Africa, with a cash-strapped and technically ill-equipped police service, struggles at the best of times; when you consider that many countries on the continent have no laws against holding unwrought gold, the task becomes far harder.

Bishop says it is only recently that companies and countries have started taking the illicit trading of gold and other precious metals seriously, partly because this trade is being used to fund terrorism, and mines are losing money.

“It’s affecting the commercial environment because they’re stealing the mines rotten and losing product, tons of it at a time,” he says.

The legal battle with Greyvensteyn, provided it goes the distance, will be a strong barometer of whether South Africa’s regulators are up for the fight.