Fraudsters Denting Sierra Leone’s Sparkling Diamond Image

Sierra Leone is rich in diamond deposits. Part of the diamond industry are stories of foreigners losing thousands of Dollars to fraudsters who pose as diamond miners and dealers. With the growing spread of the internet, the fraudsters advertize themselves as owners of companies with licenses to buy diamonds and gold mostly on social media. It is not just money but these foreign investors in trying to buy diamonds from Sierra Leone sometimes end up losing their lives.
“It is rather unfortunate in that these transactions are done backdoor in a clandestine manner. Most times it is cyber related through social media, facebook etc,” Sheku Kamara, director of operations in the Criminal Investigations Department (CID) said. “What attracts the potential victim is the price they offer to them and the quantities.”

In 2005, a Canadian who came to buy diamonds on the invitation of a man claiming to be a diamond miner, was found dead with gun shot wounds in a hotel room in Kenema, the provincial capital of eastern Sierra Leone 302 kilometers from Freetown. A British national came in 2013 on the invitation of the same diamond miner. He flew back to the UK very sick without the diamonds he paid for. He died few days after he left Sierra Leone.
“I have seen instances in Sierra Leone that they [investors] have been so defrauded that they do not even have sufficient money to buy their tickets back home. We have had instances where drinks of investors have been mixed and they lost their memories and were flown back to their countries after being siphoned,” Lawyer Hindolo Ngevao said. He has over 10 years experience in dealing with criminal matters as a private practitioner.
“We continue to do our bit by informing the public that if they want to do business in minerals, they have to go through the Ministry of Mines and Mineral Resources and NMA [National Minerals Agency], Mr. Sheku Kamara said.
Annual Crime Statistics Report 2015 states that economic crimes which include fraud, money laundering dropped from 15,872 in 2014 to 7,794 cases across the country. The drop by 51 percent in economic crimes especially fraud cases is the creation of the fraud and cyber units in the CID.
Mr. Kamara noted,“Since 2015, with the establishment of the fraud unit which deals with such matters, specifically the application of zero tolerance to such breaches, there is some amount of decrease in the commission of such crimes.”
Impact
These crimes regardless of the decrease tell on the image and revenue of the country. Mr. Issa Kamara Deputy Excecutive Editor of Standard Times frequently reports on fraud and corruption cases.
“It [fraud] portrays a bad image to the public and internationally as well that because this is being done, nobody is commenting on it, and so it is a place you cannot go and do business,”Mr. Issa Kamara said. “419 is an imported kind of corruption. It has become so embedded in our system that if not exposed it may also damage the reputation of the nation.”
A research titled ‘Diamonds in Sierra Leone a resource Curse?’ estimates that 50 percent of the country’s diamonds are smuggled every year.
The Truth and Reconciliation Commission Report states, “Successive post-colonial governments mismanaged the diamond industry and placed its effective control in the hands of outsiders in a way that has not benefited the Sierra Leone economy. A culture of diamond smuggling and embezzlement has been entrenched among key members of the political elite.”
“When you go through the process and pay the tax involved, there will be income generation. The government will make more money. When they are defrauded they will hate the name Sierra Leone,” Mr. Sheku Kamara stated.
Legal process

The Sierra Leone legal system is a three way process – the police, courts and the correctional services. The police have the responsibility to investigate and sometimes prosecute, Mustapha Kambeh, Director of Corporate Affairs of the Sierra Leone Police said, some of the cases stop at the level of the police.
“The victims come purposely for this business until they realise it is all a scam,” Mr Sheku Karama stressed. “So what happens just after that, a few days or couple of weeks, they will go back.”
Some investors report to the police but are not prepared to go through the legal process that takes a long time.

Another challenge in the investigation is identifying the alleged fraudsters. They normaly hide and leave no trace of documentary evidence. Even when the identity of the person is known the issue of witnesses comes up. The fraud victim who in this case is the principal witness should be present in court to testify.
“These investors do not have time to go through the cumbersome legal procedure that will lead to prosecution and possible conviction. They normally leave our jurisdiction for their home country,” Mr. Ngevao stated. “Some of these investors buy these diamonds with the intention that they are going to smuggle it out of Sierra Leone.”

The Criminal Procedure Acts states, when a matter is called-up up to three times and the witness makes no appearance, especially a significant/principal witness, the accused is released.
In most cases, the person defrauded is the main witness. In his absense the matter cannot be sustained to court. Likewise, there are instances when there is no witness. It becomes the foreign nation’s word against the so-called miner’s word.
“As a sole retained solicitor for the American Institute of Diamond Cutting, Inc Florida, I offer professional advice to investors that come to invest in the diamond and gold industry,” Lawyer Ngevao said.
Malik an Indian gave $700,000 to a man in 2013 for diamonds. Malik is still in the country waiting for the outcome of the case.
New approach

The National Mineral Agency (NMA) a government institution that registers and regulates mining activities identifies fraud as an issue to deal with in the mineral sector. In a statement in December 2014, the agency posted fraud warning on its website that there are individuals and companies claiming to have mining licenses and precious minerals (gold and diamonds). The government agency asked that people should check with the office to determine whether the individual or company that contacted them is registered to trade in gold and diamonds in Sierra Leone.

The US State Department in May 2014 came out with a fraud alert about fake Kimberley process certificates, suspected of being issued by corrupt government officials in Sierra Leone and Guinea.
A new way to address this threat that paints the country in bad light is to have a criminal fast track court to deal with issues that have to do with the buying and selling of precious minerals.
“I will admonish that a special criminal court be set up to look into mineral cases where it is alleged that investors have been defrauded and let that court be like a fast track commercial court where they are being done expediciously,”  Mr. Ngevao recommended. “Let fines or even convictions be handed down to prevent other people from doing that. In Sierra Leone we believe that the object of criminal litigation is to serve as deterant.”

To trade in diamonds in Sierra Leone, the investor should register a company, and have a dealer license. Exporter license or exporter’s agent license qualifies a company or an individual to fly out with diamonds. The fee for each of these exporter licenses cost around $10,000. This is the bait that hook some small scale investors trying to avoid paying for the license to become victims of fraud.
Therefore, the license fees need to be reviewed downward and the process to get it should be short. There should be no place for middlemen who are most often part of the fraud network.

By Silas Gbandia, IWPR Fellow