High Court Orders Forfeiture of Fraud-Linked Funds to the State in Major Economic Crime judgment

Lusaka | October 3, 2025 – The Economic and Financial Crimes Division of the High Court has ordered the forfeiture of ZMW 8,142,215.04 to the State, after finding the funds to be the proceeds of a fraudulent gold transaction involving a Zambian company and a foreign buyer based in the United Arab Emirates (UAE).

The funds, held in FNB Account Number 62908248463, were traced to Lusaka Gold and Platinum Refinery Limited, which claimed to be exporting gold to Smolenski Trading LLC, a company based in Dubai and formerly operating under the name Epitychia General Trading LLC.

Investigations revealed that the Zambian company was not licenced to trade or process minerals and had no valid export permits under the Mines and Minerals Development Act. The court found that the transaction was a sham and that the money deposited into the FNB account was part of a scheme to move illicit funds under the guise of mineral trade.

In resisting the application for forfeiture, the foreign company argued that it had been deceived and had paid over USD 700,000 in good faith, believing it was purchasing legitimate consignments of gold.

But the High Court found otherwise. A panel of three judges – Justice S.M. Wanjelani, Justice P.K. Yangailo, and Justice A. Makata-Ononuju – ruled that the company had failed to conduct even basic due diligence, such as verifying whether Lusaka Gold and Platinum Refinery Limited held a mineral trading or export licence.

Citing clear provisions of the Mines and Minerals Development Act, the court emphasised that a valid export permit is a legal requirement for any person or entity seeking to move minerals across Zambia’s borders. The absence of such a permit rendered the entire transaction illegal.

The court further held that the foreign company’s failure to make reasonable inquiries constituted wilful blindness, and that its conduct met the threshold for complicity under the Forfeiture of Proceeds of Crime Act (FPOCA).

The court held that the ZMW 8.1 million was tainted property, having been derived from a serious offence, namely, obtaining financial advantage by false pretences.

Although the law allows an Interested Party to retain property if it was acquired for fair value and without knowledge of criminality, the court found that the foreign buyer could not rely on this protection. It had not demonstrated that it took reasonable steps to confirm the legality of the transaction or the licencing status of its Zambian counterpart.

“A commercial entity engaged in international mineral trading is reasonably expected to ascertain that its counterpart holds the necessary licences and permits under Zambian law before entering into such transactions,” the court stated in its judgment.

This judgment sends a clear signal that Zambia’s financial system and mineral export framework cannot be used as a vehicle for fraud, money laundering, or corporate negligence.

The case reaffirms the State’s ability, through the Office of the Director of Public Prosecutions and the FPOCA, to recover proceeds of crime, even where foreign actors are involved, and to hold accountable those who fail to comply with Zambian law.

It also sends a strong message to business owners and entities, especially foreign investors, that they must comply with the law when engaging in mining and mineral-related activities. They are expected to follow all established legal procedures before entering into mineral purchases and to transact only with officially designated and reputable dealers

The court awarded costs to the Applicant, to be taxed in default of agreement.

Case Title – The Director of Public Prosecutions and In re: Property ZMW 8,142,215.04