‘We’re victims of fraud,’ Dubai-based company cries out over moves by Zambian govt to seize its K8 million

Smolenski Trading LLC, a Dubai-based company, has strongly contested the Zambian government’s move to seize K8,142,251.04, claiming the funds were lawfully obtained through legitimate business dealings.

The dispute arises in response to an application by the Director of Public Prosecutions (DPP) seeking a non-conviction-based forfeiture of the funds, which are currently held in an FNB bank account.

Read more: Court dismisses DPP’s bid to forfeit ex-ZAF commander’s K91 million properties

Authorities allege the money is linked to a fraudulent gold transaction.

In a sworn affidavit filed in the Economic and Financial Crimes Court, Nikolai Smolenski, Managing Director of Smolenski Trading, explained how the company became involved in a gold purchase deal in Zambia in October 2022.

Initially known as Epitychia General Trading LLC, the company claimed it was introduced to the transaction by Peter Ndhlovu, a Zambian businessman.

To ensure the legitimacy of the deal, Smolenski Trading said it sent Almaz Dryrydaev, a representative, to Lusaka.

There, Dryrydaev reportedly met with directors of Lusaka Gold and Platinum Refinery Limited, including Johnson Kitenge Solochi, who presented 45kg of gold along with what appeared to be authentic documentation.

After verifying the refinery’s assurances, Smolenski Trading claimed it made an initial payment of US$277,775 on October 11, 2022, for the first consignment of gold.

A second order for 123kg of gold was placed, with an additional payment of US$506,119.98 from the personal account of Nikolai Smolenski’s father, Alexandros Smolenski.

An additional US$252,590.29 was paid to Damphen Clearing and Forwarding Limited for logistics.

However, the deal collapsed when the Airway Bill for the shipment was found to be fraudulent, and the company realised it had been defrauded.

Despite reporting the incident to Zambian authorities, including the police and Drug Enforcement Commission (DEC), Smolenski Trading’s funds were reportedly seized and are now at risk of being forfeited.

The company argues that it is an innocent victim of fraud, and the seized funds should not be considered “tainted property” under Zambia’s Forfeiture of Proceeds of Crime Act.

Smolenski insists the money was transferred for a legitimate business transaction, and that the directors of Lusaka Gold and Platinum Refinery Limited and Damphen Clearing are the real criminals.

According to Smolenski’s affidavit, the forfeiture of the funds would be an unjust penalty for a victim of fraud and would not address the actions of the actual perpetrators.

“If the state proceeds with the forfeiture, it will cause irreparable financial harm to our company while the real fraudsters go unpunished,” Smolenski stated.

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