KAMPALA: Are you buying or planning to buy gold in Uganda? There is need for effective due diligence investigation before wiring that money in a gold purchase transaction to avoid scam transactions and loosing your millions of dollars.
The recent arrest and remand of David Balondemu, chairman of the Kampala District Land Board (KDLB), has sent ripples through the gold dealing communities.
Balondemu was charged in court and remanded for allegedly obtaining money under false pretenses and conspiracy to commit a felony. His associates, James Jeff Mugisha and Godfrey Mabirizi, are also in custody, while another accomplice, Eric Geoffrey Mkwe, remains at large.
The court heard that between March and November 2021, the accused allegedly obtained $600,000 (approximately Shs 2.2 billion) under the false pretense of selling 53kg of gold to Korean national Hyun Uk Kim.
However multiple sources who spoke to Daily Post Uganda suggest that the Balondemu case is not an isolated incident, but rather the tip of the iceberg in a shadowy under-world of gold and real estate dealings. In fact, it’s an open secret that one of the quickest routes to wealth is through real estate and gold transactions.
On the flip side, Kampala is also a well-known hub for laundering illicit money from abroad, often ‘cleaned’ through such dealings. A striking aspect of this issue is that nearly all these transactions are conducted in cash.
Many unscrupulous persons and groups, commonly knowns as Bafere (illegial gold dealers) have infiltrated the business by scamming unsuspecting buyers or sellers. According to a well-placed gold dealer who prefer anonymity, “90 percent of gold sellers are scammers or unlicensed fake gold dealers.
Relatively a source within security circles, revealed that the notable companies that have been involved in the illicit gold scams in Uganda include Blessed Riverstones (U) LTD which belongs to JB Mumbere situated in Bukoto along Kisasi road, Trans Equator Miners Ltd located at Najja Shopping Centre in Najanankumbi which is associated to ever troubled businessman Emmanuel Lwasa, T&A global Agency, Trade Pannel International Ltd and Fook Moon Agency that belongs to embattled gold dealer Sam Buchanan among others.
Adding that Lawrence Lual Malong, 34, a South Sudanese national is arguably the most wanted gold scammer in East Africa to an extent that he attracted attention in Kenya and was jailed in Uganda before fleeing to Southern Sudan.
“A majority of the ‘investors’ who fall victim to scams are also involved in questionable activities like money laundering,” said a source at the Criminal Investigations Directorate (CID).
“Many are reluctant to report such cases, and even when they do approach the police, they request that the matter be handled discreetly to avoid media attention. As a result, the perpetrators often go unpunished.”

Kampala District Land Board Chairperson, David Balondemu, a lawyer, was remanded to Luzira prison by Kampala City Hall court.
HOW GOLD CARTELS OPERATE
A new class of extraordinarily wealthy Ugandans has emerged in recent years, largely due to involvement in gold scams. To execute a scam, these cartels often enlist a lawyer to draft the necessary paperwork, as well as a high-ranking army or police officer, and a supposed gold seller.
“Sometimes they go a step further by involving an ‘illiterate’ gold dealer from the DR Congo, accompanied by an ‘interpreter’,” said a police source familiar with these dealings.
Prospective victims are primarily lured through recommendations from other dealers who have profited in the industry. These recommending individuals pose as successful dealers and may even initially sell genuine gold to the target.
“After closing the first deal, the target frequently opts to travel to Uganda to conduct business directly with the primary source,” said the source. Surprisingly, some of these ‘investors’ manage to bring in thousands or even millions of dollars into the country through various entry points without much hassle.
“Upon the target’s arrival in Uganda, a senior army or police officer, who is part of the scam, arranges for a complimentary police escort to accompany the target wherever they wish to go. Those unknown individuals you see in tinted cars, being led by police patrols with sirens and breaking traffic laws many are gold dealers. For the ‘General,’ renting a patrol vehicle for Shs 1 million a day is trivial when planning to defraud more than a billion shillings,” the source added.
EXECUTION
According to sources, the scam may take several months to execute. During this period, the cartel assists the target in processing essential documents, including company registration, obtaining a gold operating license from the Uganda Revenue Authority (URA), and securing clearance from the Ministry of Energy and Mineral Development.
After the scam is executed, victims are often coerced into not involving the police.
“What usually happens is that while the victim is led to believe that everything about the deal was illegal, they themselves are often complicit, typically involved in money laundering. Local cartels are aware of this, making it difficult for victims to report such cases,” said the source.
INSTITUTIONAL LAPSES TOP OF FORM
When seeking comments on the handling of significant sums of money within the country, a senior official from the Financial Intelligence Authority (FIA) pointed out that banks and immigration officials often display complacency or collaborate with criminal elements.
The source stated, ‘In many instances, banks continue to facilitate these transactions even after we have flagged certain accounts. As a result, we occasionally find ourselves powerless to pursue such matters due to their sheer volume.”
RELATED CASES
“Balondemu is not the first individual to be arrested in connection with such a failed deal. In 2021, lawyer Simon Peter Musangala, along with two others, Martin Bwayo and Enock Katwesigye, also known as Colonel Frank, faced charges of money laundering, facilitating money laundering, and cheating. They were accused of obtaining $5.5 million (approximately Shs 20 billion) from an American national, Anastasia Belesis, under the pretense of selling gold.
In this particular case, after the American had transferred the money to the suspects, he instructed them to leave the location. However, during their departure, they were intercepted by seven gunmen dressed in UPDF uniforms who held them at gunpoint and confiscated the money. This case is still pending in court.