Padlocks sold as gold: Nairobi scams turn buyer safeguards into traps

An Australian buyer reportedly lost Sh78 million in a Nairobi gold deal that included a smelting demonstration. The material melted for the display was not gold, but ordinary padlocks, according to Kenya Insights. The case shows how an apparently convincing test can become part of the deception facing foreign buyers seeking African minerals.

The outlet describes overlapping alleged fraud operations using offices in Nairobi’s Kilimani, Westlands and Kitisuru neighbourhoods to attract investors from North America, Australia, China, Switzerland and the Middle East. Buyers are offered discounted gold or other minerals, often said to come from the Democratic Republic of Congo. Documents, samples and export arrangements give the transactions an appearance of legitimacy. The reported losses run into hundreds of thousands of dollars in individual cases.

When the safeguards become the trap

According to the report, buyers receive forged mining licences and official-looking documents, while front companies present themselves as logistics providers. Payments pass through escrow accounts—arrangements meant to hold money safely until agreed conditions are met. Investigators say some of those accounts are instead controlled by the people arranging the deals or their associates. Lawyers or law firms sometimes feature in the arrangements. After payment, promised shipments disappear, delays mount or worthless material arrives.

A February 2023 operation exposed much of that machinery. Kenya’s Directorate of Criminal Investigations, or DCI, raided locations in Kilimani and a Kitisuru residence, arresting Seth Steve Okuthe, also identified as Okute, and Brunoh Otieno Oliende, known as Oyugi. Detectives recovered two pistols, more than 470 rounds of ammunition, coated mineral samples, metal analysers and a stamp bearing the name of a Kinshasa-based advocates’ firm. The men and their associates were accused of taking Sh67.3 million, approximately $534,000, from two American investors, including Los Angeles resident Marjorie R. Grant.

Kenya Insights also identifies Kelvin Otieno Onyango, known as Kevo Sonko or Kevin Sonko, as a recurring figure in investigations. He presents himself as a director of SwiftTaxis Logistics Ltd. The report links him to an alleged Sh151 million mineral fraud in which a Chinese buyer paid for containers that reached Mombasa carrying sand and reconditioned drums rather than valuable minerals. Investigators say he hosted buyers, negotiated transactions and helped channel payments into controlled escrow accounts. These are allegations; the report does not establish convictions in the cases described.

Repeated losses, continuing investigations

The outlet reports that Sonko and associates were linked in 2025 to an alleged $618,000 loss by a Canadian investor in a proposed 250-kilogram gold transaction involving a private jet. In another Kilimani case, an American reportedly lost Sh37 million–38 million. DCI subsequently obtained court orders to open several safes in a building, finding more fake gold and other evidence. These cases illustrate the repeated use of elaborate transaction arrangements to win buyers’ confidence.

According to Kenya Insights, DCI officers warn that the alleged networks damage Kenya’s standing as a legitimate investment and transit destination.

That concern extends beyond the buyers’ losses. Kenya’s role as a route for minerals moving towards the UAE and other markets is central to the sales pitch described in the report. Forged customs documents and logistics fronts blur the distinction between genuine trade and fraud. The report also raises questions about enforcement, describing repeated arrests and releases on bail, often set at Sh100,000–200,000 for key figures.

DCI continues to pursue leads, examine safes, seize vehicles and assemble case files, according to Kenya Insights. The next developments to watch are how those investigations progress and whether enforcement disrupts the payment and logistics arrangements that the report says allow similar schemes to recur.