Russian business man had sued the government of Kenya over gold sale
By ANTONY KARANJA in Dallas, Texas USA
A US appellate court on last week dismissed a suit filed by a Russian Immigrant in the US against the Republic of Kenya.
Andrew Vilenchik lost his appeal against a ruling by a US district court in Minnesota which dismissed his claims for lack of subject matter jurisdiction.
The court ruled that the district court correctly determined that none of the acts or alleged breaches of duty attributed to the Kenyan government and its apparatus were commercial in nature.
Mr. Vilenchik and his company Community Finance Group had brought a suit against the Kenyan government, Kenya Revenue Authority, Kenya Departmentof Customs, and Kenya Central Bank for breach of duty, improper taking inviolation of international law, conversion, conspiracy to commit a tort, aiding and abetting an improper taking and fraudulent scheme, and unjust enrichment.He was seeking $50 million (Sh4.2 billion).
The Republic of Kenya, the Kenya Revenue Authority and the Central Bank of Kenya are subject to US Jurisdiction under 28 U.S.C section 1605 (a) (3)of the Foreign Sovereign Immunities Act (FISA) which addresses general exception to the jurisdictional immunity of a foreign state.
Attorneys representing the Kenyan government filed a motion to dismiss which was granted by the district court.
According to the suit filed in March 2010, Vilenchik, says that he was interested in buying some gold and so he hired John Saina who is a Minneapolis based consultant from Kenya.
Mr. Saina visited Kenya in February 2009 and expressed an interest in purchasing raw gold.
In May 2009, agroup who claimed to own a gold mine in the Ituri Province of the Democratic Republic of Congo approached Saina claiming that they had 3,700 kilos of gold that was immediately available for sale, the lawsuits stated. They said the total cost of the consignment was $70 million (Sh5.9 billion).
Vilenchik, 31, authorized Saina to purchase an initial sample of 300 kilos at a cost of $5.7 million.
Saina visited the offices of the group that claimed to have the gold. The meeting took place in the third floor of Hazina Towers in Nairobi.
According to the suit, he verified the existence of the gold in the presence of the gold mine “representatives”. They were also joined by a customs agent accompanied by four armed security guards from G4services. Saina placed secondary locks on the container that contained the gold to safeguard it.
Samples were also taken to the “Kenya Ministry of Mines for verification.”
Vilenchik says that after the meeting an agreement was reached for an establishment of an escrow account for $350,000 (Sh29.7million)for Kenya customs fees. Vilenchik wired the money into the account.
The plaintiff further states in the suit that the gold was not availed to the CFG as promised but they were informed that additional documentation was required from the Kenya customs and the UN. CFG representatives were later introduced to two gentlemen in another meeting who claimed to be from the UN.
Vilenchik who also joined Saina in Kenya for the transaction said that one of the Kenyan men told one of his employees, Cary Larsen while on their way to the meeting “that white people disappear in Africa all the time,”and this made them fear for their lives as they tried to sort out the problems.
The suit also states that on June 22, 2009, Vilenchik, Larsen and Saina went to the UN to locate the said “UN agents” they had met with and security guards in the compound confirmed that no individuals bearing the names of the “UN representatives” existed in any of the UN departments.
CFG reported the matter and filed a complaint with the Kenya Banking Fraud Investigations Department. CFG is said to have filed an attempted murder charge after one of the Kenyan men pointed a gun at Larsen. They reported the incident to the Criminal Investigations Department who according to suit recovered a loaded gun from the Kenyan.
The suit also alleges that the Kenyan men and a Tanzanian counterpart were using fake names.
According to the lawsuit, CFG representatives were taken to the Jomo Kenyatta International Airport by the police. The CFG representatives identified the customs seals used by the Kenya customs official on the day the gold was shown to CFG. This enjoins the Customs department to the suit as it is a functionality of the Republic of Kenya.
The suit further states that the Central Bank is enjoined inthe suit as it had earlier initiated a hold on the pending wire transfer awaiting verification as to the nature of the wire. The suit alleges that the Central Bank confirmed the legality of the gold sale contract.
In addition, the suit states that the vehicle used totransfer the gold was a 1998 Lexus owned by a forex Bureau licensed by the Central Bank of Kenya.The forex bureau is listed as an agency or instrumentality of the Republic of Kenya.
In addition to the $50 million, the suit was seeking a further $400,000 which included the $350,000 transferred to the escrow account as well as $50,000 for various travel expenses.
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