Dubai-based Smolenski Trading LLC has challenged the forfeiture of K8 million to the Zambian government, arguing that the funds are legitimate business assets and not proceeds of crime.
The company, formerly known as Epitychia General Trading LLC, has filed an affidavit in opposition to the forfeiture application before the Economic and Financial Crimes Division (High Court), asserting that it was a victim of fraud perpetrated by Lusaka Gold and Platinum Refinery Limited.
In the affidavit, Smolenski Trading’s Managing Director, Nikolai Smolenski, stated, “The funds in question were lawfully remitted by our company for a legitimate gold purchase. We were misled into believing that Lusaka Gold and Platinum Refinery Limited was a credible entity.”
The company explained that in October 2022, it was introduced to a gold trading opportunity in Zambia by one Peter Ndhlovu. Acting in good faith, Smolenski Trading sent its representative, Almaz Dryrydaev, to verify the transaction.
“We conducted due diligence, and our representative was taken to a refinery in Ibex Hill, Lusaka, where 45 kg of gold was presented, along with what appeared to be authentic documentation,” Smolenski added.
Following this, Smolenski Trading remitted an initial sum of USD 277,775 for the first purchase. Later, believing the first transaction was properly concluded, the company placed a second order for 123 kg of gold, remitting USD 506,119.98 from the personal account of Alexandros Smolenski, Nikolai’s father.
However, the company later discovered that the airway bill provided for the shipment was falsified, and no gold was ever shipped.
Realizing they had been defrauded, they reported the matter to Zambian law enforcement agencies, including the Drug Enforcement Commission (DEC) and the Zambia Police.
“The forfeiture of our seized funds would amount to an injustice, depriving us of lawfully obtained business funds while allowing the real fraudsters to go unpunished,” Smolenski asserted in the affidavit.
He further argued that the funds were part of a contractual transaction, as evidenced by a statement of claim filed in Epitychia DMCC and Alexandros Smolenski v. Lusaka Gold and Platinum Refinery Limited and Damphen Clearing and Forwarding Limited (Cause No. 2023/HP/2048).
The affidavit stressed that the company has already suffered significant losses, including exchange rate fluctuations, and that it would be unfair to classify the seized funds as tainted property under Zambia’s Forfeiture of Proceeds of Crime Act.
“This law is meant to deprive criminals of unlawfully acquired assets, not to punish victims of fraud like us,” Smolenski argued.
Smolenski Trading is now seeking the court’s intervention to have the seized funds restored, arguing that forfeiture would cause “irreparable financial loss” while the actual perpetrators remain unpunished. In January, the Director of Public Prosecutions, Gilbert Phiri, filed a notice of motion to have over K8 million held in an FNB bank account forfeited.
