Kampala, Uganda: Businessman Muhammad Ali has been remanded to prison over his alleged role in a sophisticated UGX 13 billion fake gold scam that has now drawn the attention of multiple security agencies amid fears of a wider international fraud network.
Ali was on Tuesday arraigned before the Makindye Magistrates Court where he was read the charges of theft and cheating. He was remanded until May 5, 2026, as investigations intensify.
Prosecution alleges that between September and October 2025, Ali, then a senior manager at Duck Hunters Security Company in Muyenga, worked with accomplices still at large to defraud Dubai-based investors of USD 3.5 million (approximately UGX 13 billion) through fraudulent gold transactions.
Court heard that the victims had travelled to Uganda in search of gold suppliers and were introduced to various dealers through Ali, who allegedly positioned himself as a trusted intermediary in the lucrative minerals trade.
The investors initially purchased 10 kilograms of gold worth USD 700,000 from Spanex Ltd. However, in what investigators describe as a calculated escalation of trust, Ali allegedly convinced them to enter a second, larger transaction involving 30 kilograms of gold from a purported military officer at USD 2.4 million.
The consignment was reportedly tested at Azzura Refinery, yielding positive results, and later stored at Duck Hunters Security Company pending export to Dubai. But in a dramatic twist, the entire consignment disappeared without trace, triggering alarm among the investors.
Upon returning to Uganda to follow up, the victims reportedly discovered they had fallen victim to an elaborate gold scam, one authorities now believe may involve a coordinated syndicate spanning multiple actors, including fraudulent dealers and possible impersonators of state officials.
Investigators have since widened the probe to examine alleged links to other gold-exporting companies and claims of military involvement, with intelligence agencies and the army now reportedly participating in the ongoing inquiry.
Duck Hunters Security Company has distanced itself from Ali, describing him as a former manager who allegedly abused his position to orchestrate the fraud.
Wider Gold Scam Network Emerges
The case adds to mounting evidence of a growing and highly organised gold fraud industry in Uganda, particularly targeting foreign investors from the Middle East, Europe, and Asia.
Security agencies have previously warned of an “upsurge of gold scams” in Kampala, especially in upscale suburbs such as Muyenga and Buziga, where fraudsters operate from rented offices, fake refineries, and high-end apartments to create an illusion of legitimacy.
In many cases, victims are lured through professional websites, introduced to “licensed dealers,” and shown gold that passes initial laboratory tests, only for the consignment to later be swapped or disappear entirely.
A 2025 multi-agency crackdown uncovered at least 56 suspects linked to gold fraud operations, with authorities describing the networks as “sophisticated criminal enterprises” using counterfeit licences, fake documentation, and staged testing processes to deceive buyers.
Investigators say a common tactic involves convincing buyers that their gold is safely stored in high-security facilities pending export, only for the consignment to vanish after full payment is made.
Investor Confidence at Risk
The latest case is expected to heighten concerns over investor protection in Uganda’s mineral sector, which has in recent years attracted billions of dollars in gold exports.
According to Uganda Revenue Authority data, over 46,000 kilograms of gold worth nearly USD 3 billion were exported between June 2023 and June 2024, underlining the scale and attractiveness of the trade—but also its vulnerability to exploitation by criminal networks.
Analysts warn that continued high-profile scams risk undermining Uganda’s credibility as a trusted gold trading hub, particularly among international investors seeking reliable supply chains.
Officials from the State House Anti-Corruption Unit (SHACU), in conjunction with the Criminal Investigations Directorate (CID) and the Office of the Director of Public Prosecutions (ODPP say efforts are underway to arrest other suspects still at large, dismantle the network behind the scam, and recover the stolen funds.
They have also urged foreign investors to conduct due diligence and engage only with verified and licensed mineral dealers, as government moves to tighten regulation and oversight in the gold trade sector.
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