Alrosa Seeking Evidence of $10M Embezzled from Catoca Mine

Legal
21/05/2019 12:28

Russian diamond miner Alrosa believes that the former and current management of Angolan diamond mine Catoca - in which Alrosa holds a 41% stake - is responsible for secreting away nearly $10 million, and will call upon a U.S. court to obtain discovery of evidence. According to Africa Mining Intelligence, the Russian firm has turned to New York court magistrate Judge Paul Gardephe in the hope of gaining access to documents that would prove that Catoca transferred millions of dollars into shell companies scattered around the world - from Hong Kong to the Bahamas, Cyprus, the UK and US.

Alrosa claims that a total of $9.8 million was embezzled from Catoca's accounts while Russian national Sergey Amelin was general manager of the firm; he was replaced in August last year. Alrosa believes the money was transferred to banks in New York to pay for equipment and services from companies that either did not offer such services or conducted no business activity whatsoever. The miner is seeking from sixteen financial institutions all wire-transfers and transactions over $10,000 that took place between February 2015 and December 2018. if that evidence is forthcoming, they plan to take action against Amelin and possibly other former or current Catoca executives in Angola or the UK.

Alrosa conducted its own investiagation prior to initiating this step in the NY court. Their investigation reportedly identified eight companies that received payments from Catoca of between $113,000 and $5 million, whereby Catoca dealt with an intermediary who overcharged Catoca for goods and services performed by others. Alrosa has engaged lawyer and former Pennsylvania senator Bruce Marks, an expert in legal cases concerning the former Soviet Union and the West, to submit its request to the court. 

Catoca is one of the world's largest diamond mines, producing over 7 million carats in 2018. Alrosa and Angola state-owned firm Endiama (also 41% owner of Catoca) recently set up a supervisory council to control and approve contracts made by Catoca, as well as approve the executive directors of the mine and its financial affairs.