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Efforts to recover Sh50 billion ill-gotten wealth : The Standard



National Youth Service suspects at the dock in Mililani law court where they were charged with conspiracy to commit an economic crime at NYS. 5/6/2018. [Beverlyne Musili, Standard]

A multi-agency team stepped up efforts to recover billions of looted public funds in a year that saw several high-ranking Government officials charged with graft.

In May, the National Council of Churches of Kenya (NCCK) estimated that the country stood to lose Sh700 billion through embezzlement of public funds in one year as the corruption index soared to unprecedented heights.
The mind-boggling figure is almost a quarter of the country’s Sh3 trillion budget and is enough to construct the second phase of the Standard Gauge Railway from Nairobi to Kisumu.
Some of the biggest scandals involved the National Youth Service, Kenya Power, National Hospital Insurance Fund, Kenya Pipeline Company, National Cereals and Produce Board and several county governments.

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Within the year, the Ethics and Anti-Corruption Commission (EACC) and the Assets Recovery Agency (ARA) filed several cases to freeze accounts of corruption suspects and stop them from disposing properties worth billions of shillings suspected of being acquired through proceeds of crime and money laundering.
The amounts and properties frozen are estimated to be over Sh50 billion, which the two agencies claimed in court documents were acquired through a well calculated conspiracy involving top civil servants in collusion with business entities that were paid without breaking a sweat.
A document presented to Parliament in July by the multi-agency team showed that there were about 102 ongoing cases involving attempts to recover public properties.
Investigators traversed the entire country, from Trans Nzoia, Migori, Nairobi, Nakuru, Makueni to Kilifi and uncovered startling tricks used by corruption cartels to cover their tracks while plundering public resources.
According to documents filed in court by the two agencies, awarding tenders for work not done was the most used strategy. Other tricks involved using proxies to siphon public funds, opening offshore accounts, inflation of contract prices and flouting procurement rules.

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Using proxies
Migori Governor Okoth Obado (pictured) is suspected of using proxies to siphon Sh2 billion from the county coffers.
The anti-corruption commission obtained orders freezing the accounts of six suspected proxies from one family and a pharmacist. EACC is also investigating fictitious and non-existent deals that Obado is suspected to have used to receive Sh39 million wired to his children studying in Australia and Scotland.
The court also issued a caveat stopping the family from disposing 65 properties which include four maisonettes in Nairobi, an apartment in Nairobi and several tracts of land in Migori town.
In one case, EACC claims that the county government paid over Sh800 million to seven non-existent companies, registered almost two years after the money had been credited in their accounts.

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“These were part of dubious contracts with fictitious payments for services not rendered. The companies were formed specifically to loot funds, they connived through fraudulent schemes and accumulated illegal wealth that must be surrendered to the state,” said EACC.
Bank accounts
Anti-graft agents uncovered public officers living large with multi-million shillings properties across the country and huge cash stashed in bank accounts despite their modest salaries.
According to EACC, one suspect Joseph Gikonyo, an official at the Kenya Revenue Authority earning a monthly salary of Sh119,000, had a massive empire of unexplained wealth estimated to be over Sh615 million.
The commission suspected that the suspect had irregularly acquired immovable properties spread in Nairobi, Mombasa, Kilifi and Kwale valued at Sh355 million and cash deposits in various banks totalling Sh399 million and obtained orders freezing his accounts and assets.

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A similar fate befell former Nairobi County Finance Officer Stephen Osiro who is suspected of amassing a Sh340 million fortune in both cash and property within a span of five years from a modest salary of Sh90,000 a month.
Thomas Gitau Njogu, a senior accountant at Interior ministry was also stopped from dealing with his Sh111 million wealth suspected to have been acquired illegally in a span of one year despite his modest net salary of Sh93,000 per month.
Despite earning a monthly salary of Sh101,000, Andrew Musuya, a principal accountant at the Trans Nzoia County, is suspected of accumulating more than Sh224 million which the court froze pending determination of the suit.
At the National Youth Service, one family from Naivasha is suspected of receiving millions of shillings for goods and services that were never supplied in a Sh8 billion scandal. In the case, a number of banks were mentioned as being used as conduits for the loot.
Lady Justice Jessie Lessit issued orders freezing accounts in various banks held by companies suspected to be involved in looting NYS, following claims that they were colluding to withdraw entire amounts and destroy evidence linking them to the scandal.
“Investigations revealed that between January 2015 and May 2018, more than one billion shillings was laundered from NYS and channeled into several bank accounts before being hurriedly transferred to other entities,” said ARA.
The agency told the court that four relatives: Ann Ngirita, Lucy Ngirita, Phylis Njeri and Jeremiah Ngirita received over Sh465 million from NYS without breaking a sweat
In one instance, the family is suspected of receiving more than Sh133 million from NYS in less than 36 hours without supplying any goods or services.
The asset recovery agency obtained orders stopping the family from transferring three vehicles and five chunks of land suspected to have been bought using the loot.
The courts also froze ten accounts with over Sh32 million belonging to former Youth and Gender Affairs PS Lillian Omollo, her three companies and three children.
The asset recovery agency suspects that the former PS was involved in systematic fraud and siphoning of public funds through which money would be transferred to various suppliers for goods and services that were not supplied.
Also frozen were 10 accounts belonging to businessman James Thuita and his companies Flagstone Merchants Ltd, Excella Supplies, Firstling Supplies Ltd, Ellyn Supplies and Interscope Tech Ltd suspected of irregularly receiving Sh1.5 billion from the NYS.
Inflated contracts
From the Auditor General’s office, EACC sought to recover Sh100 million it suspects was paid to purchase audit vault software systems when the project was estimated to be worth Sh53 million.
The EACC claimed the contract was inflated to benefit certain individuals, the procurement done irregularly and the tender awarded to a company that had no capacity to deliver the audit vaults software and payments made without any documentation.
The agency sued Deputy Auditor General Stephen Kinuthia in the scandal that rocked the public financial watchdog.
“He dishonestly used his power at the auditor general’s office to influence the acquisition of audit vault software at an inflated price in return for a kickback and signed an agreement with the company before the tender was discussed by the executive committee,” said EACC.
The anti-graft agency sought to recover Sh47 million from Kinuthia and several companies.
False accounting
In some instances, EACC and ARA probed public officers for entering false accounting and signing payment vouchers to enrich themselves.
This led to the freezing of accounts of four employees of the Information and Communication Technology Authority (ICTA), Felix Ongaga, Daniel Ouma, Peter Mwangi and Anthony Mwangi  suspected of stealing Sh74 million.
Asset recovery agency claimed in the application that the four illegally authorised payments of Sh155 million from ICTA account and transferred this to their accounts through false expenditure.
“It was a clear case of fraud, theft and money laundering of public funds. The systematic cash withdrawals of below Sh500,000 were deliberately done to conceal theft and avoid raising suspicion. At one point, they were doing an average of four to thirteen transactions in a day,” said ARA.
The agency claimed some of the money was withdrawn to cater for projects, inspections of ICT networks, field visits and travel expenditures to various counties which never took place.
County governments
The EACC filed a suit to recover Sh26 million from several companies and Kilifi County officials suspected of benefiting from the illegal procurement of 6,000 pieces of insecticide-treated nets.
According to the commission, there was no evidence that the nets were delivered to the county government despite the money being paid or any valid contract with the companies that received the payments.
“The county officials in collusion with the businessmen and their companies facilitated and participated in a corrupt enterprise with the aim of unlawfully acquiring Sh26,640,000 of public funds which they must be compelled to refund to the government,” said EACC.
In Makueni County, an accountant was fined over Sh16 million for stealing public funds meant to support devolution projects.
The court found that Wycliff Mitema misappropriated Sh3.8 million and ordered him to return to the public five times the stolen amount.

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