State House and DoD at centre of intriguing con scam

By ERIC WAINAINA
More by this Author

As he stood before Justice Jesse Njagi at the Kakamega High Court charged with the murder of a neighbour, Mr Fredrick Muhanji Mangala had an objection: He was not ready to proceed with the hearing because copies of witness statements and a ballistics report had not been given to him.

Accused of shooting dead Mr Fredrick Majanga Lukhutsu in Irobo village in Kakamega County on September 15, Mr Mangala got his wish after the judge ordered the prosecution to supply him with the documents.

With the next court appearance listed as March 27, next year, he was assured of his freedom in the interim — after parting with Sh2 million bond with two sureties.

What Mr Mangala did not know as he stepped out of the Kakamega courtroom was that detectives from Nairobi, who had been on his trail for weeks, were waiting to arrest him.

He was soon sandwiched between elite Directorate of Criminal Investigations (DCI) officers in a Subaru Outback headed for Nairobi.

Now locked up at Nairobi’s Muthaiga Police Station since last Wednesday for the next 10 days after Kiambu Chief Magistrate Patricia Gichohi allowed a request by detective James Mwangi of the Serious Crimes Unit for further investigation, Mr Mangala, alias Mr Douglas Simiyu, is being treated as the mastermind of an alleged elaborate criminal network that perhaps presents one of Kenya’s most audacious — and alarming — cases.

The image of Mr Mangala was later posted on the DCI Twitter account behind a board declaring his charge as “obtaining money by false pretence” contrary to section 313 of the Penal Code. It did not capture the gravity of the situation.

Mr Mangala’s case, the latest in a string of arrests in recent weeks, involves fake tenders believed to have been issued by suspected well-connected fraudsters inside some of the most guarded locations: State House, the Office of the Deputy President and the Department of Defence.

How the suspected fraudsters gained access to these facilities, occupied offices for some time, impersonated officials, lured their victims and had items worth millions of shillings delivered to them, remains the subject of investigation and court cases. Several insiders are thought to be part of the cartel.

A review by the Sunday Nation of investigation reports, court filings and interviews with victims reveals a group with suspected links to rogue staff at State House and the Deputy President’s office at Harambee House Annexe.

Their preferred method, according to police investigations, is luring wealthy business people with fake “restricted” tenders complete with documents to supply equipment — mostly laptops — worth millions of shillings.

According to statements recorded by the police, the meetings are typically held inside these government offices to gain the confidence of those being targeted and give legitimacy to the fake transactions.

More than 10 people have so far filed separate complaints with the police after losing millions in fake tenders.

Some of those suspected to be behind the racket have been arrested and arraigned in court where they are facing charges of forgery and obtaining money by false pretence, while some cases are still being investigated.

The criminals, who victims say masquerade as senior security officers and State House employees, also forge job identification cards, local purchase orders (LPO) and delivery notes, complete with letterheads and stamps.

Mr Charles Gathii Ng’ang’a, a victim, is counting losses of at least Sh240 million after he was “awarded” fake tenders to supply computers to State House and the Department of Defence between January and September.

According to his statement to the police that will be the subject of the court case, Mr Gathii, the director of Micro House Technology, was approached by a Mr Douglas Simiyu — who detectives have unmasked as Mr Mangala — masquerading as a National Intelligence Service officer based at Nairobi’s Nyati House.

Mr Gathii told police that “Mr Simiyu” informed him of a “single-sourced tender” to supply 1,200 pieces of HP Envy laptops, which he claimed were needed at State House for a security project.

Mr Gathii alleges “Mr Simiyu” took him to an office at State House and later to another on the second-floor of Harambee House Annex, which he was told hosts the presidential delivery unit.

In both instances, he claims, “Mr Simiyu” easily gained access to the protected facilities.

After “Mr Simiyu” was arrested on Tuesday in Kakamega and driven to Nairobi, Mr Gathii identified him as the person he dealt with.

Mr Mangala’s alleged accomplice, Mr Eric Otieno Atanga, alias Colonel Kiprotich, has already been charged before Ms Gichohi at the Kiambu Law Courts with obtaining Sh40 million from Mr Gathii in connection to a fake DoD tender.

According to two sworn affidavits filed in court by Mr Mwangi, the DCI detective leading the investigation, Mr Mangala (who at the time was referred to as “Mr Simiyu”) introduced businessman Gathii to a Ms Patricia Mareka, a purported State House official, and who the victim also later met at Harambee House Annex.

Detectives believe Ms Mareka is possibly a fake identity. The businessman also noted that in their various meetings, Mr Mangala was armed with a pistol.

The businessman said he made several visits both to State House and Harambee House Annex in the city centre and was on each occasion introduced to people he was told were senior government officials aware of the tender.

Mr Gathii also told police he was asked to sign a non-disclosure agreement at Harambee House Annex on January 9. There was more to come in the suspected scheme.

“It is well-coordinated since, in my case, when I took the LPOs to the bank, and a call was made for verification, the receiver responded, ‘this is State House, how may I help you?’” Mr Gathii said.

When asked to direct the bank staffer to the procurement unit, the call was transferred to a person who claimed to be the head of the department, Mr Gathii said.

After negotiations and the “necessary arrangements”, Mr Gathii was issued with the LPO by Ms Mareka and this, he said, erased any doubts the tender could be fake. He went ahead to supply the 1,200 laptops.

The businessman said he was once taken to State House to collect the LPOs on January 12 and was driven in a provided Silver Premio.

He was later told to go to Harambee House Annex to plan on the delivery logistics.

Interestingly, despite Mr Gathii telling police about the State House visits, detectives established his vehicle registration number was never recorded.

The computers, which he bought using a loan, were collected at Mr Gathii’s shop by Ms Mareka.

On January 18, he did the first delivery of 100 laptops and the rest were delivered by February 2, and submitted the invoice after being issued with stamped delivery notes

“After they delivered the goods, they came back with delivery notes, which had State House letterheads and stamps pending payment. You cannot doubt the deal,” Mr Gathii said, he later wrote to “State House” indicating the account where the payments would be made but there was no response.

Ms Mareka is still on the run. The owner of the shop where Mr Gathii sourced the goods has also recorded statements with the police.

Detective Mwangi, in a sworn affidavit filed in court on Wednesday, described the racket as a “complex matter as it involves State House staff” and in his previous filing, he told the court the investigations required him to visit State House.

After supplying goods, the payments delayed for months and Mr Gathii began to be impatient.

But the suspected fraudsters had other plans. In June, he was contacted about another lucrative tender at DoD, the military headquarters.

The businessman was taken to a man who introduced himself as “Major-General George Abram Nyapindi” — police believe this is likely a fake name — who informed him laptops worth Sh40 million were needed for the installation of a security system.

In his statement, Mr Gathii claims that after several meetings with the man — which allegedly took place in offices inside DoD and involved other people wearing military fatigues who were introduced to him as senior officers — the goods were once again collected from him.

Some of the transaction meetings used to happen at Weston Hotel, notably on February 25, 2018 when they were negotiating the DoD deal.

When these payments also delayed, the suspected fraudsters told Mr Gathii the officer responsible for payments had died in Somalia.

That was when he realised he had been swindled and reported to the police.

Detectives arrested Mr Atanga — who fashioned himself as Colonel Kiprotich — on October 17, at a restaurant on Lang’ata Road, Nairobi, where he is thought to have gone to collect money from a potential victim on behalf of “Major-General Nyapindi”.

On October 30, Mr Atanga was charged before Kiambu Law Courts that between January 23 and October 28, at Hurlingham, jointly with others, he obtained Sh40 million from Mr Gathii by falsely pretending that he was in a position to award him a tender to supply goods at DoD, which he knew was false.

He was also charged with forging three tender documents for DoD dated September 28 and September 29. He denied the offences and he has been freed on bond.

A businesswoman, who did not want her identity revealed as investigations were incomplete, has also come forward to claim she was conned out of Sh1.6 million in October last year, after being issued with a “tender” to supply computers to State House.

According to the woman, who reported her matter at Kilimani Police Station, detectives are looking for suspects who had identity cards claiming they were Intelligence officers and State House officials.

The initial value of the “single-sourced tender”, she said, was given as Sh9 million and she sent her partner to State House to collect documents without any hitch. This erased all doubts.

The suspected criminals, she said, gave her the options of buying and delivering the goods on her own or working with someone introduced to her as a contracted government transporter — an option she found more attractive.

She said she wired Sh1.6 million to the alleged contracted supplier to “test the waters” — and that was the last time she heard from the suspected fraudsters, whose phones nonetheless remain on.

In what is believed to be part of the scheme, on August 14, seven suspects were arrested at a residence in Westlands for masquerading as officers from the office of the Deputy President.

They were alleged to have fraudulently obtained 700 laptops valued at Sh320 million from businessman Stephen Musyoka, purportedly to be supplied to the Deputy President’s office.

Several people have been charged in court over the matter — including Mr Jonah Ochieng Osore, who worked in Mr Ruto’s office.

In October, four people — David Mapili, Jackson Kiharo, George Ochieng Onyango, Mercy Wahiga Wanjiku — were charged with defrauding Idris Ahmed Buro of Naliye Agencies Limited using fake Information, Communication and Technology ministry tenders.

They were charged that between July 12 and September 3, 2018 at Teleposta Towers in Nairobi, jointly with others who were not before court; and with intent to defraud, obtained from Mr Buro Sh23 million, 797 pieces of HP laptops worth Sh55,832,880 and 797 pieces of software windows valued at Sh9,962,500.

According to the charge sheet, the total value of the amount which they obtained is Sh88,784,340 after they falsely pretended they had a genuine tender to supply the items to the ministry.

In one tender, the businessman, who said he would meet the fraudsters at the ministry offices, was required to supply Panolin Hydraulic Lubricant to the Government Printer at a cost of Sh74.5 million.

In the other two tenders, he was asked to supply 797 laptops to the ICT ministry at Sh125.9 million and software at Sh28.7 million.

One of the accused, according to Mr Buro, in a sworn affidavit, introduced himself as the head of procurement at the ministry, adding that he would even meet him at the ministry’s office.

Additional reporting by Benson Amadala

By Kenyan Digest

The Kenyan Digest Team