Computer data to reveal mystery in National Youth Service’s fraud

Investigations into the attempted fraud at the National Youth Service (NYS) moved up a gear with cyber-crime detectives said to have zeroed in on the IP (Internet Protocol) address of the computer used in the transaction.

The Banking Fraud Investigations Unit (BFIU) traced the processing of tenders for road construction and supply of building materials worth Sh122.2 million to the principal secretary in the Devolution ministry, and cleared it as sound. Detectives are now focusing on Sh695.4 million in the second transaction.

On Monday night, a public toilet built by NYS for Kibra residents was set ablaze by rowdy youths demonstrating against Devolution Cabinet Secretary Anne Waiguru, on claims that she was undermining CORD leader Raila Odinga.

Investigators are now pegging their hopes on an ongoing forensic probe by cyber-crime detectives to unravel the faces behind the manipulation of the National Youth Service’s (NYS) Integrated Financial Management Information System (IFMIS).

Devolution Cabinet Secretary Anne Waiguru invited the Directorate of Criminal Investigations to investigate what she termed a possible loss of Sh828.6 million through fraud.

While the Banking Fraud Investigations Unit (BFIU) was able to trace the processing of supply orders for road construction and building materials worth Sh122.2 million in the first transaction to the Principal Secretary at the Devolution Ministry, and to clear it as having undergone the laid down e-Procurement procedures; it said only forensic analysis would establish those who had conspired to defraud NYS of Sh695.4 million in the second transaction.

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Investigators are now pegging their hopes on identifying forensically the Internet protocol address (IP address) of the computer used to make 18 entries in the NYS IFMIS, fictitiously awarding tenders to six companies for supply of materials, to establish who used the machines.

The Officer in Charge of the BFIU Joseph Mugwanga in a response letter to Waiguru on the progress of the probe, says only the forensic examination being conducted on the six computers seized from NYS employees, could unearth the person who made the fraudulent entries.

The investigations into the fictitious supply orders took a new twist after the NYS Director General Adan Harakhe, who is the holder of the Authority to Incur Expenses (AIE), insisted he had not approved the same, claiming that an unauthorised person had accessed the system.

Mugwanja, who was tasked by the Director of Criminal Investigations Ndegwa Muhoro to personally undertake the probe, says although no money was lost, there was a strong case of a conspiracy to defraud the service.

“Although no evidence has been obtained to reflect loss of funds in respect of this particular commitments, the entries made in the NYS IFMIS, if indeed they were not made by the AIE holder Harakhe, then constitute a case of conspiracy to defraud NYS the amount committed through thosr fictitious supply orders,” Mugwanja said in his brief to Waiguru dated June 19.

He adds: “The forensic analysis report by the cyber crime unit, which is still awaited, will unravel this mystery”.

The brief from Mr Mugwanga discloses that Harakhe had denied approving requisitions made on May 20 and 21 this year, which total h 828.6 million.

However, Mugwanja says they were able to trace the processing of three supply orders numbered 4636, 4633 and 4632, totaling to Sh133.2 million, which he says indicates that they were awarded through a letter signed by the Devolution PS.

But it is the other 18 transactions indicated to have been approved by Harakhe and submitted by a Regina Nyambura Mungai that have raised the storm of a possible fraud after the manipulation of the IFMIS. However, Harakhe and Ms Mungai have disowned the transactions.

Fictitious awards

“It is only a cyber crime report which can prove contrary (against the involvement of the two) by identifying forensically the IP address of the particular computer used to make these entries,” states the report by the BFU.

Curiously, the six companies fictitiously awarded the tenders are according to the investigators, owned by three individuals: Josephene Kabura Irungu, Peter Omwari Otwoma and Carolyne Njambi Kinuthia, with all indicated to have been registered between November 11 last year to January 5 this year.

Ms Irungu is the sole registered director of Form Homes Builders that was granted four tenders worth Sh154,950,000. She singularly owns another two companies: Roof and All Trading and Reinforced Concrete Technologies, which were awarded tenders worth Sh77.2 million and Sh115.8 million respectively.

Suspiciously, the three companies registered under Irungu were all added to the roll of companies on November 11 and November 12.

Mr Otwoma and Ms Kinuthia are listed as co-directors of Draco Capital with a supply tender of Sh 115.8 million. Tegmen Trading was granted a supply tender of a similar amount.

Otwoma is also the sole director of another company, Grumum Engineering, which was also awarded a tender of a similar amount.