State seizes Sh97 million looted in NYS scandal

NYS scam suspect Ben Gethi at a Milimani court during a mention to fix a hearing of their case 13/6/2016 PHOTO BY GEORGE NJUNGE

The Government has seized nearly Sh100 million from suspects implicated in the National Youth Service scam where more than Sh791 million was stolen.

On Friday, the Assets Recovery Agency (ARA) said it has seized Sh97.68 million belonging to Ms Charity Wangui Gethi, the mother to Ben Gethi, one of the key suspects in the NYS fraud and a Mr Samuel Mdanyi Wachenje alias Sam Mwadime.

“It is hereby ordered that the total amount of Sh97.68 million be deposited into account number 1000320079 at the Kenya Commercial Bank (KCB) in the name of the applicant until the final determination of the matter,” reads a gazette notice by Muthoni Kimani, head of the Assets Recovery Agency.

The agency said it has recovered Sh79.67 million held in Faulu Micro Finance Bank in the name of Charity Wangui Gethi. Also, Sh10 million held in a Family Bank account belonging to Sam Mwadime has also been seized.

An account at Standard Chartered Bank holding Sh7.8 million and another at Old Mutual Money Market Fund with Sh204,000, in the name of Charity Wangui Gethi, have been frozen.

“Preservation orders be and hereby issued for a period of six months prohibiting the respondents from transacting, transferring and or any other dealings with respect to Sh97.7 million being part of the Sh791 million stolen from the National Youth Service,” states the ARA in a gazette notice.

The recent development is a major win for investigators on the scandal that has seen twists and turns since being made public in 2014.

Early last year, the Director of Public Prosecutions Keriako Tobiko recommended that money laundering proceedings be opened against 11 suspects. These are Mr Benson Gethi and some of his family members including his mother Charity Wangui Gethi, cousin Anthony Gethi Kihara and sister Jedidah Wangari Wangui.

Also charged included Ms Josephine Kabura who revealed at a public inquiry that she was working as a proxy for former CS Ministry of Planning and Devolution and current Kirinyaga Governor-elect Ms Anne Waiguru.

Others accused of being part of the embezzlement of the funds that were later used to purchase high-end vehicles and houses include John Hope Vandamme, Paul Kinuthia Gachoka and Samwel Wachenje.

ARA had earlier last year sought and obtained orders to seize some assets including three Toyota Prado vehicles, a plot of land in Ruiru valued at Sh4 million and a maisonette in Nairobi’s Kasarani Estate.

In August last year, however, Charity Gethi successfully managed to have her name struck from the case after prosecutors failed to provide verification that the properties listed in the suit belonged to her.

Sections 81 and 82 of the Proceeds of Crime and Anti-money Laundering Act gives the Assets Recovery Agency the authority to apply for a court order stopping the transaction of monies or property suspected to be the proceeds of crime or money laundering.

This is one of the high profile cases that the ARA is pursuing since the Enactment of the Proceeds of Crime and Anti-money Laundering Act in 2012. This is a major test to the agency and the Banking Fraud Investigations unit that is playing a key role in the investigations.

If convicted, the accused could face up to 14 years in jail or a fine not exceeding Sh5 million or the amount of the value of the property involved in the offence, whichever is higher or both.

Banks involved

Corporate bodies found culpable of the offence will also be liable to pay a fine not exceeding Sh25 million or the amount of the value of the property involved in the offence whichever is higher.

The Anti Money Laundering Act 2012 introduced strict new laws for financial institutions including requirements for any transactions of more than Sh1 million be reported to the Financial Reporting Centre. Banks have been criticised for not adhering to the legislation in the wake of the NYS and other scandals that have been made public in the recent past.

Early this year, Parliament recommended investigations on 28 banks suspected of handling the Sh791 million siphoned from the NYS. These included Credit Bank, Ecobank, Equity, African Banking Corporation, Bank of Africa, Bank of Baroda, Barclays, CFC Stanbic, Guaranty Trust Bank, Gulf African and Housing Finance.

Others include, I&M, Jamii Bora, NIC, Chase Bank, Consolidated, and First Community Bank, Paramount, Sidian, Standard Chartered, Transnational, Faulu, Old Mutual and National Bank of Kenya.

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