Former Family Bank CEO Peter Munyiri among seven charged for money laundering
By Standard Reporter
| Dec 31st 2016 | 3 min read
Former Family Bank Chief Executive Peter Munyiri, together with other top officials, was charged in court for money laundering in a historical prosecution.
Munyiri, alongside six others who have all been sacked, including KTDA Branch Manager Robert Oscar Nyaga, was charged for the offence linked to the National Youth Service scandal.
Nine counts, including failure to report unusual transactions carried out by the chief suspect Josephine Kabura Irungu’s three bank accounts, were brought before the seven.
They all denied the charges read to them at the Milimani Law Courts in Nairobi.
They were each released each on a Sh1 million bond or Sh300,000 cash bail.
“Failure to report suspicion regarding proceeds of crime,” the charge sheet read in part.
Directorate of Criminal Investigations is suing the suspects including Charles Kamau Thiongo, Raphael Mutinda Ndunda, Nancy Njambi, Meldon Awino Onyango and Josephine Njeri Wairi, on behalf of the State.
Details of the charges showed that the bank officials knew about the suspect dealings in bank accounts belonging to Kabura’s companies namely Forme Builders, All Trading and Reinforced Concrete Technologies.
“Between December 22, 2014 and May 19, 2015 at Family Bank Kenya Tea Development Authority branch in Nairobi, Munyiri and others failed to report anti-laundering money suspicion,” the charge sheet read further.
The charged officials however “abetted and aided” Ms Kabura to launder money through the bank, the charges read further. It is at the Nairobi branch of the bank where millions from the suspected fraud estimated to be worth Sh1.6 billion, was withdrawn and distributed.
Forme Builders transacted Sh218,850,000, another Sh252,150,000 was moved through All Trading while Reinforced Concrete Technologies received Sh320,160,000, all from the NYS accounts held at the Central Bank of Kenya. Banking regulations require that any transaction worth Sh1 million ($10,000) be flagged and reported to the CBK if there is reason to believe it is unusual and suspect.
The case will be mentioned on January 20, 2017. Yesterday’s prosecution came weeks after the CBK, as the banking industry regulator, approved of it early last month. CBK Governor Patrick Njoroge said in a response to the Director of Public Prosecutions Keriako Tobiko letter dated August 12, that the officials should be prosecuted and added that the action would not have any direct bearing on the industry.
Mr Tobiko had sought the advice from the CBK governor on whether the prosecution would rattle the industry, but Njoroge reckoned that such a move would instead bring about a sense of responsibility.
“The prosecution of the officials will have a positive effect on the sector and enhance accountability,” said Njoroge in response. Arising from the prosecution of the Family Bank ex-officials, the stage is now set for possible investigation and charging of employees of other banks that were involved in moving the Sh1.6 billion lost from the NYS. Several other banks have been mentioned in the NYS scandal.
Family Bank has previously claimed it was not the only institution that handled the monies that the other banks should also be investigated. So far CBK has fined Family, Sidian and Faulu Banks over the scandal.
Some MPs at PAC raised concern that not all the banks involved have disclosed how much of the NYS money went through their institutions and that it was difficult to know the magnitude of the transactions at the Government agency.
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