Sila's two lives: In the red in US, but a 'thriving' investor here

When Jeffrey Sila Ndungi was jailed in the US over a syndicate involving hacking, the Asset Recovery Authority (ARA) thought it had a field day.

ARA moved to the anti-corruption High Court in 2021 claiming that Sh14 million in ABSA Bank Kenya should be forfeited to the government.

The agency relied on the judgment and court documents from US as part of its argument that Ndungi had received over Sh50 million, which it believed was proceeds of crime.

Three years later, a fatal blunder by ARA had the court rule in favour of Ndungi. Justice Esther Maina has now ordered that the money that had been frozen be released to him. According to her, ARA never explained how and where it got the information.

At the same time, Justice Maina said there was no evidence whether ARA was acting on behalf of Kenyan government or was acting upon the request by the American government.

“Certainly, if the information was not obtained through a request made by our Attorney General under Section 115(1) of the POCAMLA then the information cannot be received as evidence by this court. Rather it is what would remain to be mere information which was not converted into evidence and hence not of any probative value,” said Maina.

Ndungi was jailed in the US in connection to a syndicate allegedly stealing from dead pensioners. In Kenyan court, ARA claimed he may not have been the only player in the scam as he received half of the amount.

In response, Ndungi painted himself as a prolific businessman with interest in aviation and money markets. He alleged that he owns two aircraft and that are hired for commercial and training purposes and pumping in $50 (Sh6,600) to $80 (Sh10,500) per hour. 

Ndungi also claimed he owns trucks under the name Digital Cargo Forwarders Ltd and had a stake in money markets, which he invested through Genghis Capital.

At the same time, Ndungi said, he lent money to his relatives and friends who would then repay by depositing money directly to his accounts.

Ndungi was charged and convicted of stealing and converting to his own use, property of a value exceeding $1,000 (Sh132,400) belonging to the US government and that the conviction on count 1 and 2 was upheld by the Court of Appeal.

However, in court, Ndungi argued that Absa never flagged the money. On the US charges, he argued that one of the prayers before court was he forfeits everything he had obtained in addition to US dollars 48,000.

He argued that the court in the US dismissed the forfeiture claim and instead directed that the US government compensate him. Nevertheless, Ndungi admitted that he was arrested in the US in 2016 with a USD 76,592.86 cheque and he was convicted.

He asserted that the conviction was out of a cheque that was never encashed. According to him, there is no evidence showing he had successfully stolen from the US or any person.

In addition, Ndungi said, he was jailed by the circuit court but was allegedly acquitted upon appeal. In 2016, the Internal Revenue Service (IRS) – the US equivalent of Kenya Revenue Authority – began investigating a scheme involving stolen tax refund cheques.

The IRS believed the scheme was being run out of Kenya and suspected one Lydia Breaux of acting as a stateside operative.

Breaux soon confided to an undercover IRS agent that Ndungi had entered the US from Kenya with a large tax refund cheque in need of cash.

The trio (the IRS agent, Breaux and Ndungi) met in a restaurant in Dallas, Texas to negotiate the purchase of the cheque by the IRS agent.

At this meeting, Ndungi showed the agent a picture of the cheque, made out to an individual named Cynthia Short and who had since died.

Ndungi also assured the agent he could get him a fake driver’s licence in Short’s name. Negotiations continued for a week until the trio met again to close the deal on August 9, 2016. The IRS agent bought the cheque at Sh4.8 million.

From the conversation, it appeared Ndungi was running a separate syndicate in the US, printing fake drivers’ licences. Ndungi promised to make for the agent a “nice-looking number plate”.

“I will make you a driver’s licence, you pay me. Email it, give me your email address and I will send it to you, perfect colour,” Ndungi is quoted to have told the agent.

A few days later, Ndungi made good his promise and e-mailed the agent a fake driver’s licence in Short’s name. 

He was later arrested and jailed for 10 years but he successfully appealed and is awaiting fresh sentencing.

Justices Patrick Higginbotham, Jennifer Elrod, and Catharina Haynes unanimously agreed that a Northern Texas Jury wrongly convicted him.

The three judges ruled there was insufficient evidence to pin Ndungi and ordered that he should be re-sentenced.