How scheme to defraud Sh2.6b from Migori County was unearthed
By Paul Ogemba
| October 15th 2021
An investigating officer has narrated how a conspiracy by traders suspected to be proxies of Migori Governor Okoth Obado to defraud millions of shillings from the county was uncovered.
Robert Cheruiyot Rono, an investigator with the Ethics and Anti-Corruption Commission (EACC), testified that their analysis of evidence gathered showed Obado’s government paid 23 companies owned by some of his proxies a total of Sh2.6 billion in a scheme that involved massive fraud.
“The companies, which are associated with close families members, allegedly conspired to misappropriate public funds from the County Government of Migori where they were awarded tenders worth Sh2.6 billion between 2013 and 2017,” said Mr Rono.
Rono was the first witness in the case where Obado, his four children and six family members alleged to be his proxies, and their companies are charged with conspiracy to defraud Sh256 million from the county government.
The children facing charges are Dan Achola, Scarlet Susan, Jerry Zachary and Evelyne Odhiambo.
Businessman Jared Oluoch Kwaga, his wife Christine Akinyi Ochola, mother Penina Auma, brothers Joram Opala Otieno and Patroba Ochanda Otieno, and sister-in-law Carolyne Anyango Ochola are also enjoined in the case.
The prosecution alleges that they registered six companies–Mbingo Enterprises, Misoft Ltd, Tarchdog Printers Ltd, Kajulu Business Ltd, Victorious Investments Ltd, and Deltrack ICT Services Ltd–which they used to siphon public funds from the county government.
Rono testified that the companies were registered shortly after Obado was elected governor in 2013, after which they were awarded multi-million shilling tenders to supply goods and services to the county government.
“All the companies were registered almost at the same time and then awarded contracts involving substantial amounts of money,” he said.
According to the investigator, they zeroed in on Kwaga who they believed was the architect of the scheme to defraud the county government, and acted as the governor’s proxy in misappropriating the funds.
Rono presented to court an analysis of payments made through the Integrated Financial Management Information System that showed how the 23 companies were paid the Sh2.6 billion within four years of Obado’s first term in office.
His evidence showed that Mbingo Enterprises received the largest amount of Sh356 million between 2014 and 2017, followed by Misoft Ltd, which was paid Sh292 million in the same period.
“Our analysis of the evidence also showed that the other companies were paid between Sh1 million to Sh250 million within a short period, which raised suspicion that they were engaged in the scheme to misappropriate public funds,” said Rono.
The investigator’s testimony was, however, cut short after lawyers for the accused persons protested that he was relying on documents that they had not perused.
Trial magistrate Lawrence Mugambi ruled that Rono will proceed with his testimony on Tuesday next week after the hearing of an application by the prosecution to amend the charge sheet and introduce more evidence.
In its opening statement, the prosecution told the court that Obado’s graft case involved a well-planned conspiracy to defraud the county government through conflict of interest, money laundering, economic crimes, and unlawful acquisition of public properties.
Lead prosecutor Peter Kiprop said that they will prove that Obado knowingly acquired Sh73 million indirectly through his children from the companies owned by Kwaga and his family, who were awarded multi-million shillings contracts.
In the first instance, Mr Kiprop said that Obado received Sh38 million through his children when the money was paid as school fees and allowances to colleges in Australia, Ireland and United Kingdom where they were studying.
Kiprop said that Obado indirectly acquired another Sh34 million from the county government that he used to buy a house for his daughter in Nairobi’s Loresho estate.
The hearing was adjourned to Tuesday next week.
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