The anti-corruption court has ordered one of the suspects in the National Youth Service (NYS) scandal to forfeit Sh1.1 billion to the State.
James Thuita Nderitu (pictured) is said to have received Sh1.1 billion from NYS between March and October 2017 for goods and services that he did not deliver, yet the money flowed into his 10 bank accounts.
In his defence, Mr Thuita told the court that his business involves transferring money from one entity to another.
Questioned further, he argued that he runs a wide range of businesses.
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Thuita produced two payment entries from the Lands ministry to his accounts, one for Sh24 million, the other for Sh36 million, to prove that he has been doing business with a number of government entities outside of the NYS.
The explanation, however, failed to convince Justice Mumbi Ngugi, who on Wednesday allowed the Assets Recovery Agency (ARA) to go after the suspect’s wealth.
According to Justice Ngugi, Thuita failed to show what he supplied to the NYS for the money he received.
“In my view, the respondents needed to go beyond the allegation that they have wide-ranging businesses and show how these businesses translated to the credits of millions from the State Department of Public Service and Youth under which the National Youth Service falls,” ruled Ngugi.
Lawyer Peter Ngumi for ARA told the court that Thuita’s hand in the NYS cookie jar was traced through five companies: Flagstone Merchants Ltd, Firstling Supplies Ltd, Excella Supplies Ltd, Flagstone Co Ltd, and Interscope Tech and Services.
It is through these companies – one of which Thuita co-owned with his estranged wife Yvonne Wanjiku, and another with Betty Wajewa, who according to court records is the suspect’s wife – that the NYS loot came in, was distributed and the bigger chunk of it vanished.
By the time ARA was combing through Thuita’s accounts in 2018, only Sh41 million was left across two bank accounts.
“Upon analysing the bank statements and documents concerning the accounts of the respondents, it emerged that they received funds fraudulently from the NYS and associates, split in several transactions,” the court heard.
“The money received from NYS and associates through their business entities and personal accounts was further intra-transferred into accounts owned by their family members and associates,” Mr Ngumi told the court.
Some of the stolen money, the court heard, ended up as tax paid to the Kenya Revenue Authority (KRA).
The court was told that the taxman may have earned Sh1 million from the loot, which can neither be frozen nor recovered.
The court further heard that Thuita received Sh195 million from NYS on March 21, 2017. However, the court concluded that the money that landed in his accounts in the first payment was higher, with Ngugi noting that the actual amount was Sh235 million.
It also emerged that in a span of a week – between July 4 and July 13, 2017 – Firstling Supplies, a company Thuita co-owned with Ms Wanjiku, received Sh795 million wired in eight instalments.
The account now has Sh6.28 million.
The court heard that Wanjiku and Thuita were once married but at the time the case was filed, they had separated.
Thuita is said to have wired Wanjiku an unknown amount of money in child support.
He, however, told the court to leave the mother of his children out of the case, claiming that she was not involved in running the business after their separation.
He also wired Sh2 million from the Firstling Supplies account to Ms Wajewa, his second wife.
In court, Thuita argued that payment and movement of money did not amount to laundering. He told the court that his bank accounts proved that he is a businessman who has legitimate dealings with various government entities.
He further argued that forfeiting wealth to the State should only happen after a suspect is convicted by a criminal court, which he has not been.
“The right forum in which a conviction can be made and a declaration that property is ill-gotten is the criminal court,” he said
“The money in contention is the subject of a trial court. It is at the trial court that a finding will be made that a crime was committed.”
Thuita, alongside former Youth and Gender Principal Secretary Lilian Omollo, is facing fraud charges.
Last week, Ngugi ordered Mrs Omollo to forfeit Sh33 million to the State, ruling that she could not explain how she earned it.
The former PS had told the court that the money was earned from farming, her salary and her husband’s salary from a consultancy firm in South Sudan.