Banking fraud detectives Monday obtained court orders freezing 20 bank accounts linked to the theft of Sh800 million from the National Youth Service (NYS).
The Nairobi Chief Magistrate issued the orders after the Banking Fraud Investigation Unit (BFIU) officers presented evidence showing proceeds of the financial scam that has put Planning secretary Anne Waiguru in the eye of a political storm were moved to the accounts.
The BFIU said its detectives needed time to probe the accounts where the Sh800 million lost in the NYS scam is kept. The accounts are with 11 banks in Nairobi.
The NYS scandal first came to light in June after it was discovered that about Sh800 million had been irregularly transferred from NYS’ Integrated Financial Management System (IFMIS) accounts to a supplies company-Form Home Builders- for procurement of building materials.
Police believe the money was then transferred from Form Homes to the 20 bank accounts, belonging to a number of companies, law firms and individuals. BFIU wants the accounts frozen until it has completed its investigations.
“Money, which was fraudulently obtained from the National Youth Service, was sent to Form Home Builders’ account at Family Bank then transferred to the above accounts. I pray that this court issues the BFIU with a funds preservation order and a warrant to investigate the accounts,” detective Jeremiah Sautet said in his application.
The BFIU has flagged five accounts at Kenya Commercial Bank (KCB), four at Barclays, two each at Standard Chartered and Chase Bank and one each in Prime Bank, Paramount Universal Bank, Family Bank, Commercial Bank of Africa, K-Rep and Diamond Trust Bank.
Ms Waiguru, in whose docket the NYS fall, has been under pressure to resign over the scandal from the Opposition and some members of the ruling Jubilee coalition.
Nandi Hills MP Alfred Keter, who is a member of the Jubilee coalition through the United Republican Party, has filed a Motion seeking to impeach Ms Waiguru over the scam.
Detectives are seeking the court’s authority to access the account opening documents, cheques and withdrawal slips used in various transactions from May 1 last year to date.
Mr Sautet states that investigations into the scam started after the NYS reported the alleged theft in which more than 20 senior government officials have been implicated.
Police also want to interrogate bank officials who helped open the bank accounts and those who oversaw the various transactions conducted in the said period.
Mr Sautet says that an NYS official in May discovered that his name had been used to validate fraudulent payments to Form Home Builders through the IFMIS platform, which is used to process government procurement and to pay for goods and services.
“For the purpose of this investigation, it would be desirable to get information on the above named bank accounts. The information will go a long way in assisting the investigations being undertaken by the BFIU,” the fraud detectives said in documents filed in court.
The list of firms whose accounts the BFIU wants to freeze includes Petnah Chemicals, Mape Building and General Engineering, Azipharm Limited and Brownfield Development Limited.
Law firms M M Gitonga & Associates, Ogola & Company, Waweru Kihara & Company, L G Kimani & Company, Wainaina Ireri & Company and Glinnis Kigera & Company are also listed as owning some of the accounts.
Ms Waiguru in June distanced herself from the shadowy dealings, saying she was the one who asked for investigations into the scam after she got wind of it.
The minister reckons that senior ministry officials detected an attempt to hack into NYS systems and raised alarm, which led to the investigations.
The scam has left several government officials in a tight spot after the Director of Criminal Investigations Ndegwa Muhoro recommended the prosecution of at least 21 NYS and Planning ministry employees.
Director of Public Prosecutions Keriako Tobiko has, however, asked for a joint investigation, which includes the Ethics and Anti-Corruption Commission, the Central Bank of Kenya, Financial Reporting Centre and the Kenya Revenue Authority.
Mr Tobiko said the crimes committed fell under multiple agencies and laws such as the Proceeds of Crime and Anti-Money Laundering Act and the Prevention of Organised Crimes Act.
Mr Muhoro had recommended that NYS employees, including Senior Deputy Director Adan Harakhe, Samuel Wachenje, Hendrick Ntongesa Pilisi, Naftaly Githinji, Ruth Njeri Hihu, Charles Onsase Nyaachi, Mary Wangui Mbuthia, Ezekiel Karanja Kamau and James Gitau Kanuthu be arrested and charged with fraud.
Also in the list are Samuel Kilonzi, Fredrick Okello Nasiche, Regina Nyambura Mungai, Philip Joshua Otinga, Jane Wangeci Gichuki, David Dicks Alunga, Titus Libondo and Chemos Kororia Ndiema.
Ministry of Devolution and Planning officials Joel Kanyi Karenju, Francis Kariuki, Jennifer Manyara Mugure and Roda Kavu Makau are also facing prosecution over the scam.