NYS theft case widens with freeze of additional assets

Embattled businessman Ben Gethi yesterday suffered yet another setback in the case involving the theft of Sh791 million from the National Youth Service (NYS) after the High Court issued fresh orders freezing properties belonging to his associates.

The Assets Recovery Authority (ARA) obtained the order after it filed a fresh suit against eight individuals it suspects of purchasing a number of assets, including three Toyota Prado vehicles, a plot of land in Ruiru valued at Sh4 million and a maisonette in Nairobi’s Kasarani Estate as part of a scheme to launder funds stolen from the NYS.

Sam Mwadime, his wife Susan Mndanyi and Anthony Kihara Gethi, Paul Gachoka, John Vandame, James Kisingo, John Kago and Mr Ben Gethi’s mother Charity are named as respondents in the suit.

Mr Kago, Mr Kihara Gethi and Mr Mwadime have been accused of transferring ownership of the property the ARA is seeking to seize after investigations into the NYS scam began.

ARA director Muthoni Kimani says the three transferred the property after detectives started investigating the Sh791 million theft in a bid to frustrate the recovery of public funds.

High Court judge Mbogoli Msagha consequently issued an order prohibiting the transfer or disposal of the property, adding to the long list of frozen funds and property associated with Mr Gethi.

“An order is hereby issued prohibiting the sale, transfer or disposal or any other dealings with the properties for 90 days to avoid loss of the said properties,” Justice Msagha ruled.

The judge further ordered that the motor vehicles be seized and surrendered to the police for detention by the Directorate of Criminal Investigations (CID) until further orders are issued.

The defendants have yet to respond to the suit.

The NYS scandal first came to light in June after it was discovered that nearly Sh800 million had been irregularly transferred from NYS’ Integrated Financial Management System (IFMIS) accounts to three companies for procurement of building materials.

Police believe the money was then transferred from the supplies firms to 20 bank accounts, belonging to a number of companies, law firms and individuals and has sought a freeze of the bank accounts until investigations are complete.

An interim report by the Banking Fraud Investigation Unit (BFIU) revealed that Mr Ben Gethi may have been the biggest beneficiary of the Sh791 million scam, having used the money to buy several assets through proxies.

The BFIU further reported that the many parcels of land and homes Mr Ben Gethi bought were registered to his family members.

The ARA director says Mr Kihara Gethi bought a Toyota Prado (KCE 852T) valued at Sh5.25 million and registered it to Mr Kago but later transferred it to Mr Gachoka to escape a recovery attempt.

Mr Kago, she adds, bought a similar vehicle (KCD 536P) valued at Sh5.07 million and registered it to Mr Kihara Gethi but later transferred it to Mr Vandame.

In an earlier suit filed by the ARA, Ms Kimani claimed that Mr Kago is an associate of Mr Ben Gethi’s who was used to acquire property worth Sh585 million.

The third Prado (KCE 874R) was allegedly bought by Mr Mwadime at Sh3.3 million and registered to Mr Kisingo. Mr Mwadime is also believed to own the Sh21.85 million maisonette, he allegedly registered to his wife Susan.

Mr Mwadime is among the 26 suspects charged in connection with the theft of Sh791 million.

The three companies are owned by businesswoman Josephine Kabura, who is among the 26 suspects charged alongside Ben Gethi, former Planning principal secretary Peter Mangiti, and suspended NYS director-general Nelson Githinji.

“Investigations have revealed that the respondents are beneficiaries of funds stolen from the Ministry of Devolution and Planning. The sequence of events, transactions and dealings reveal a clear case of money laundering.

“It is fair and just that benefits and assets procured using funds stolen from the public are proceeds of crime and should be recovered and applied for public good,” Ms Kimani said in her application.

The ARA director reckons that the defendants are aware of the investigations and may seize the opportunity to dispose of any assets acquired with funds stolen from the NYS if an order barring any dealings with the said property is not issued.

In the suit filed earlier, the ARA has sued Mr Ben Gethi, his mother and sister, Ms Kabura, Mr Kago and lawyers Patrick Ogola and Marin Muthomi.

The two lawyers have been accused of helping the perpetrators of the NYS looting to launder cash through the purchase of vast assets.

Ms Kabura’s firms are alleged to have received the Sh791 million that was stolen through manipulation of the Integrated Financial Management System (IFMIS), that government institutions use to make payments for goods and services.

In the earlier suit, the ARA had sought to seize a Range Rover Mr Kago bought and allegedly registered to lawyer Patrick Ogola. Mr Ogola has since denied that the vehicle is registered to him, arguing he does not have possession of the vehicle.

The lawyer last month claimed that Flying Squad officers were given instructions to shoot anyone seen driving the Range Rover believed to be worth Sh23 million.

READ: NYS scam lawyer alleges shoot to-kill order over Range Rover

The ARA has said in court that the vehicle has not yet been traced.

Bank accounts run by Mr Ogola’s law firm at I&M Bank were last month frozen after he attempted to transfer Sh26.9 million to a clothes dealer in Hong Kong. The lender argued that it believed the funds were being laundered.

The bank has, however, agreed to have the accounts unfrozen as the suit progresses, on condition that the law firm does not interfere with a disputed Sh26.9 million deposit that attracted the block.

READ: Ben Gethi lawyers get access to their I&M Bank account

ALSO READ: Judge recuses himself from Ben Gethi lawyer case

Justice Msagha has ordered the ARA to furnish the defendants with the suit papers, then agree on the earliest possible hearing date.