Former Kenya Union of Savings & Credit Cooperatives (Kuscco) chief executive George Ototo yesterday surrendered to the court, ending four days of a police hunt for him over alleged theft of Sh82.8 million through a bogus land deal.
Mr Ototo, accompanied by lawyer Apollo Mboya, appeared before Milimani senior principal magistrate Dolphina Alego and was later remanded at Muthaiga Police Station in Nairobi until today for bail determination.
He was summoned last week to appear in court over theft and money laundering charges after he allegedly went into hiding following a police raid that targeted three other former Kuscco executives and the organisation’s former lawyer.
His surrender came in the middle of investigations at Kuscco following a forensic audit by PricewaterhouseCoopers (PwC) detailing theft, cooking of financial statements, forgery and conflict of interest in a fraud estimated at Sh13.3 billion.
State prosecutor James Gachoka said that Mr Ototo had gone underground during the raid that saw the arrest of the three former executives – George Magutu (chairman), George Owino (finance manager) and Mercy Muthoni (advocacy manager).
Kuscco’s former external lawyer, Jackline Omolo, faces charges over the bogus land deal, including preparing a fake land purchase agreement, money laundering and stealing.
The four have been in police custody since Thursday last week denied the eight counts of conspiracy to commit a felony, stealing, uttering false documents and money laundering. Mr Gachoka said the five will appear in court today for bail determination.
Mr Mboya told the magistrate yesterday that Mr Ototo was unaware of the case and only learned about the arrests and suit from the media.
The four were charged that on diverse dates between October 2020 and April 2022, jointly with others who were not before the court they conspired to steal by diverting money Sh82,826,000 property of Kuscco for the purchase of a parcel of land in Nairobi.
The land transaction is one of a string of irregular deals highlighted in the PwC forensic audit.
The audit first indicated the purchase of land in 2020 for Sh48.3 million, citing the seller as Catherine Mbugua.
It later showed a payment of Sh35 million for the same land in 2022 as a fresh deal.
Kuscco did not receive a title for the land and PwC reckons that it did not find records in government databases showing the property transaction. The land was also not recorded as an asset in Kuscco’s books.
PwC established that the land is shown in official records as being part of Ololua forest, and not for private use.
Ms Omolo was cited for conflict of interest because she appeared as Kuscco’s and Ms Mbugua’s lawyers in the land deal.
Proceeds from the fake land deal, which lacked Kuscco’s board approval, were used to conceal payments for a radio station.
Mr Ototo will be charged with six counts, according to the police charge sheet. The six include stealing, money laundering, fraud and preparing a false document or fake land purchase agreement.
The fake land purchase agreement was meant to offer comfort to KCB Bank and M Oriental for the flow of Kuscco’s cash accounts via the two banks.
The charge sheet presented in court indicates that Mr Ototo and the other former Kuscco executives were aware the Sh82.8 million were proceeds of crime and that the fake agreement was meant to conceal the nature and source of the money placed in the bank accounts of Jackline P.A Omolo & Advocates.
In another charge, they were accused of stealing by directors and officers of the company and making of false documents against the law.
Defence lawyers led by Caesar Wanjau, Okore Jayalo and Otieno Mugla urged the court to grant lenient bail terms.
“Your honour I pray for leniency. Consider the period when the alleged offence took place and also the fact that the accused had been cooperative during the probe,” Mr Wanjau prayed.
Mr Mugla, representing Ms Omolo, argued that the lawyer was caught in the crossfire and that she was not involved in the fraud.
He urged the court to grant her favourable bond terms given that she only prepared the sale agreement for the land in dispute.
