Data Hub

Not so fast Mr Moneybag: Kenya steps up the fight against dirty cash inflows

arrest

When Khalid Jameel Saeed Hamad, a Bahraini national jetted into the country from Germany on January 13, he did not know that the police were trailing him.

The businessman later took a flight to Mombasa and attempted to deposit huge sums of money at a bank in the coastal city but the lender declined because he failed to disclose the source of the money.

Still carrying the money, he flew back to Nairobi and made a second attempt, which was promptly declined because he was not ready to disclose the source of money.

After failing on the second attempt, Mr Hamad booked a flight on EgyptAir and was scheduled to fly out on January 28.

Luck was, however, not on his side. He was arrested by police officers after failing to declare the millions he was carrying.

Mr Hamad is now fighting criminal charges and at the same time, a bid by the Assets Recovery Agency (ARA) to forfeit the money to the State.

He is the latest foreigner to face the heightened implementation of the Proceeds of Crime and Anti-Money Laundering Act (PoCAMLA). In the last few months, the State has stepped up surveillance, netting hundreds of millions of shillings in suspected dirty cash.

Also in Mr Hamad’s shoes are two Nigerians and a Congolese seized by detectives with huge sums of money, which they failed to declare to customs officials, when they entered the country.

Under the Anti-Money Laundering law, anyone entering the country at any port, while carrying more than Sh1 million is required to declare the amount at the customs officials desk.

The Act, which was enacted in 2009 makes it is an offence for one to intentionally transport, transfer, receive or attempt to transport money, with the intention of concealing it.

Last month, the High Court allowed the agency to keep $977,075 (Sh111 million) seized from Mr Hamad, pending conclusion of investigations into the source of the funds.

Court documents show that Mr Hamad arrived at Jomo Kenyatta International Airport (JKIA) on January 13, but failed to declare that he was carrying bulk cash.

The Bahraini was to depart the county at 7:30 am on January 28, when customs officials noticed that he was carrying the bulk cash and when asked why he was carrying the huge sums, failed to give a reasonable explanation.

He also could not table a document to show why he was in possession of the cash or a declaration of being in possession of the money from his point of origin, or documentation to support the source, purpose or movement of the cash.

“The failure of the respondent to declare being in possession of funds in excess of $10,000 in cash and not having a reasonable explanation nor supporting documents to support the legitimacy of the cash raises reasonable suspicion of a money laundering schemes executed in an effort to conceal, the nature, source, location, disposition, or movement of the funds,” ARA said in court documents.

The court allowed ARA to transfer the funds from Kenya Revenue Authority (KRA) to its accounts.

In another case, last November a Nigerian national tried to sneak into the country $28,000 (Sh3.2 million) concealed in a jacket and textbooks.

The money was sent to Mr Peter Oluwafemi Olaiwon from a woman in the United States (US), and ARA faulted him for failing to declare the money or the source leading to the suspicion that he was using Kenya as a smuggling route for illicit funds.

“There are reasonable grounds to suspect the funds in issue may be a direct or indirect benefit, profits and or proceeds of crime obtained from a complex money-laundering scheme or intended for the commission of the crime and are liable to be forfeited to the State,” the agency said after taking Mr Olaiwon to court.

The money was sent from South Carolina, US by a woman identified as Linda Dye, and had been concealed in a bag that contained a jacket, six novels, seven T-shirts and two shirts.

When asked about the source, Mr Olaiwon said it was from his aunt (Linda) who didn’t know that she was supposed to declare the cash.

The Nigerian, who claimed that he is a music producer, which earns approximately $2,000 (Sh227,260) per month as well as poultry farming which also gives him an income of approximately $44,000 (Sh5 million) per year, said he was coming to Kenya on holiday.

“That when I came to Kenya I had about $4,000 (Sh454,520) in my account for use during my holiday,” he said a statement filed at the agency.

Mr Olaiwon was charged on November 8, with offences of financial promotion under the PoCAMLA law. He denied the charges and was released on a cash bail of Sh150,000 and a personal bond of Sh200,000.

Before that, yet another Nigerian national was arrested by customs officials carrying more than Sh100 million at JKIA while on transit to Dubai.

Mr Mauzu Bala was detained on December 4, 2020 on his way to Dubai while carrying $880,000 (Sh100 million), 60,000 euros (Sh7.74 million) and 63,000 naira (Sh17,010), in his handbag.

He had arrived in the country on a Kenya Airways flight from Lagos, and was waiting for a connecting flight to Dubai.

His attempts to get back the money, so that he could proceed with his journey, was rejected by the High Court, saying his application was premature.

He claimed that he declared the currency in Nigeria before boarding the plane to Nairobi.

He told officials at the airport that he was heading to Dubai for business but the agency said banks in Nigeria and Dubai would easily facilitate transfer of money within the two countries.

Mr Bala argued that he has not been charged with any offence and the money should therefore be released.

“All the respondent is concerned with is to confiscate my hard-earned money and have me deported,” Mr Bala said in an affidavit.

“At the Murtala Mohammed International Airport, I declared the currency and was cleared by customs for travel. I checked in the consignment and as is the usual norm in international travels, my next declaration point would have been Dubai International Airport,” he said.

He said he was surprised to be cleared by KQ back in Lagos with ‘undeclared currency’ only for officials to pounce on him in Nairobi.

“The intention at the time could have been only to deprive me of my money,” he argued.

He accused the officials of confiscating all his documents including the customs clearance forms from Lagos, his passport, currency declaration acknowledgement from Dubai, as well as a declaration letter from Shah Jewellery Trading LLC.

He also attached a letter from Ahammed Shuhaib, a partner of Shah Jewellery, who claimed to own the money and that Mr Bala was just his agent.

ARA opposed the application, however, saying the documents tabled by Mr Bala were suspect as some were dated a day after he had been intercepted at JKIA.

The agency said Mr Bala was indicated as courier and not the owner of the funds and investigations were still ongoing to establish the authenticity of the documents. The court heard that there are reasonable grounds to believe that the funds were proceeds of crime.

The agency said his failure to declare that he was carrying such a huge amount and without a reasonable explanation, or documents to support the legitimacy of the cash, raises suspicion of money laundering.

A Congolese, Venan Ma-Mabiala Mabiala, and a Belgian partner Jean–Pual Tshikangu Musangu, are also fighting for the release of more than Sh287.2 million, frozen by the High Court last month.

The duo are also fighting for the release of a Mercedes Benz, which was seized over suspicion that it is proceeds of crime.

Both are directors of Groupe Elykia Ltd, a company that allegedly deals in timber but which does not have an office or registered address in Kenya.

Evidence presented to court showed that the company received $5 million from a Mr Dmitri of Vandome Company in October, for the purchase of timber, which they are yet to supply.

The state agency said an analysis of one of the accounts showed that a company known as Car Warehouse Ltd, received Sh39.7 million on November 16, from Groupe Elykia Ltd, for the purchase of two high-end motor vehicles- a Mercedes Benz and Bentley Bentayaga.

The Mercedes Benz was imported into Kenya and delivered to Mr Musangu, but the Bentley Bentayaga is yet to be brought into the country.

“There are reasonable grounds to believe that the suspects bank accounts were used as conduits of money laundering in an effort to conceal, disguise the nature, source, disposition and movement of the illicit funds and should be preserved,” ARA’s Mohamed Adow told the court.

He told the court that they believe that the accounts are used as a conduit of deceit and money laundering under the pretense of supplying timber obtained from Democratic Republic of Congo to other countries, although nothing has been supplied.

One of the accounts registered in Mr Musangu’s name has $305,950 (Sh34.6 million), a second account belonging to Mr Mabiala has $488,423 (Sh55.1 million) while a third account registered in their company’s name (Groupe Elykia) has $1,747,105 (Sh197.4 million).

The court directed Mr Musangu to surrender the logbook of the Mercedes Benz (KDE 033S) and the Director-General of National Transport and Safety Authority to register a caveat against the vehicle.

“There are reasonable grounds and evidence demonstrating that the funds held by the respondents in the specified bank account are direct or indirect benefits, profits or proceeds of crime obtained from a complex money-laundering scheme and are liable for forfeiture,” the court heard.

[email protected]