The High Court has ruled that Sh167 million frozen last year from alleged timber merchants are proceeds of crime.
Justice Esther Maina said she was satisfied that the money had been obtained illegally from a Dutch national on the pretext of selling him gold, which was not supplied.
The judge added that the money was not for timber sale, as they had alleged.
The frozen funds belong to Mubadala Merchants Limited, First Cargo Logistics Limited, First Line Capital Limited, and Doumbe Malonga Eddy Michel in Standard Chartered Bank and Co-operative Bank accounts.
“The court finds that the money was not properly obtained. The money is therefore liable for forfeiture to state,” the judge said.
Justice Maina, however, directed that the money remains frozen pending the determination of another case at the Commercial court filed by the Dutch rally driver Bernhard Ten Brinke.
The judge said there was no evidence that Mr Brinke was an accomplice but a victim of fraud.
Gold transaction
In April, the High Court froze several accounts in the two banks following an application by the Assets Recovery Agency (ARA), saying the owners were involved in a money-laundering scheme.
The rally driver joined the case last August, saying the money was his having wired the amount to a lawyer involved in a gold transaction sometime in January 2021, for the purchase of 500kg of gold, but the consignment was not delivered to him.
ARA, in its case, argued that the companies and Mr Doumbe used agreements supported with falsified custom declaration forms purportedly from Kenya Revenue Authority to support the transfer of funds into their accounts.
After receiving the funds, thelaw firm, Ochieng Opiyo Advocates,disbursed the cash to the said companies, ARA said, adding that the account opening documents declared that the nature of the business was electronics, stationery and general supplies.
While seeking to recover the money, Mr Brinke says he entered into a contract to purchase 500kg of gold with a man called George Fundu, through Global Freight Management ltd. He said Mr Elvis Ouma Muga alias Nick Muganda accompanied by his representative, visited a gold smelting premises and witnessed 50kg of gold being smelted.
His representative, Ewuot Haanstra, allegedly paid US $1,567,120 into an escrow account opened by the law firm for payment of 450kg of gold, but Mr Muga failed to deliver the precious metal.
Mr Muga has since been charged with conspiracy to defraud by pretending that he and others were involved in a genuine business of selling gold.
This was after Mr Haanstra made a complaint to the Directorate of Criminal Investigations.
Mr Brinke says that in the deal, the parties agreed to open an escrow account for the gold transaction through the law firm.
He further said the law firm was not to release the money without instructions from him. He said he transferred by SWIFT $1,567,160 (about Sh171 million then) from his account in the Netherlands on January 11 to the account opened at Sidian Bank to facilitate the consignment payments. But he was shocked to learn that the monies were transferred to several accounts without his instructions, to deprive him of the money.
