The first-term MP reportedly received more than Sh12.5 billion through three accounts in Rafiki Micro Finance Bank, in seven years, payments that have been labelled suspicious.
The Asset Recovery Agency (ARA) reckons in court documents that it traced Sh7.3 billion withdrawals through bank statements in accounts that were left with a balance of Sh200 million.
But the agency says there are no bank statements to show how the balance of Sh5.1 billion were withdrawn from the fixed deposit account in what it has termed “a complex scheme of money laundering”.
Anti-graft agencies cannot trace more than Sh5 billion that had been deposited in the bank accounts of Mathira MP Rigathi Gachagua, who is being investigated for alleged money laundering.
The first-term MP reportedly received more than Sh12.5 billion through three accounts in Rafiki Micro Finance Bank, in seven years, payments that have been labelled suspicious.
The Asset Recovery Agency (ARA) reckons in court documents that it traced Sh7.3 billion withdrawals through bank statements in accounts that were left with a balance of Sh200 million.
But the agency says there are no bank statements to show how the balance of Sh5.1 billion were withdrawn from the fixed deposit account in what it has termed “a complex scheme of money laundering”.
The High Court has frozen more than Sh200 million belonging to the MP, offering a rare peek of his financial war chest and cash dealings from his three accounts in the micro lender not publicly known for mega transactions
One savings account had a balance of Sh773,228 after receiving Sh5.8 billion and a fixed deposit account was left with Sh35 million after receiving about Sh877 million.
A second fixed account received Sh5.87 billion of which Sh705.1 million had been withdrawn, but with a Sh165 million balance, leaving some unexplained Sh5.1 billion, according to the ARA’s court documents.
The agency says it is seeking further questions from Rafiki Micro Finance Bank having been unconvinced with the lender’s explanation that the Sh5.1 billion was used for trading transactions.
Documents filed in court by the ARA show that the money started pouring into Mr Gachagua’s accounts soon after the Jubilee administration rode to power in 2013.
He received funds from the Ministry of Lands (Kenya Informal Settlements Programme), State Department for Planning, Ministry of Health, Bungoma County Government, Mathira CDF, Nyeri County Government and the National Irrigation Board.
The MP is the brother of the late Nderitu Gachagua, the first Nyeri governor, who died in office on February 24, 2017.
He is also a close ally of Deputy President William Ruto.
In a petition filed yesterday, the ARA is seeking to have the Sh200 million frozen forfeited to the State, saying it is proceeds of crime.
“Preliminary investigations established that the respondents were involved in suspected complex scheme of money laundering involving several companies, which initially received funds from government ministries and State agencies and later transferred the funds to companies/business entities associated with Gachagua and ultimately transferred the funds to Gachagua’s personal accounts,” the ARA says in court documents.
Court documents show that Mr Gachagua received a total of Sh347 million from several companies including Encarta Diagnostics Sh112 million, Wamunyoro Investments Sh7.5 million, Rapid Medical Supplies Sh58 million and Specific Supplies Sh103 million.
Some of the money was later transferred to the two fixed deposit accounts while he wired Sh12.9 million to his spouse Dorcas and Sh9 million to Toyota Kenya and Taitan Motolink.
The agency investigated a total of 33 bank accounts that have dealt with the MP or companies associated with him, including Wamunyoro Investments Ltd, Crystal Kenya Ltd, Machine Centre, Technical Supplies and Services Ltd, Skytop Agencies and Specific Supplies Ltd.
The agency says Mr Gachagua and an associate identified as Anne Kimemia, who traded as Jenne Enterprises were involved in a complex money laundering scheme in collusion with his associated companies.
The documents allege that the MP is a shareholder and director in the said companies. Some of funds entering his accounts were payments made from Kwale and Bungoma counties, which paid Sh112.4 million to Encarta Diagnostics.
The funds were later transferred to several accounts, an indication that he was using the companies as a conduit for money laundering, says the ARA.
“There are reasonable grounds to believe that the said accounts received and are holding funds which are believed to be proceeds of crime and the accounts were used to execute a complex money laundering scheme in an effort designed to conceal, disguise and hide the nature, source, movement and disposition of the funds,” the petition states.
Over the seven-year period, there were massive suspicious cash withdrawals and bank transfers to the accounts under investigation.
The agency says the money movements were designed to conceal, disguise and hide the nature, source movement and depositing of the funds.
Some of the accounts that were investigated belonged to former Agriculture Cabinet Secretary Mwangi Kiunjuri.
Some of the suspicious payments made to Mr Gachagua came from National Irrigation Board, which was under the Ministry of Agriculture during Mr Kiunjuri’s tenure. The ARA is investigating whether funds from the irrigation board were wired to Mr Kiunjuri’s accounts via Mr Gachagua or his associates.
The agency says that on July 15, 2015, Jenne Enterprises received Sh30 million from Rafiki disguised as loan disbursement.
But on the same day, the firm wired Sh28.5 million to Wamunyoro Investment where Mr Gachagua is a director and shareholder.
The documents show Jenne Enterprises also transferred Sh10 million to Wamunyororo Investment on April 3, 2017.
The following day, the same firm wired another Sh5 million to Mr Gachagua’s personal account.
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