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Economy

Civil servant who built empire with stolen tax

Mr Gitau and his wife Teresia Njeri will now
Mr Gitau and his wife Teresia Njeri will now have to forfeit properties worth Sh115.8 million. FILE PHOTO | NMG 

Despite earning Sh120,000 as basic salary, an accountant at the Ministry of Interior managed to deposit an average of Sh5 million every month in his 10 bank accounts. However, when the law eventually caught up with him, he could not explain how he made the large sums of money.

Thomas Gitau Njogu, a senior assistant accountant general, also struggled before court to show proof of how he had accumulated property worth Sh115 million in less than two years without once touching his salary.

His huge deposits and the enviable property, the court heard, coincided with his promotion to the position of senior assistant accountant general at the ministry where he was in charge of a floating budget known as "buffer cash".

The Ethics and Anti-Corruption Commission (EACC), which has been investigating Mr Gitau for months, revealed a business empire that is incongruent with the government official's known income and pay declarations to the Kenya Revenue Authority (KRA) amid claims that he stole millions of shillings from taxpayers meant for emergency security operations.

Mr Gitau has a posh house in Nairobi’s Thome estate worth Sh27 million, a Sh26 million property in Kitengela, Sh17.5 million apartments in Kabete, another piece of land in Kabete and cash deposits of Sh89.1 million made in 10 accounts at Family Bank, Equity Bank and Co-operative Bank of Kenya.

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Mr Gitau and his wife Teresia Njeri will now have to forfeit all these properties worth Sh115.8 million after the EACC proved that they are the proceeds of corruption and theft.

In his judgment, Justice John Onyiego ruled that EACC had convinced him that the property should be seized by the government because the couple had failed to give a credible explanation as to how they had acquired the property.

The anti-corruption body told the court that Mr Gitau had illegally accessed office money referred to as “buffer cash” at the ministry, which he appropriated for his personal benefit. The money was deposited in various bank accounts on a daily basis through his wife and some through his lawyer — Kibatia and Company Advocates.

All the deposits were in batches of less than Sh1 million to escape the legal requirements that demand banks report to the Central Bank of Kenya all transactions above Sh1 million.

“The plaintiff’s claim of Sh108,678,542.29 translates to an income of Sh5,775,138.65 per month during the period of interest, which represents an exceedingly steep increment in the first defendant’s revenue over a relatively short period,” said the EACC. “It should not be lost on this Honourable Court that this quantum leap coincided with his appointment to the position of Senior Assistant Accountant General at the State Department for Interior and Co-ordination of National Government.”

Mr Gitau and his wife incorporated a limited liability company, Njegit Investments Limited, on February 2, 2017 and used it to purchase property worth Sh53.6 million and a motor vehicle worth Sh624,000. All this had happened within six months, when EACC commenced its investigations in August 2017.

EACC argued that the company was incorporated to launder the proceeds of economic crimes. Before commencing the case, EACC sought search warrants and raided Mr Gitau’s office and homes where millions of shillings in cash were seized. Sh1.24 million was found in his home while another Sh7.3 million was found in his office desk. The money was both in Kenya shillings and US dollars.

In their defence, Mr Gitau and his wife said some of the deposits were mostly made up of soft loans from two friends, each friend advancing them Sh20 million. However, no schedules of payment or repayment were produced in court.

However, the loan agreements were scantily drawn and appeared meant to suit their defence, EACC argued. EACC further convinced the court that the two did not offer credible justification on the sources of the amounts.

Documents filed in court showed Sh115,861,542, the difference between the cash deposits and withdrawals in the couple’s bank accounts over a period of 19 months from January 1, 2016 to August 31, 2017.

The commission argued that the money did not form part of Mr Gitau’s known and legitimate sources of income and could have been acquired through corrupt conduct.

KRA records indicated that Mr Gitau has declared the net income of Sh120,000 as his sole earnings, setting the ground for his separate prosecution for tax breaches.

And on analysing his tax ledgers from KRA, EACC told the court that he had only declared his PAYE from his employment income while his wife and his associated companies had not declared any earnings since 2014, not even the rental income they claimed they were earning.

The court heard that both were directors of Njegit Investments Ltd, Wangmug Enterprises and Njetsah Enterprises.

Mr Gitau’s earnings totalled to Sh1,893,414, within the period that he was being investigated. The commission further told the court that he did not make any withdrawals from his salary account during the investigation period. And within the said period, he had made cash deposits of Sh89,160,542, money that was deposited in different bank accounts at various branches in Kasarani, Harambee Avenue, Kariobangi, Kitengela and Zimmerman among others.

EACC moved to court after Mr Gitau failed to explain the disproportion between the couple’s legitimate source of income and the assets acquired within the investigation period.

According to the commission, if the huge deposits in their bank accounts were lawfully acquired, the two would have provided sufficient evidence in support of the source.

The couple also said some Sh55 million being questioned was earned after they sold a piece of land in Kaputiei, Kajiado County, but it emerged that they had included it among their assets in the wealth declaration forms and it was worth Sh26 million.

“The said declaration of income, assets and liabilities was made after investigations had commenced and as such, the alleged income of Sh55,000,000 is fictitious,” EACC submitted.

Out of the amounts recovered from his office and house, Mr Gitau said he had no objection surrendering $2,000 out of $3,500 to the government. He also confirmed that Sh6,983,000 seized from his office belonged to the government.

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