Investigators are looking into how former Public Service PS Lillian Omollo made cash deposits of millions of shillings in bank accounts belonging to her children in months when theft of funds were reported at the National Youth Service (NYS).
The Asset Recovery Agency (ARA) has revealed to court that millions of shillings including a cash deposit of Sh20 million on April 20 were wired to the accounts registered to Sheela Mbogo, Stephanie Mbogo and Shalom Kamwetu.
The deposits were made in a period when more than Sh1 billion was stolen from the NYS through fictitious invoices for goods such as firewood and stationery and multiple payments on one supplier invoice.
Businesspeople and dozens of senior government officials including Ms Mbogo were charged in May with various crimes related to the theft marking a new effort to crack down on widespread corruption.
“All the accounts held at Diamond Trust Bank (DTB) are in names of the sons and daughters of Lilian Muthoni Mbogo,” said ARA in court documents where it is pushing for a freeze in the bank accounts.
“That on or about 20th day of April 2018 … the accounts received Sh20 million suspected to be proceeds or crime or money laundering from the NYS.”
The revelation comes days after the Central Bank of Kenya (CBK) fined Standard Chartered Kenya #ticker:SCBK, Equity #ticker:EQTY, DTB #ticker:DTK, Co-operative Bank #ticker:COOP and KCB Group #ticker:KCB Sh392.5 million for failing to report suspicious transactions in connection with the theft of funds at the NYS.
The banks had received a total of more than Sh3 billion from the NYS on behalf of their customers, the CBK said.
The law requires all financial institutions including banks, insurance companies and saccos to file with the Financial Reporting Centre daily reports on transactions above Sh1 million and those deemed suspect.
Ms Mbogo is said to have deposited cash in her accounts in batches of Sh900,000 to escape the reporting threshold.
Earlier, court documents showed that more than 115 accounts in 14 banks and Unaitas, a sacco, have been frozen over the NYS scam.
These include several bank accounts belonging to Ms Omollo including some to a company, Sahara Consultants, which is linked to her.
“On analysing the accounts, it is clear that the monies were deposited in cash, raising suspicion of possible money laundering and proceeds of crime,” ARA told the court last week.