Taxpayers may have lost Sh11bn in NYS scams

Kenyan taxpayers may have lost more than Sh11 billion in the two mega scandals at the National Youth Service (NYS) that have seen more than 30 public officials charged in court.

Assistant Director of Public Prosecutions Gitonga Riungu told the court that the suspects employed similar tricks to defraud the public of valuable resources in both the scandals popularly known as NYS I and NYS II.

Mr Riungu said that despite the recent reoganisation of the NYS, the officers who were charged with the responsibility of detecting and deterring a repeat of the theft ended up breaching the trust bestowed upon them.

The prosecution said that more than Sh3.2 billion was lost in the NYS I scandal while a larger sum of Sh8 billion may have been lost in NYS II. Mr Riungu said the complexity of the cases had forced the DPP to spread out investigations and prosecution, both of which require time and resources.

Some of the 26 suspects in NYS I, including former PS Peter Mangiti, former NYS Director General Nelson Githinji as well as businessman Ben Gethi and Josephine Kabura have denied stealing more than Sh791 million.

In the second scandal, the suspects are 51 and the amount involved has been stated as Sh468 million.

Mr Riungu told chief magistrate Douglas Ogoti that the prosecution believes offering a clear background to the scandal would facilitate expeditious hearing and that he plans to use experts to explain how the funds were stolen from the organisation.

Yesterday, some 37 suspects, including former PS Lilian Omollo, pleaded afresh to some 82 charges associated with the loss of Sh232 million at the NYS.

The prosecution also withdrew charges against eight accused persons despite protestations from their lawyers, who wanted them acquitted under Section 210 of the Civil Procedure Code. Withdrawal of the charges means the suspects can still be arrested and charged afresh with similar offences.

The eight, who include a former acting director-general at NYS Sammy Muchuki, Rodgers Nzioka, a former head of mechanic transport branch (MTB), and Lucas Otieno, a former internal auditor at the Treasury, are now in court as state witnesses.

Other suspects, whose charges were withdrawn are Josephat Njoroge, a former internal auditor at the Treasury, Mr Simon Kanyi, a former head of procurement at MTB, Stephen Riungu Macharia, Christopher Malala (a former accountant at NYS) and Ms Clara Mbao.

Through their lawyers Asa Nyakundi, Kelvin Mogeni and Kibiru Njenga, the eight said they have not recorded statements as witnesses and the prosecution had discovered that it had nothing incriminating them.

Mr Riungu, however, said some of them had co-operated and agreed to act as witnesses.

“The case is against obscure but ruthless fly-by night briefcase companies or business entities that swooped away a massive Sh231,942,758 being just a tip of the Sh8 billion that was siphoned out of the National Youth Service coffers in payment for goods not delivered and with the assistance of the accused persons, who were public officers in the State Department of Public Service and Youth.”

The 37 pleaded to charges of conspiracy to commit an offence of Economic Crime, abuse of office; wilful failure to comply with applicable procedures and guidelines relating to management of public funds, neglect of official duties and fraudulently making payments.

Other charges are breach of trust, making documents without authority, uttering false documents, false accounting, fraudulent acquisition of public property, dealing with suspect property and money laundering.

Mr Riungu said the prosecution would endeavour to prove the ingredients of each and every charge against the accused persons through primary evidence, expert witnesses, graphs and electronic evidence.

“Through graphics and charts, we shall demonstrate how public funds from the Exchequer allocated to the Ministry of Public Service, Youth and Gender, were siphoned out to fictitious companies through NYS in the guise of procurement,” he said, adding that there is evidence that circulars used were forged, genuine contractors numbers were forged and illegally used to pay non-existent supplies.

The prosecution further clams that colossal amounts were paid as pending bills for what did not fit the description of a pending bill after they were slotted into the NYS stock of pending bills.

The list of companies in involved in the questionable procurements includes Ngiwaco, Njewanga, Jerrycathy Enterprises and Annwaw Investments, a company associated with the Ngiritas.

The prosecution said the said companies were not on the list of prequalified NYS suppliers housed at Department of Public Works Supplies Branch.

“Your honour, we shall demonstrate that the perpetrators extent of fraud was incomprehensible, inconceivable and unethical to a point where documents were backdated and doctored to look like they were genuine and then sneaked in for payments for the “supply of air” without any color of right or shame. They were fictitious,” he said.

The trial was adjourned until tomorrow to allow the prosecution to serve the defence lawyers with five witness statements.