Family Bank has been cleared in the Sh1.6 billion National Youth Service (NYS) money laundering case after settling a deal with the Director of Public Prosecutions (DPP) Noordin Haji.
Nairobi Chief Magistrate Francis Andayi cleared the bank from charges filed against it and its former employees after settling the matter as per an agreement reached between it and the DPP. The charges against the former employees still stand.
“I urge this court to expunge now the name of the bank from the charge sheet presented to this court by the DPP.” Mr Andayi was urged by Lawyers Waweru Gatonye and Cecil Miller for the bank.
Mr Gatonye and Mr Miller told the magistrate that the bank has complied with all the conditions agreed upon with the DPP.
Terms of removal
Deputy DPP Ms Dorcus Oduor confirmed to Mr Andayi that the bank has complied with the terms for its removal from the case and thus should thus be cleared from blame.
“I am not opposed the matter against the bank being marked as settled,” Ms Oduor told the court.
She although the bank had been charged, it is her agents (employees), who are responsible for the alleged violations, who shall be called upon to answer for their actions when trial commences on April 16, 2019.
Another defence lawyer, Ms Pauline Kiteng’e, urged the court to free the former employees since their employer has been vindicated following the out-of-court settlement of the case.
But Ms Oduor responded saying, “ A bank is an entity which carries out its operations through its appointed agents who are required to observe the banking rules.”
She said the agents of the bank who were charged alongside the financial institution will have to answer for their actions.
Ms Oduor challenged Ms Kiteng’e and other defence lawyers to make a formal application on the issue which she said the DPP will respond accordingly.
The bank pleaded guilty to the six counts, then paid a fine from which Sh24,500,000 will go to NYS while the balance of Sh40 million will be paid to the Ministry of Culture, Sports and Arts.
Mr Andayi, who entered the judgement as prayed by the bank, directed that in the event it fails to pay, the government will attach its property to sell it by way of public aution.
The bank had agreed to plead guilty "freely and voluntarily.”
The bank, through the Head of Security John Muchiri King’ori, pleaded guilty to six counts of failure to report transactions made by NYS suspects who include Josephine Kabura on December 20, 2018.
The bank had been accused that on December 22, 2014 and May 19, 2015, being a reporting institution, it failed to comply with its reporting obligations by failing to report unusual transactions.
The bank's former employees -- CEO Peter Munyiri, KTDA Branch Manager Robert Oscar Nyaga, Anti-Money Laundering Compliance Manager Charles Kamau Thiongo, Head of Risk and Compliance Raphael Mutinda Ndunda, Operations Supervisor Nancy Njambi, Relationship Platinum Manager Meldon Awino Onyango and Customer Service Supervisor Josephine Wairi -- still face charges of failure to report significant transactions carried out by Ms Kabura, who is the chief suspect in the Sh791 million theft case in the NYS 1 case, using three accounts held at the bank.