alexa Are city nightclubs havens for cleaning dirty cash? - Daily Nation

Are city nightclubs havens for cleaning dirty cash?

Saturday January 25 2020

B-club

B-club entrance in this photo taken on January 11, 2018 after it was shut by Nema over noise pollution. PHOTO | FILE | NATION MEDIA GROUP 

VINCENT ACHUKA
By VINCENT ACHUKA
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Before an avalanche of misfortunes befell them, B Club and Kiza Lounge, two upscale nightclubs in Nairobi’s Kilimani area, ruled the city’s nightlife.

FIVE LOUNGES

A night was simply not complete, especially on Fridays and Saturdays, if one had not been to Galana Plaza, where the two clubs are located. Traffic jams at 2.30am on Galana road became commonplace as revellers hassled to find parking.

If you were lucky to get past the security – who would check minor details such as your dress code – the interiors of B Club and Kiza were a sight to behold.

At Kiza, you had the option of partying at any of its five lounges where drinks were sold at different prices. It had a ballroom, a VIP section, a main lounge, a terrace and a cigar lounge.

At B Club, a parking lot full of high-end cars gave an aura of opulence. Then you would meet a futuristic Sh50 million tron motorcyle at the entrance, a spot for which revellers would fight for selfie moments.

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Then came a complaint of noise pollution by the residents of Kilimani, who demanded that the two clubs be shut down. The National Environment Management Authority (Nema) ordered their closure but they were reopened shortly after, leading to a court battle that would eventually cause the two clubs to be shut down.

STOP ORDER

“The clubs’ continued operation of the business within the petitioner’s area of residence is a violation of their rights to life and right to a clean and healthy environment as contemplated in the Constitution,” noted Justice Loice Komingo in her ruling on October 29, 2019.

But a shocker had come about a month to the ruling, when a special unit tracked down Nigerien Ali Omarou to Nyahururu, where he had gone into hiding, brought him to Nairobi and drove him straight to the Jomo Kenyatta International Airport, where they then put him on a plane to Niamey, Niger’s capital city and stamped his passport persona non grata.

A stop order was then circulated by the Serious Crimes Unit of the Directorate of Criminal Investigations to all international entry points with an order to arrest Mr Omarou if he attempted to return to Kenya.

Before his deportation, Ali Kiza, as he is known, had tried in vain to get his work permit renewed. Sensing that he was about to be arrested and deported, Mr Omarou, who had become a common face in Nairobi’s social circles, suddenly disappeared.

CRIMINAL GANG

Meanwhile, he instructed his lawyers to sue the government for declining to renew his work permit. But before the suit reached the courts, a deportation order was signed by Interior Cabinet Secretary Fred Matiang’i on August 14 and detectives went after him.

“His work permit had expired and we realised that he was part of an international criminal gang,” said Wangui Muchiri, the Interior ministry spokesperson.

Mr Omarou’s deportation, the subsequent closure of Kiza Lounge afterwards and now B Club shifted the spotlight to the owners of the city’s nightclubs.

From digging the past of Barry Ndengeyingoma alias Ndegeye, the Rwandan owner of B Club, the Saturday Nation found allegations of money laundering.

Mr Omarou came to Kenya in 2014 – a year before Ndegeye – from Dubai, where, according to previous interviews, he used to run a restaurant.

Apart from running Kiza, the Nigerien said he was also the chairman and managing director of Linkers International, a company that dealt in hospital supplies in Africa.

HOT SPOTS

But to the Kenyan government, he was a criminal. Since March last year, the government has been clamping down on businesses it suspected were fronts for criminal networks, drugs traffickers, racketeers and money launderers. A number of night clubs have shut down in the past year, due to the stricter regulations, and a struggling economy.

The entertainment industry, which has for a long time been seen to be growing due to Kenyans’ love for partying especially in the capital city, is thought to be playing a huge part in hiding illegal money and for trafficking of drugs.

Night clubs, luxury car sale yards and casinos have emerged as other hot spots for money laundering, according to people aware of the contents of Kenya’s Draft National Risk Assessment set to be completed by the end of the month by an anti-money laundering task force set up in March last year.

The team comprises 30 institutions and departments, including the Capital Markets Authority, Kenya Bankers Association, DCI, Kenya Revenue Authority, Kenya Wildlife Service, the Immigration Department, Anti-Narcotics Uni, Anti-Terrorism Police Unit, Asset Recovery Agency and the NGO Co-ordination Board.

SH4M A NIGHT

The report of this team, whose mandate was to establish the extent of money laundering, is expected to craft Kenya’s first ever national strategy on combating money laundering and terrorism financing by March 31. This will set the stage for a crackdown on suspects.

“Kenya has never done a risk assessment (on money laundering). Once we do a risk assessment we are able then to put more resources in the areas where the highest risk would be identified,” said Assets Recovery Agency director Muthoni Kimani during the launch of the task force. “We know (the risk areas), but we have to document them.”

Nightclubs, by their very nature, have huge cash inflows and un-invoiced expenditures. A supervisor of a popular nightclub that is still operating says they can make up to Sh4 million on a good night.

“The first two weeks of the month are for generating money for all expenses and the other two are profit for the owners,” said the supervisor.

Some are suspected of cleaning proceeds from illegal activities like drugs and corruption.

CASH CRISIS

A number of government officials, including ministers, are said to own stakes in some popular nightclubs, one of them on Lang’ata road. The fact that the Alcoblow check points are never mounted on the stretch of road leading to the club is attributed to its influential owners.

Under the Proceeds of Crime and Anti-Money Laundering Act and banking regulations, Kenyan financial institutions and entities are mandated to report to the Financial Reporting Centre if they notice suspicious transactions.

“While banks are subject to Know Your Customer and Suspicious Transaction Reports, alcohol by its nature is sold mostly on a cash basis just like everything else in entertainment,” says Charles Mwalimu, a criminal lawyer.

“It is also impossible to track the movement of stock or what has been paid in terms of bills by an entity unless the owners want to, which makes it easy for criminals to be involved in the nightclub business,” he says.

FAKE GOLD

Three months ago, detectives from the DCI raided Plan 254 Club in Kilimani, Nairobi, and confiscated fake US dollars amounting to Sh1 million plus 147 fake gold bars hidden in a safe. They arrested a number of suspects, including flamboyant personality Stephen Mark Oduk.

Mr Oduk, who also goes by the alias Lucas Mbadi, has a number of cases in court related to dealing in fake gold and money laundering.

Don Bosco Gichana, another flamboyant personality who was in 2018 released from a Tanzanian jail after being fined Sh13.7 million after pleading guilty to conspiracy and money laundering had, among properties associated to him in his heyday, Capri 7 Lounge in Hurlingham.

Likewise, Nigerian drug lord Anthony Chinedu, who was deported from Kenya, had, for over 15 years, operated the Deep West nightclub and at Nairobi West.

WHITE POWDER

His estranged Kenyan wife Joyce Akinyi was in August last year arrested at the same club with four kilos of white powder believed to be cocaine.