Banks targeted in Sh9 billion NYS scam probe
What you need to know:
Several banks are claimed to have abetted the movement of the money in cash once payments were received from the NYS.
The DPP said several bank accounts through which the funds were channelled have been frozen.
Mr Haji said withdrawals beyond the required legal threshold were made.
Detectives are casting a wider net to catch perpetrators in the Sh9 billion scandal that has rocked the National Youth Service (NYS) with banks that were involved in the suspicious transactions now under investigation.
Director of Public Prosecutions (DPP) Noordin Haji said the first phase of the investigations had been completed, leading to the Monday arrests and charging on Tuesday of 54 suspects over the payment of Sh467 million to 10 companies without following procurement procedures.
“Upon perusal of the file and in consideration of the evidence, I found sufficient evidence upon which to base a criminal prosecution against the suspects,” Mr Haji said.
The chief prosecutor’s pledge came as Central Bank Governor Patrick Njoroge said the chief executives of banks found to have flouted banking regulations by allowing huge amounts of money to be moved in cash, will be held to account.
BANKING LAWS
He said it would be very difficult for the bankers to extricate themselves from culpability since they had committed themselves to comply with banking laws that aim at eliminating economic crimes and money laundering.
Several banks including three locally owned ones, another owned by the government and an international one are claimed to have abetted the movement of the money in cash once payments were received from the NYS.
Speaking on Tuesday, Mr Haji said the charges include abuse of office, conspiracy to commit an offence of corruption, wilful failure to comply with procedures and guidelines on public finance management.
The others are breach of trust by a public officer, wilful neglect to perform official duty and fraudulently making payments from public revenues for goods not supplied. The 54 individuals include public servants, the companies and their directors.
ACCOUNTS FROZEN
The amount involves pending bills dating back to 2013 that were paid during the tenure of Public Service Principal Secretary Lilian Omollo, who was appointed in November 2015.
The DPP said several bank accounts through which the funds were channelled have been frozen. “The banks are required to report suspicious transactions made by an individual or any entity. In this case my office is in the process of finding out if indeed these banks flagged such withdrawals,” the DPP said but did not provide the names of the banks.
According to the Central Bank of Kenya regulations, no individual or business entity is required to make a withdrawal of more than Sh1 million a day without signing the mandatory statutory forms.
However, Mr Haji said withdrawals beyond the required legal threshold were made.
The DPP said four special prosecutors and forensic experts will be hired to help his staff. He also urged all suspects in hiding to surrender.
