State secures wins in recovery of NYS money

One of the biggest suppliers to the National Youth Service received a total of Sh1.1 billion from the scandal-ridden agency within eight months in 2017, as most Kenyans were fixated on the General Election.

A judgment released by the High Court showed that Mr James Thuita Nderitu received the money through several companies where he is the director, associates as well as family members.

And now, Justice Mumbi Ngugi has ordered that Sh35 million, which was being held in some 10 accounts, be forfeited to the government after he failed to explain the source of the funds.

The ruling has emboldened the Assets Recovery Agency (ARA), which is now targeting four of his properties, including residential property in Thome, Garden Estate and Runda in Nairobi.

In the judgment, Judge Ngugi noted that Mr Nderitu, through three of his companies, received approximately Sh1,100,375,521 between March and October 2017.

The judge said the businessman failed to explain the large deposits from NYS, and in the absence of a reasonable explanation, the funds could be assumed to be proceeds of crime.

“In the absence of an explanation regarding the legitimate basis for the transfer of funds, the conclusion is that the funds are proceeds of crime and liable to forfeiture,” the judge said.

BIG WINS

Justice Ngugi added that Mr Nderitu, Flagstone Merchants and Firstling Supplies, among others, failed to provide even an iota of evidence to show how the suspect funds from NYS were received in their accounts and for what particular purpose.

She said the companies were beneficiaries of proceeds of crime and the funds were proceeds of crime as they were obtained directly as a result of money laundering and other predicate offences.

This is the second win for ARA in less than two weeks after the same judge ruled that some Sh33 million belonging to former principal secretary Lillian Omollo be forfeited to the government.

Justice Ngugi found that the money held in the bank accounts of Ms Omollo, her children, Sahara Consultants, LIDI Holdings Ltd and LIDI Estates Ltd are proceeds of crime.

The former Youth and Gender PS has, however, filed a notice seeking to overturn the decision.

She argues that the funds were her salary and gratuity, which she got before joining the government.

ARA is also targeting three motor vehicles and parcels of land belonging to the Ngirita family, who are facing charges of fraudulently receiving millions of shillings from NYS.

The motor vehicles and properties belong to Phylis Ngirita, Lucy Ngirita and Jeremiah Ngirita, and the agency obtained orders freezing them on suspicion that they bare proceeds of crime and are liable for forfeiture to the government.

COMPLICIT STAFF

The agency is also targeting houses in posh estates such as Runda in Nairobi, Nakuru and Kitale belonging to Mr Evans Wafula Kundu, a former official at NYS.

Mr Kundu was in charge of the Mechanical and Transport Branch (MTB) at the NYS headquarters in Ruaraka and had the authority to incur expenditure.

According to the agency, Mr Kundu performed several roles in the fraudulent NYS transactions, where he signed most of the fraudulent Local Purchase Orders (LPOs), a number of fraudulent payment vouchers and procured goods not used or required by the MTB.

He is alleged to have received Sh197,391,968 between 2013 and 2017 through his two bank accounts, at Barclays Bank branches in Nakuru and Ruaraka.

The properties being targeted were purchased through companies linked to Mr Nderitu and Ms Ngirita.

In the judgment on Wednesday, Justice Ngugi noted that the trader fraudulently received funds from NYS through business entities and personal accounts and associates and split them into several transactions in a bid to conceal the proceeds.

“In my view, the applicant has placed material before the court that indicate that the funds were transferred to the respondents in circumstances that show, on a balance of probabilities, that these funds are proceeds of crime,” the Judge added.

WEAK DEFENCE

The court heard that the funds were intra-transferred into accounts owned by family members and associates, hence suspicion that they were proceeds of crime, which should be forfeited to the government.

And although Mr Nderitu alleged that he was a businessman engaged by NYS and other government institutions, ARA said there was no evidence to support his claims. He is the director of five of the firms.

He defended himself, saying the case was based on suspicion, and although he is currently facing fraud charges, he was yet to be convicted.

According to the trader, the movements of funds from one account to another in the ordinary course of business cannot be said to be money laundering.

He added that he was importing goods from far and wide and receiving funds from different sources.

The accounts are held in several banks and registered in his name and those of his companies, including Flagstone Merchants, Firstling Supplies Ltd, Excella Supplies Ltd, Flagstone Co. Ltd and Interscope Tech & Services.