The fate of those accused of stealing Sh791 million in the 2015 National Youth Service scandal, notoriously referred to as NYS-1, took a turn for the worse after the High Court ordered the seizure of two properties and four high-end vehicles.
The assets were associated with the tenderpreneur associates of Ms Josephine Kabura – the woman at the centre of an ongoing criminal case.
The court, for the second time in the emerging jurisprudence on illegally acquired wealth, said a criminal conviction is not a necessary pre-condition for civil forfeiture and marked the properties as “proceeds of crime”.
Interestingly, the eight suspects in the NYS-1 scam elected not to defend the case brought by the Assets Recovery Agency before High Court judge Mumbi Ngugi. Among the suspects are Anthony Gethi, his mother Charity Gethi and sister Jedidah Wangari Wangui.
Others involved in the NYS-1 case include Sam Mwadime, Vandame John, John Ndungu, Paul Gachoka and James Kisingo. In what reads like a movie script, the court was told that some of the eight participated in a scheme to defraud the NYS and later purchased properties and high-end vehicles.
It all started when Sh695 million was committed in the NYS Integrated Financial Management Information System (Ifmis) platform as due for payment into the accounts of six business entities. These were Kabura’s Form Home Builders, Roof and All Trading, Reinforced Concrete and three entities belonging to Peter Otuoma and Caroline Kinuthia – Tegmen Technologies, Grumium Engineering and Draco Capital.
The owners indicated they were involved in the upgrading of roads in Kibera and Mukuru slums.
Investigators found that Sh791 million had been paid to Kabura’s three companies between December 2014 and March 2015 and that the bank accounts for the three companies had been opened in November 2014.
It was upon receiving the money that Kabura transferred Sh273 million into the personal account of John Ndungu and another Sh108 million into a business entity, Good Luck Twenty Eleven Enterprises, registered by Ndungu.
The court was told that the intention was to cover the trail of stolen money and the transfers were effected by Kabura in collusion with John Kago, Ben Gethi and staff at Family Bank. While these were internal cash transfers, they were issued with cash deposit slips, which did not indicate the name of the person who deposited.
The court was also told that the group had no valid supply contracts and that figures in the payment vouchers, delivery notes and counter receipts did not tally. A document examiner from the DCI dismissed them as “forgeries”.
SH800 MILLION
It was following that discovery that the eight were accused of theft and fraudulently transacting some Sh800 million allocated to the National Youth Service for the year 2014/15 in a matter brought to the attention of the Directorate of Criminal Investigations by then Cabinet Secretary for Devolution, Ms Anne Waiguru.
Ms Waiguru would later be forced to step down under pressure from politicians who wanted her to take responsibility and after she was adversely mentioned by Kabura, who was also in court over the heist. She denied being an acquaintance.
The seizure of the assets is separate from the other NYS cases. One of the targeted properties is a maisonette in Kasarani acquired after Kabura sent Sh40 million to Sam Mwadime, also known as Samuel Wachenje, a finance director and alternate AIE holder at NYS. The court was told that Mr Mwadime used a forged ID card to open a bank account and purchased the Kasarani property in July 2015.
He later registered the property in the name of his wife, Susan Mkiwa. Mwadime used the balance to purchase another property in Ruiru using the same fake documents.
On Thursday, High Court judge Mumbi Ngugi ordered the seizure of the two properties plus the vehicles.
She said that, although the right to property was guaranteed, such protection does not extend to property acquired illegally.
PUBLIC OFFICIALS
“The theft was perpetrated by public officials within the department and private persons. The assets in issue were purchased using funds stolen from the NYS,” said the Judge.
“It is also noteworthy that the entities into whose accounts the funds were paid were registered under the Registration of Business Names Act in November 2014, the same month the accounts into which the funds went were opened,” observed the judge.
During the hearing of the case, none of the respondents explained the source of the funds used for the purchase of the assets or countered the evidence adduced by the DCI.
“In the absence of a response, this court finds that the assets at issue are proceeds of crime,” said Justice Ngugi.
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