NAIROBI, KENYA: As Kenyans prepare to usher in New Year, 2018 will go into history as the period government stepped up war on corruption and moved closer to bringing to book big names linked to the vice.
The country lost over Sh13 billion to corrupt deals in key state departments such as the National Youth Service, Kenya Pipeline Company, National Cereals and Produce Board, NHIF and shoddy land transactions at the Ministry of Lands.
The National Cereals and Produce Board is reported to have lost Sh1.9 billion, Kenya Pipeline Company Sh2 billion, and the Kenya Power and Lighting Corporation lost Sh470 million.
During the year, the National Youth Service (NYS) was hit by a Sh10.5 billion scandal in a scheme which involved at least 48 individuals drawn from senior management at NYS and National Treasury, as well as suppliers.
The suspects face charges that include forgery, money laundering, abuse of office, obtaining by false presence and fraud.
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Public Service and Youth secretary Ms Lillian Mbogo linked to the scam faced it all from being arrested to her accounts being frozen.
The Assets Recovery Agency officially froze accounts of former Public Service and Youth Affairs Principal Secretary Lilian Mbogo Omollo and her kin after getting a green light from the courts.
The agency froze a total of $105,293.7 (Sh10.5 million) and Sh22.4 million held in 11 bank accounts in the name of Lilian Wanja Muthoni Mbogo, Sahara Consultants, Lidi Holdings Limited and Lidi Estates Limited.
Several bank accounts prosecution said were used as conduits for looting more than Sh1 billion from the National Youth Service were also frozen.
Justice Jessie Lessit issued the orders following an application by the Assets Recovery Agency claiming that beneficiaries of the stolen public funds were colluding with banks to withdraw all the money and destroy evidence linking them to the scandal.
Among the accounts frozen were those held by Firstling Supplies Limited at Standard Chartered Bank, four accounts at Diamond Trust Bank operated by Sahara Consultant, Sheela Mbogo, Stephanie Mbogo, Shalom Kamweti and another account at Consolidated Bank operated by Ersatz Enterprises.
Justice Lessit also ordered the freezing of 10 accounts at Equity Bank belonging to Lilian Wanja Muthoni trading as Sahara Consultants, James Thuita Mwangi, Lidi Holdings Limited, Lidi Estates Limited, Ameri Traders, Interscope Tech and Services, Flagstone Company Limited and Ellywn Supplies.
For failing to do due diligence and allow questionable transactions through their systems, the Central Bank of Kenya cracked whip on several commercial banks that aided the NYS scam.
Kenya Commercial Bank had to pay Sh149.5 million, Equity Bank parted with Sh89.5 million, Standard Chartered Bank fined Sh77.5 million, Diamond Trust Bank paid Sh56 million and Co-Operative Bank of Kenya Sh20 million.
In a statement the Central Bank of Kenya said that the first phase of investigation of banks that were used in transacting fraudulent NYS funds is complete. “The main objective of the investigation is to examine the operations of the NYS-related bank accounts and transactions, and in each instance assess the banks’ compliance with the requirements of Kenya Anti-Money Laundering laws and regulations,” read part of the statement.
The banks were found culpable for failing to report large cash transactions, failure to undertake adequate customer due diligence, lack of supporting documentation for large transactions and lapses in the reporting of suspicious transaction reports to the financial reporting centre.
