Businessman caught in prisons fraud scandal fights to get his land back

A businessman who sold vehicles and a beauty shop to a prisons employee, whose assets have been preserved over allegations of receiving Sh257 million fictitious payments from the government, wants the court to unfreeze his land parcel.

Stephen Jeremiah Ogeto says although the purchase of the land was paid for by the fraud suspect using the alleged proceeds of corruption, he is the legitimate owner.

He has also denied allegations of the anti-corruption watchdog that he works at the prisons department and that he was used as a conduit to conceal the property acquired by the cleaner, Eric Kipkurui Mutai, using proceeds of fraud.

He wants the court to allow him to participate in the forfeiture suit filed by the anti-corruption commission against Mr Mutai. He intends to argue for the removal of his land from the list of frozen assets of Mr Mutai.

Mr Ogeto has in addition denied claims by the Ethics and Anti-Corruption Commission (EACC) that he also works at the State Department of Corrections and that Mr Mutai is his colleague.

The High Court had in April issued orders to the EACC allowing it to preserve three properties and seven motor vehicles owned by Mr Mutai, a cleaning supervisor at the State Department of Correctional and Rehabilitation Service.

In the forfeiture suit, EACC alleged that some of the corruption proceeds received by Mr Mutai were used to buy a parcel of land in Nyaribari Chache which was registered in the name of Mr Ogeto.

Court papers filed by EACC indicate that the land was purchased for Sh35 million from Matthew Kiriago Akama.

EACC also alleged that after the purchase Mr Ogeto issued instructions to the seller to transfer the property to a third party, in a bid to further conceal the property purchased through proceeds of corruption.

But Mr Ogeto, in his request to join the suit, says he is not and has never been an official working at the State Department of Corrections.

He adds that EACC made false statements against him and failed to disclose to the court that he was the actual owner of the land. He says he purchased the land in July 2017 from Dr Matthew Kiriago Akama at a price of Sh45 million, although the same was paid by Mr Mutai.

Through lawyer Oscar Otieno, he explains that he sold Mr Mutai three motor vehicles and a Saloon known as Hygienic & Barber Shop situated at Jubilee Insurance Building in Nairobi.

He sold the vehicles, one Toyota Station Wagon and two Volkswagen, at a price of Sh28 million in total and the saloon at Sh15 million.

“By the reason of the fact that Mr Mutai was to effect payment to me on the agreements (of sale of vehicles and saloon) and whereas I was to effect payment to Dr Mathews Kiriago Akama, I agreed with Mr Mutai that instead of effecting payments to me he would effect the payments directly to Dr Akama to secure my purchase of the land property,” says Mr Ogeto.

He states that there was nothing unlawful in respect of his acquisition of the land.

“Despite the EACC being aware that Mr Ogeto is the registered owner and proprietor of the property Land Reference Number Nyaribari Chache/B/B/Boburia/9927, it intentionally failed to include Mr Ogeto in these proceedings with the ultimate aim of securing ex-parte orders of prohibition in bad faith,” said his lawyer.

He wants the court to set aside the prohibition order granted against the land on grounds that the same was issued “through deliberate false and misleading averments”.

“As the owner of the property, Mr Ogeto enjoys the Constitutional right to property guaranteed by Article 40 of the Constitution and that right is not to be lightly clogged, especially through deliberate false and misleading statements,” said Mr Otieno.

EACC filed the suit alleging that Mr Mutai illegally benefitted from tenders worth Sh257 million and fictitious payments between 2012 and 2016.

It said Mr Mutai purchased the three parcels of land in Nyaribari Chache, Kericho and Nairobi for a total of Sh57 Million and seven vehicles all valued at Sh30.6 Million.

It added that he is one of the suspects under investigation for irregular payments of Sh450 million by the State Department to 18 companies.

He is suspected to have fraudulently obtained Sh257 million through seven companies in which he is the registered sole proprietor.

The money was allegedly embezzled through fictitious contracts for the supply of food and ration which were never delivered. He is suspected to have executed the scheme in collusion with colleagues in the State Department.

Court papers indicate that the payment was for supply of food and ration to seven prisons within Nairobi. The companies were paid but did not supply said food and ration.

The prisons include Kamiti Main Prison, Nairobi Remand, Nairobi West Prison, Langata Women, Kamiti Medium, Kamiti Yctc and Nairobi Medium.

For instance, Unique Supplies received Sh73 million, Homex Logistics (Sh62 million), Hygienic Ventures (Sh51 million), Nerimas General Agencies (Sh22 million), White Unicorn Logistics (Sh10 million), Trechris Services (Sh13. 6 million) and Fation Logistics Sh13 million.

“He disguised himself with support of other colleagues as a ghost supplier by using false documents to plan, execute and confer to himself a benefit in contravention to Constitution, Public Officers Ethics Act and Anti-Corruption and Economic Crimes Act while being a public officer,” according to the Commission.

He has been an employee of the State Department of Correctional Services since 2009. In 2017 he was employed as senior support staff based at the procurement section Teleposta Towers.

The case will be heard on September 20, 2022 by High Court judge Esther Maina in Nairobi.