Ten suspects in Sh791m NYS scandal charged afresh
Josephine Kabura at the Milimani Law Court in Nairobi on December 3, 2019 during the hearing of the case where she was facing charges alongside businessman Benson Gethi Muchemi, former National Youth Service Director Dr Nelson Githinji and others over the National Youth Service financial scam.
What you need to know:
- Of the Sh791,385,000 that went missing in what has been dubbed the NYS Season II heist, police investigators discovered that Sh444,360,000 was used by the suspects to buy high-end vehicles, properties in upmarket areas and part of it stashed in bank accounts.
Director of Public Prosecutions (DPP) Renson Ingonga has re-arraigned 10 suspects, including a lawyer and a convict in the Sh791 million National Youth Service (NYS) scandal that almost crippled the government agency.
Of the Sh791,385,000 that went missing in what has been dubbed the NYS Season II heist, police investigators discovered that Sh444,360,000 was used by the suspects to buy high-end vehicles, properties in upmarket areas and part of it stashed in bank accounts.
A further Sh180,875,000 was used to buy land and palatial houses in upmarket areas in Nairobi and Kiambu counties.
Investigators have established that Sh219,320,000 was transferred from one bank to another, with the millions ending up in the suspects' accounts.
While reviewing the evidence of the 2014/2015 NYS scam web, Mr Ingonga dropped the case against Anthony Gethi Kihara, leaving behind a mother Charity Wangui Gethi, her son Benson Gethi Wangui and daughter Jedidah Wangari Wangui.
Others charged in the NYS scandal are businessperson Josephine Kabura Irungu, John Kago Ndung'u, Samuel Mudanyu Wachenje alias Sam Mwandime (who is serving a five-and-a-half-year sentence for the Sh791 million season one fraud), lawyer Patrick Ogolla Onyango, Paul Kinuthia Gachoka, John Hope Vandamme and Martin Gachuri Wanjohi.
All the 10 suspects denied the charges read to them after Anthony Gethi Kihara was dropped from the case before Milimani Chief Magistrate Susan Shitubi.
The alleged offences were committed on various dates between December 22, 2014 and August 7, 2015.
In the first category of alleged money laundering, Kabura, Kago, Ogola (lawyer) and Benson Gethi are accused of entering into an agreement to purchase a luxury vehicle, a Range Rover KCB 750Z at a cost of Sh23,480,0NYS heist reminds us revolution the solution to grand corruption00.
It is alleged that all four knew or should have known that the said money was part of the proceeds of crime, namely the theft of Sh791,385,000 from the National Youth Service.
Ms Shitubi heard that the luxury vehicle was bought to conceal the source of the money.
Kabura, Kago and Charity Wangui Gethi and her son Benson Gethi Wangui are accused of buying a Jeep Cherokee (KCD 241Q) worth Sh6,390,000 as part of the Sh791,385,000 allegedly stolen from the NYS.
Kabura and Wachenje are jointly accused of buying a Toyota Land Cruiser worth Sh5.2 million between December 22, 2014 and September 15, 2015.
Kabura, Kago, Kinuthia and Vandamme allegedly bought two Toyota Land Cruisers worth Sh10,095,000.
Kabura, Kago, Charity, Ogola, Wachenje also bought property in Roselyn Estate for Sh60 million, City Clay House (Sh21 million), Juja Farm Plot (Sh3,875,000), Muthaiga House (Sh45 million), Thika Plot (Sh35 million) and Eden Restaurant in Nairobi City (Sh16 million).
In terms of bank deposits and transfers, Kabura and Wachenje deposited Sh40 million into a bank account held by Wachenje.
Kabura, Kago and Charity transferred Sh4,720,000 to the account of Brownfield Developers Limited at Diamond Trust Bank Limited.
Kabura, Kago, Charity, Ogolla and Wanjohi transferred Sh77,600,000 to an account held by Charity Wangui Gethi (mother of Benson Gethi).
Charity is also alleged to have received a further Sh7 million from Kabura, Kago and Ogolla between December 1, 2014 and April 30, 2015.
In the latest batch of transfers, Kabura, Kago and Ogolla transferred Sh90 million to the K-Rep bank account of Patrick Ogolla Onyango Trading As (T/A) Ogolla and Company Advocates knowing that the said money was part of the proceeds of crime and part of the Sh791,385,000 stolen from NYS.
The said Sh90 million was transferred between December 1, 2014 and May 30, 2015.
Testifying against the 10, a city lawyer David Ireri of Wainaina Ireri Advocates told Ms Shitubi that his law firm bought the Sh35 million Thika plot.
Mr Ireri said the money was transferred by one John Kago Ndung'u from Family Bank Limited on May 8, 2015.
The land was bought by Charity Wangui Gethi.
He said the vendor's lawyer was Michael Daud Patel.
The lawyer said the account of his law firm's client was frozen by the Central Bank of Kenya's (CBK) Banking Fraud Investigation Department (BFID) when it discovered the Sh35 million transaction.
Mr Ireri said BFID later unfroze the account when it discovered the truth that he was not involved in the NYS scam but was genuinely acting for his client (Charity Wangui Gethi).
Two weeks ago, two former senior NYS officials, Wachenje and Hendrick Nyongesa, were sentenced to a total of 12 years in prison for their role in processing fraudulent payments that resulted in a loss of Sh791 million in 2015 during the agency's first season of fraud.
Wachenje, a former director of finance, and Nyongesa, the principal supply chain management officer, were found guilty of breach of trust and authorising payments without proper oversight for a road construction tender in Kibera, Nairobi.
While the case involved several key suspects, Kabura, whose companies received millions of shillings, was acquitted due to lack of evidence.
Others acquitted under Section 210 of the Criminal Procedure Code (CPC) by Justice Wendy Kagendo Micheni last year (2023) were Benson Gethi, former Devolution PS Peter Mangiti and former NYS Director-General Nelson Githinji for lack of evidence.
Wachenje and Nyongesa were sentenced to five and seven years respectively without an option of fine for breach of trust for authorising fraudulent payments.
Nyongesa was also given an additional seven years for forging a circular from the Ministry of Public Works Supplies Branch to facilitate the payments.
"I sentenced Wachenje and Nyongesa to five years each for breach of trust. Nyongesa is also sentenced to seven years for forging a document without authority. The sentences will run concurrently," the court ruled.
The prosecution proved its case through the testimony of 41 witnesses, including former NYS Senior Deputy Director-General Adan Halakhe and Nixon Oborah, the Acting Chief Finance Officer at the Ministry of Devolution and Planning.
They testified that between December 1, 2014, and June 5, 2015, Wachenje and Nyongesa authorised payments for goods and services that were either never delivered or grossly inflated. This breach of trust resulted in a loss of Sh791 million.
The court found that the two accused authorised payments without the required approval of the Ministerial Tender Committee (MTC), resulting in the fraudulent loss. Evidence also showed that payments were made by manipulating figures on vouchers, including adding zeros, to inflate the total amount paid to companies under Kabura's directorship.
The funds were transferred to Kabura's three companies: Form Homes Builders, Reinforced Concrete Technologies and Roof and All Trading. A significant portion of the Sh791 million was credited to and withdrawn from their bank accounts at Family Bank.
Testimony from bank staff confirmed that Sh77 million was transferred from the Form Homes Builders account to a fraudulent parallel account in the name of FABRO Limited, linked to the accused, Peter Omari Otwoma, who was later acquitted.
The court heard that the actual cost of materials used in the Kibera road project was only Sh78,857,835, a discrepancy of Sh712,527,165 between the actual cost and the fraudulent payments.
Road construction experts testified that the inflated figures were directly linked to the addition of zeros on the payment vouchers.
During the trial, Oborah testified that after the Sh3.5 billion supplementary budget was loaded into the Integrated Financial Management Information System (IFMIS), he noticed discrepancies and alerted Halakhe.
A report printed in May 2015 showed that Sh918 million had been committed under the infrastructure budget, which included the disputed payments.
The MTC's approval was missing from all relevant documents and Nyongesa, who had access to the IFMIS system, was found to be responsible for approving the fraudulent transactions.
The fraudulent payments were processed through the e-procurement system and involved transactions totalling Sh172,500,000 that were not submitted to the MTC for approval.
The court also heard testimony that former Devolution PS Peter Mangiti intervened to prevent irregular payments, instructing that any efforts to reverse the funds would result in the loss of jobs.
The investigation also revealed that fraudulent documents were used to support the payments, including forged circulars and manipulated invoices.
A total of 25 payment vouchers were found to have been used to process the Sh791 million in fraudulent payments.
Wachenje's and Nyongesa's convictions follow the initial filing of charges in November 2015, which initially involved 26 suspects.
The Sh791 million Season II trial continues.
All 10 suspects are out on bail.
