Assets agency freezes account in Sh316m laundering probe

Wednesday, September 9th, 2020 00:00 |
Assets Recovery Agency Director Muthoni Kimani. The agency is investigating theft of Sh316 million. Photo/PD/File

Bernice Mbugua @BerniceMuhindi

The Assets Recovery Agency (ARA) is investigating the possible theft of up to Sh316 million from key government ministries and State agencies through fictitious payments to shadowy business entities.

The agency has obtained orders from the High Court freezing around Sh91 million, which was held in seven accounts. The money is suspected to be proceeds of crime.

In court documents, the agency said monies were obtained through complex money laundering schemes from the Office of the President, Ministry of Defence, Ministry of Interior and Coordination of National Government, and the National Treasury and Planning.

Suspicious withdrawals

At the centre of the investigations are Ruth Nyambura James, Stephen Musyoka Kinyamaso and seven business entities associated with them.

“I hereby grant temporary preservation orders against all the respondents from transacting, withdrawing, transferring and dealing in any manner however in respect of any profits or benefits of the funds specified in the named bank accounts,” ruled Justice James Wakiaga.

Nyambura is said to own Jaruh Supplies, Butah Technologies, Cailytech Solutions, Sinatab Agencies and Five Zone Traders while Musyoka owns Stekmo Enterprises and Famotech Supplies.

The agency says it received information on July 17, 2020 on suspected complex money laundering schemes and proceeds of crime involving public funds.

The agency “pursuant to the information, opened an inquiry file to investigate the seven accounts where it established that the said accounts, received suspicious payments from government ministries and State agencies totalling to Sh316,522,236”.

The payments were made to the five business entities registered as business names at the Business Registration Service by Nyambura and two other entities operated by Kinyamasyo.

“During the period between December 2014 and July 2020, there were massive suspicious cash withdrawals, transfers between the accounts under investigations to other accounts in an orchestrated complex money laundering scheme,” states Stephen Terrell, a senior State counsel with the agency in court documents.

The agency notes that Nyambura received Sh269,737,936 on the said diverse dates from government ministries and State agencies while Musyoka received Sh48,684,300.

“There are reasonable grounds to believe the said bank accounts, were used as conduits of money laundering in an effort to conceal, disguise the nature, source, disposition and movement of illicit funds,” he said in court documents.

The agency notes at one time, Nyambura had Sh58.6 million in her five business accounts at Equity Bank while Musyoka had Sh31.8 million also at Equity Bank.

Two days after the cash was deposited in the account, she allegedly withdrew Sh6 million and another Sh2 million, three days later and a further Sh900,000 after about two weeks.

Direct transfers

ARA claims Nyambura and Musyoka could be known to each other, as they have had direct bank transfers at one time, on October 18, 2019, Sh600,000 was directly wired from Nyambura’s Jaruh Supplies account to Musyoka’s Stekno Enterprises.

“An analysis of the bank statements of Jaruh Supplies alone shows it has received Sh77.2 million from government agencies soon after the account was opened in December 2014,” says Terrell in court documents.

The analysis of the bank statement of account Famotech supplies which was registered by Musyoka  on June 28, 2019, established that on July 13 a credit of Sh1.2 million was made into the account from the Treasury.

“The period between registration of the business entity and the opening of the bank account, as well as the period between the opening of the account and receipt of the funds from the national Treasury, is in itself suspicious and indicative of an orchestrated money laundering scheme,” stated the State counsel.

Justice Wakiaga certified the matter and urgent and scheduled it for a hearing on October 5.

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