12 June 2018

Kenya: City Banks Ordered to Freeze Bank Accounts of NYS Scam Suspects

Investigations into the looting of the National Youth Service (NYS) moved a notch higher on Monday when a magistrate's court issued an order freezing several bank accounts belonging to suspects in the scam.

The directive followed a suit by the Assets Recovery Agency (ARA), which, through investigating officer Frederick Musyoki, said it is investigating the accounts for money laundering.

"Whereas it has been proved to me on oath that, for the purpose of an investigation into the commission of offence of money laundering and tracing of proceeds, an order of production to inspect the books of accounts relating to the accounts should be, and is hereby, granted," the magistrate ruled.

SCRUTINISE ACCOUNTS

This means the ARA can now scrutinise account opening documents, statements of accounts since their inception to date, and investigate cheque and cash deposits as well as withdrawals.

Some of the banks affected by the directive are Barclays, Standard Chartered, Equity, Cooperative, Family and National Bank of Kenya.

Others are Stanbic, Diamond Trust, Kenya Commercial, Consolidated and Guaranty banks.

Ms Ann Ngirita, one of the 47 suspects already charged in court, is among those whose bank accounts have been frozen. She holds an account at Unaitas Sacco Microfinance Bank.

Her brother, Jeremiah, runs an account at Stanbic, while her sister and mother -- Phyllis and Lucy Wambui, respectively, bank at Kenya Commercial Bank. All their accounts were also frozen.

The ARA said it was prompted to seek to have the accounts frozen because only then can they be adequately examined. Leaving them to run, it said, would have exposed them to manipulation by the suspects, either through withdrawals or emptying of funds.

Among those charged in connection with the looting at NYS are Youth Affairs Principal Secretary Lilian Mbogo-Omollo and NYS director-general Richard Ndubai.

NOT GUILTY

They all pleaded not guilty to charges of fraud, abuse of office and conspiracy to commit corruption. The cases against them relate to the loss of Sh457 million from NYS.

Magistrate Douglas Ogoti declined to release them on bail and had them detained at Lang'ata Women and Industrial Area prisons pending the trial of their case.

Mr Ogoti said the economic crimes charges against the suspects are serious since they have deep-rooted conspiracies and involve huge loss of public funds.

A number of the suspects have already filed suits at the High Court to challenge the lower court's decision to deny them bond. Their applications will be heard tomorrow.

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