A pastor will serve 10 years imprisonment for sexually exploiting a teenager.
An American couple has filed an application against a Kenyan businessman and his American wife over a $870,000 (Sh112.2m) debt.
In an application before the US District Court, District of Utah, Matthew Shaw and his wife Brooke Shaw have sued Kenyan businessman Julius Mwale and his wife Kaila Mwale over failure to refund $870,000 (Sh112.2m) that the Mwale allegedly borrowed ostensibly to invest in Kenya and the DRC.
In the application in our possession, Mr Mwale is accused of presenting ‘KE International’ as an independent, third-party construction and engineering company that had contracts for building self-sustaining cities in Kenya and beyond.
The American couple claims that Mr Mwale, through his company, KE International, allegedly duped them into investing in ‘projects’ in Africa which upon their physical visit to Kenya did not represent what they had been promised.
According to court papers, the Shaws had first met the Mwales on February 18, 2022, at the home of Gordon Bowen in Holladay, Utah, where Mat and Savanna Shaw (the Shaws’ oldest daughter performed for guests who were invited to a private dinner.
“Presenting themselves as billionaires, the Mwales made an immediate connection with the Shaws, initially under the guise that their children could be friends,” reads the application filled by Aaron B. Clark and Trinity Jordan, the attorneys for the Shaw family.
The court papers read soon after making this connection, Mr Mwale began sending Mat text messages sharing recordings of supposedly private video calls and emails with prominent individuals such as Senator Mitt Romney, Meg Whitman (the U.S. Ambassador to Kenya), Ruth Porat (CFO of Google), David Beasley (president of UN World Food Program), and others.
Mr Mwale, the court papers add, also shared supposedly confidential contracts with prominent companies, all in an apparent effort to bolster his credibility with the Shaws. Other videos Mr Mwale sent appeared to show the Mwale children on what was represented to be one of the Mwales’ private jets, the application reads.
The Mwales also invited the Shaws to visit their estate in San Jose, California, which they did on several occasions, the court papers say.
“During the Shaws’ visits to the San Jose property, the Mwales showed off extravagant features of the estate, including expensive cars (that they claimed to own) worth hundreds of thousands of dollars, and a wine cellar they claimed held a wine collection valued at approximately $250 million (Sh32 billion),” the court papers read.
“The Mwales also claimed that they owned a jewelry collection worth $870 million (Sh113 billion)”
By March 2022 – and specifically on or around March 18, 2022 – the Mwales were pushing the Shaws to contribute to a series of investment opportunities run by Mwale, the application states.
The Mwales told the Shaws that they typically relied on their own assets for investment opportunities of this kind, “but that they were “allowing” a close circle of family and friends, including the Shaws, to contribute upwards of $50 million (Sh6.5 billion) as outside investors in the project.”
Mr Mwale told the Shaws that “the window was closing” and time was “running out” and that he wanted them to participate in the investment.
A Kenyan businessman, who hails from Butere, in Kakamega County, Mr Mwale offered to take money from the Shaws as a “loan” with a guaranteed 20 percent per annum return.
The Mwales assured the Shaws that the upside on their investment would not be limited to repayment on the loan but would be rolled into the investment with the potential to generate returns of ten times the initial contribution.
The Mwales provided further reassurance by promising that if the Shaws ever wanted the money they were investing back, the Mwales would simply return the Shaws’ contribution – even if it meant having to sell a few bottles from their wine collection.
The Mwales also told the Shaws that the funds they were contributing would be rolled into investments managed by Julius’s parent company, Tumaz, and Tumaz, which they were told was worth approximately $60 billion.
The Shaws agreed to participate in the investment swayed by these promises and assurances.
In a later in-person meeting on May 20, 2022, Mr Mwale said several African countries had gifted him millions of acres of land to help build energy-efficient self-sustaining cities, similar to one he claimed to have already built in his hometown in Kenya.
Mr Mwale further claimed at this May 20, 2022, meeting that the Shaws’ money would be spent on geological surveys in the Democratic Republic of the Congo (DRC) to build infrastructure that would eventually support a battery manufacturing plant.
According to the court papers, the Shaws made their first monetary contributions to the Mwales on April 4, 2022. By June 22, 2022, the Shaws had paid the Mwales a total of approximately $1.7 million (Sh221 million).
In August 2022, the Shaws visited Kenya to see the results of their massive investment. The trip to Africa, which included visits to the coast and an African safari, quickly turned south when the Shaws arrived at Mwale’s purported self-sustaining city.
“The hospital, previously represented as the world’s largest and most advanced, was a complete construction mess – as it had been, the Shaws later learned, for more than five years,” the application says. “The hospital was, in short, simply a shell – nothing like what was represented.”
The contrast between the Mwales’ representations and the reality conveyed the clear impression that the hospital was a mere ruse the Mwales used to tell others that Julius had founded a bustling city in Kenya.
The individuals who worked with the Mwales also turned out to be other than as advertised.
“The golf course, supposedly built on ancestral lands donated by local farmers, was also nothing like what was represented. The course was unfinished. There was no clubhouse, no facilities. In fact, the greens had no holes,” the court papers state.
“Julius also showed the Shaws the rental homes he claimed to have built to generate revenue for the farmers. The homes were little more than vacant 10 x 10 concrete boxes with no facilities,” the application adds.
Alarmed by the contrast between representation and reality, on September 9, 2022, the Shaws asked the Mwales to return the money they had invested.
“On information and belief, the Shaws now have reason to believe that Derek does not own KE International,” the application says. “The Shaws’ demands to have their money returned are Ignored.”
As a result, the Shaws have taken the Mwales to court demanding a refund of the amount they lent him ostensibly to ‘build cities’ and invest in the DRC.
The Mwales made attempts to repay the money albeit in installments but this too did not work.
“At the time, the Mwales represented that they would return the Shaws’ money after a 60 to 90-day “due diligence” period,” the Shaws allege in the application.
The Shaws and Mwales had phone calls roughly every two weeks after that date, with the Mwales continually furnishing excuses for why the money could not be returned.
After the Mwales explained the due diligence period had been extended to 120 “business” days, they promised the Shaws that by March 5, 2023, they would return their money.
However, the Mwales did not honour their pledge. At that point, it seemed clear to the Shaws that the Mwales scammed them, misleading them to “invest” roughly $1.7 million in a fraudulent investment scheme.
After the Mwales failed to return the Shaws’ money by March 5, 2023, the Shaws and Kaila, through counsel, negotiated a “Loan Modification Agreement” by which Kaila agreed to repay the Shaws’ investment money in a series of four installments over seven months.
Under the Loan Modification Agreement, Kaila signed confessions of judgment for each installment owed.
As Kaila made the promised payments, the Loan Modification Agreement required the Shaws to return to Kaila the corresponding confession of judgment.
The final installment of $850,000 was originally due on November 15, 2023. Kaila did not make the promised payment by November 15, 2023.
Rather, through her attorney, Kaila requested an extension of the due date of the final installment to January 24, 2024.
In exchange for the additional time, Kaila offered to pay an additional $20,000 in interest, making the total final payment $870,000.
The Shaws agreed to Kaila’s requested modification of the Loan Modification Agreement.
Kaila likewise failed to pay any of the then $870,000 installment due by the new January 24, 2024, deadline, the amount that the Shaws are demanding that it be paid.
They have now moved to the court in Utah to claim back their money from Mr Mwale.
