Traders pay heavy fines for theft of public money
A number of people trading with the government have in recent months been hit with heavy fines for stealing public funds.
Others have had their wealth forfeited to the government after being found to have acquired it illegally.
The latest is Wilfred Munyoru Weru, the former finance and administration director at the defunct Discount Securities Ltd.
Weru has been condemned to a Sh900 million fine over theft of Sh1.2 billion from the National Social Security Fund (NSSF) in 2008.
The ruling came just weeks after Quorandum Ltd director, Mukuria Kamau, was fined Sh900 million for stealing Sh180 million from the Youth Enterprise Development Fund (YEDF) in 2015.
In another recent ruling, Eveline Awino Ogutu – trading as Nyangume Enterprises – and Bob Kephas Otieno were ordered to compensate the Homa Bay County Assembly Sh26,272,460.
The Ethics and Anti-Corruption Commission (EACC) told the court that Ogutu and Otieno were a couple and that the money was fraudulently acquired between August 2016 and February 2017 as no goods or services were rendered to the assembly.
Weru was convicted after the NSSF lost money through payment to Discount Securities Ltd – a stock brokerage firm – for goods not supplied.
Tonga Investments Ltd
The offence, the EACC said, was committed between May 1, 2006 and October 15, 2008.
According to the prosecution, Weru acquired part of the money while trading as Topend Investments and Tonga Investments Ltd.
He was convicted in January 2022 to a cumulative sentence of 12 years and a Sh900,762,248 fine for economic crimes.
The High Court threw out his application for review of the sentences last week.
Weru had complained that the sentences “were harsh and excessive, considering the circumstances of the case”.
He had been charged with conspiracy to defraud and ordered to pay a Sh1 million fine or two years in prison for default.
Weru was also found guilty of fraudulently acquiring public property and directed to pay Sh1 million as fine or three years imprisonment. He was told to pay two times the Sh1,201,143,372 loss occasioned to NSSF.
The loss was multiplied by two and then divided equally between the three people convicted on that count. It means he will pay Sh800,762,248 or serve nine years in prison for every charge.
Weru was convicted alongside former executive director of Discount Securities Ltd David Murungu Githaiga, former investment manager Isaac Nyakundi Nyamongo and former NSSF investment manager Francis Moturi Zuriels.
Weru’s attempts to have the sentences quashed hit a snag when the High Court dismissed his review application.
According to Weru, the trial magistrate did not state when the sentences would begin, thus making them unlawful.
He added that the lower court ignored the 2016 guidelines by directing that the sentences to run consecutively even though the offences arose from one transaction.
But Justice Esther Maina said the sentences given by the magistrate were in accordance with the law.
The High Court found no irregularity, illegality, impropriety or anything incorrect or unprocedural in the sentences imposed by the magistrate to warrant their dismissal.
“The loss occasioned on NSSF amounted to Sh1,201,143,372.40, which if doubled is Sh2,402,286,744.8. The magistrate took into account the loss but distributed it equally between the three accused persons. The sentence was therefore more on the lenient side than the excessive side,” Justice Maina said.
“The apportionment of the fine equally was to ensure equity and unless the applicant can with precision disclose the extent to which he personally occasioned the loss to the NSSF, I see no justification to disturb the sentence”.
Justice Maina dismissed businessman Mukuria Ngamau’s appeal and upheld the decision to order him and Quorandum Ltd pay the government Sh180,364,789 they illegally acquired from the YEDF.
To be freed, the trader was required pay Sh721 million in fines and Sh180 million as compensation to the state.
Some of Ngamau’s wealth was surrendered to the government five years ago.
He was also found guilty of unlawful acquisition of public property and making false documents.
The properties Ngamau had bought using the illegally acquired money were seized by the Assets Recovery Agency after being flagged as proceeds of crime. They included a five-bedroom house on Hatheru Road.
Ngamau appeared in court alongside former YEDF officials Catherine Namuye (chief executive officer) and Bruce Odhiambo (board chairman).
The two died as the case proceeded.
The offences were committed in Nairobi between November 17, 2014 and May 4, 2015, the court heard.
The trail showed that Ngamau and his company received the money without rendering any ICT consultancy after forging contract documents.
Ngamau colluded with Namuye to transfer the money to Quorandum Ltd through the YEDF’s main account at Chase Bank.
The court said the prosecution proved its case, based on letters by Namuye as well as invoices and contract agreements.
The prosecution said Ngamau pitched the idea of an ICT consultancy tender to the Fund CEO and that they later discussed its implementation.
In the Sh468 million theft at the National Youth Service (NYS), a company called Arkroad Holdings on Friday had its Sh813,597 forfeited to the state.
The firm was at the centre of the NYS II scandal in 2018.
Arkroad Holdings directors are Anthony Makara Wamiti and Peter Wagura Kimani.
It was one of the 10 firms accused of getting millions of shillings from NYS without rendering any service.