The government has won a major battle in the war against corruption after suspects in the infamous National Youth Service Scandal I weere ordered to surrender property worth millions of shillings.
The High Court on Thursday allowed forfeiture to the State of some properties believed to be proceeds of crime acquired from funds that were syphoned from the NYS coffers.
The total funds in the scandal are estimated to be Sh791 million.
Justice Mumbi Ngugi directed that a maisonette in Kasarani, a plot in Ruiru and four Toyota Prados be forfeited to the government immediately following a successful case by the Assets Recovery Agency.
The house is valued at Sh21 million, the land in Ruiru at Sh3.8 million and each of the four Toyota Prados was bought for Sh5.2 million.
In her judgment, justice Ngugi said the Assets Recovery Agency has established on a balance of probabilities that the properties subject of the application were acquired using funds fraudulently obtained from the NYS.
“It is my finding, therefore, and I so hold that the assets the subject of this matter owned directly or indirectly by the respondents are proceeds of crime.”
The judge added, “It is very detailed averments on the movements of funds from the NYS to the accounts of one Josephine Kabura Irungu to the accounts of the 1st to 6th respondents have not been controverted."
The judge noted that eight had an obligation to surrender the assets, once the Assets Recovery Agency established on a balance of probability that the assets were the proceeds of crime.
“In the circumstances, the respondents having elected not to present their case and the applicant having established on a balance of probabilities that the assets at issue are proceeds of crime, this court is satisfied an order of forfeiture is merited.”
In the assets recovery case, lawyer Adow Mohammed moved to court suing Sam Mwadime, Susan Mndanyi, Vandame John, Ndungu John, Gachoka Paul and James Kisingo.
They were served with suit papers twice through local dailies but the application by the Assets Recovery Agency was unopposed.
Justice Ngugi said none of them ventured to explain the source of the funds for the purchase of the assets in question or to counter in any way the version of events offered by the Assets Recovery Agency.
In its application, the agency said that the requested forfeiture is based on investigations by the Directorate of Criminal Investigations into allegations of theft and fraud of funds amounting to Sh791 million from the Devolution ministry.
The investigations had revealed massive fraud and embezzlement of public funds by both public officials and private persons some of whom have been charged.
The investigators recorded statements from more than 25 members of staff in different departments at the NYS, including procurement.
The investigations found that Sh695 million was committed in the NYS Ifmis system due for payments to business entities known as Form Home Builders, Roof and All Trading, Reinforced Concrete Technologies, Tegmen Trading, Grumium Engineering and Draco Capital. The funds had not, however, been released from the National Treasury.
A search at the Companies’ Registry showed at least three of the companies belonged to Josephine Kabura.
The other companies, namely Tegmen, Grumium and Draco, belonged to two other individuals who also recorded statements with the DCI.
They had stated that they supplied hard and soft stones to upgrade roads in Kibera and Mukuru slums but had not been paid for their services.
An inspection on August 13, 2015, by a team of Public Works officials in Kibera to establish the supplies and quantities of the work executed by the business entities showed the cost of work done was Sh78 million, a small fraction of payments made by the NYS.
It was also established that the Sh791 million lost by NYS was wired through the G-Pay system to accounts belonging to Kabura.
A total of Sh218 million was transferred to Form Home Builders, Sh252 million to Roof and All Trading and Sh320 million was transferred to Reinforced Concrete Builders.
Of this, Sh381 million was subsequently transferred to an account belonging to John Kago.
It is claimed that Kago entered into several transactions to purchase or invest in several properties and assets for and on behalf of other persons using the funds.
These are the assets subject of the application by the agency that are currently preserved.
The first of these assets is the maisonette at Kasarani.
According to evidence tabled before court, the agency established that Mwadime allegedly used a forged national identification card to open an account at Family Bank.
He then bought the house in question. The land was registered in his wife Susan’s name.
Mwadime also bought a parcel of land in Ruiru, Juja.
In considering the case on Thursday, Justice Ngugi noted that though some of those who are charged have not been convicted, the law is clear that for purposes of civil forfeiture, a conviction is not a necessary precondition.
She said that from the facts presented by the agency, the assets in question were purchased using funds stolen from NYS.