The nocturnal raids staged by detectives in search of dirty money has triggered panic into some overnight billionaires and forced them to device unconventional methods to conceal their questionable money.
Some of the balloon millionaires, investigations now reveal have turned their cars into mobile banks where they are hiding their millions, obtained through dubious means, from the itchy fingers of anti-graft agents and the taxman.
The more enterprising ‘billionaire’ investors have been infusing their money into the economy through purchase of prime properties, real estate as well procuring top of the range luxury vehicles.
Some methods have somehow opened opportunities for hawkish minions who on stumbling on the hidden millions have carted away the loot, leaving their deprived bosses seething in anger.
A month ago, a powerful public officer was left speechless and helpless after her trusted driver and bodyguard who are both security officers took off with a bundle of cash discreetly hidden in the glove compartment of the official vehicle.
“The bundle, which was in a big envelope had been lying in the car for a week. The driver and the bodyguard looked at what was inside and when they discovered it was money, they conspired to steal it,” our source intimated.
When the government officer, realised the Sh10 million she had been keeping in her vehicle was gone, she was outraged but could not formally complain to the police because she would have to explain how she had earned it.
A colleague of the top officer also lost Sh21 million to his bodyguard. The officer had been sending his subordinate to collect parcels from third parties which the latter deciphered to be money. After every mission, the bodyguard would only receive a tip of Sh500.
Requested for a transfer
Last month, the bodyguard went to collect cargo which turned out to be Sh21 million but failed to return to his duty station, and later requested for a transfer.
In another office in the city, a senior government official cannot see eye-to-eye with his aides after Sh50 million which had been stashed in a safe disappeared.
The Sunday Standard has established that the money was in foreign currency and had been kept in the safe, normally accessed by two aides.
“When the boss asked for the money, he was shocked to learn it was missing. This is when the blame game started as each aide accused the other of secretly carting away the money,” a source says.
Earlier on, the collapse of Imperial Bank helped raised the veil of secrecy that influential bankers have embraced in concealing funds – using nameless customer accounts.
In the case which is thought to be widespread, bank officials opened multiple accounts under phony identities meaning a customer could be aided by insiders to hide colossal amounts of money.
Similar practices were alleged in the clamping of Charter House bank. Prevalence of the fictitious bank accounts informed the requirement by the Central Bank of Kenya on commercial banks to strict adherence of Know-Your-Customer guidelines.
Other practices including wiring huge kickbacks to foreign countries and then they troop back in asset forms like electronics, high-end cars and heavy machinery. Once here, they are sold and cash channeled into the formal banking system as genuine revenues from clean business.
In yet another trick, detectives are combing through transactions of a senior Judiciary official to determine if they employed a newest trick in the book to hide proceeds of crime.
In the case, a commercial bank extended a loan to the official who invested in various assets. Shortly thereafter, the debt was settled by another party leaving both the bank and the customer satisfied.
In May last year, when investigators raided a house of a National Land Commission official, they announced that they recovered over Sh17 million. The investigators found Sh16 million in US dollars and Sh1 million in Kenya currency, which was suspected to be proceeds of kickbacks from the Standard Gauge Railway payout.
Back in Nairobi, one of the aides is said to have lost over Sh30 million after his homes were raided by detectives who recovered the money.
In another case, a senior government officer bought a house for Sh170 million, which was paid in cash. The house, is not occupied and was occasionally used for some dubious transactions, according to neighbours.
According to Asset Recovery Agency (ARA), Kenya’s public sector, is losing billions of shillings every year and has become an issue of national security as it was undermining the country’s social and economical well being.
ARA director, Muthoni Kimani told the Sunday Standard that most of the dirty money was being used to purchase of property as it could not be easily banked without raising questions.
“Because of digitisation, most of these people are afraid of leaving electronic footprint and are therefore investing the questionable money in purchase of shares and treasury bonds, “ Kimani added.
She added that from the experience of the two mega scandals in National Youth Service, the mode of operation was now banking excess money in the names of children, siblings and close relatives.
Initially, the suspects were splashing their cash by purchasing exotic vehicles and posh homes but this trend has changed after the agencies involved in fighting graft started freezing and seizing the ‘questionable assets.”
Transparency International, Kenya Chapter Executive director, Samuel Kimeu described property market as the biggest laundry of illicit money.
“This money is being used to buy apartments which are then sold or leased out. Once the buyer sells, the money is then introduced into the mainstream economy,” he added.
This he explained did not augur well for the country for it distorted the market and created a glut and in some instances led to exaggerated prices in real estate.
The recent raids by Ethics and Anti-Corruption Commission and Directorate of Criminal Investigations have demonstrated that there is a lot of cash which is not in the banks.
This tallies with a study conducted by Thomson Reuters Foundation published in 2013 found that “In the leafy suburbs, five-bedroom villas with servants’ quarters sell easily for $1 million in cash.”
In the course of our investigations we encountered a property owner who has more than five offers from a top national government official, a governor and a bodyguard of ousted Gambian president Yahya Jammeh for his property in upmarket Nairobi.
All the buyers which were offered by agents who have an informal network offered to buy the mansion, sitting on half acre piece of land for Sh100 million cash but the vendor refused insisting that the money had to be banked.
Last month a top government officer, who has been implicated in a number of mega graft scandals was in the process of purchasing about one and a half acre land in Kileleshwa for Sh200 million when detectives froze her accounts.
Another study conducted in 2012 indicated that it was very easy to launder money in Kenya using untraceable shell companies, which are widely used to move dirty money internationally.
“Out of 182 countries tested, researchers at the University of Texas, Griffith University and Brigham Young University found that Kenya – in violation of international rules – was least likely to ask people for identity documents when they tried to open a shell company,” the study found. Source link