Proceeds gained from suspicious business deals in Bungoma County between 2013 and 2015 are believed to be among the funds frozen by the state in connection with the Mathira MP Rigathi Gachagua’s bank account.
In a letter from the office of Attorney General and seen by this site, the Assets and Recovery Agency is investigating a suspected past money laundering activities involving the County Government of Bungoma, then under Governor Kenneth Lusaka.
According to the letter dated 23rd June, 2020, preliminary investigations established that a company known as Encartar Diagnostics Limited was paid a whooping Ksh90,000,000 by the County between January 2015 and December 2016.
“Investigations have established that a company known as Encartar Diagnostics Limited was paid a Ksh90,000,000 by the County between January 2015 and December 2016. Upon payments being made, the funds were immediately withdrawn through huge cash transactions and transferred to company/business entities under investigation for money laundering and proceeds of crime,” read part of the letter.
Documents filed in court showed that within seven (7) years, the MP received Sh5.8 billion, which included funds from companies or business entities providing services to ministries, state agencies and county governments.
According to a report by the Nation, the High Court froze more than Sh200 million belonging to Mr Gachagua pending a petition by a State agency for the money to be forfeited to the government.
The accounts at Rafiki Micro Finance bank belonging the MP, an ardent supporter of Deputy President William Ruto, will remain frozen for 90 days.
Documents filed in court showed the funds are suspected to be proceeds of crime because they are payments to companies associated with the legislator and which emanated from government agencies.
According to the Assets Recovery Agency (ARA), preliminary investigations established that Mr Gachagua and Jenne Enterprises Limited were involved in a suspected complex scheme of money laundering.
The funds emanated from the Ministry of Lands (Kenya Informal Settlements Programme), State Department for Special Planning, Ministry of Health, Bungoma County government, Mathira Constituency Development Fund, Nyeri County government and the National Irrigation Board. Justice John Onyiego of the Anti-Corruption Division of the High Court stopped the MP and Jenne Enterprises from dealing with or transferring the funds.
The Assets Recovery Agency (ARA) has frozen Ksh200 million in accounts held by Mathira MP Rigathi Gachagua. The money, which ARA now wants forfeited to the State, has been paid to the MP from various Government agencies fraudulently in a complex money laundering scheme. pic.twitter.com/XwZcawofW6
— David Maina Ndung'u🇰🇪 (@ItsDavidMaina) June 28, 2020
On July 11 before Mr. Gachagua’s account was frozen, the DCI visited Bungoma County Department of Finance and Economic Planning and summoned the Finance Chief Officer – Finance Mr Jonathan Namulala. The CO, despite not being in office when the proceeds took place, was tasked to record a statement on a missing Sh30 million payment voucher made on May 22, 2015.
The DCI also demanded a checklist of documents/files they wanted in relation to a particular tender awarded in 2014 but financed across 3 financial years. According to the source privy to the proceedings, the said tender was awarded in 2014 but was financed over three financial years. The first payment of Sh40 million was made on December 24, 2014 while the last payment of Sh19 million was made on April 15, 2016.
This week, the DCI have interviewed procurement officers that interacted with the procurement process of the tender during the said financial year where there was also an alleged transaction of Ksh90 Million to a particlular account before being withdrawn in cash some hours later.
Among the documents the DCI have been investigating include the tender advertisement, bidding documents for all the bidders, the evaluation/tender committee reports, original payment vouchers for the Sh30 million, budget and procurement plans for the financial year 2013/2014 among others.
According to the report published by the Nation, the funds at Rafiki Micro Finance Bank are held in three accounts, with one holding Sh165 million, a second account holds Sh35 million while the other holds Sh773,228. All the three are registered in the MP’s name.
The agency opened an inquiry and subsequently applied for and was issued with warrants to investigate the accounts. Further, the documents stated that after being transferred to companies or business entities, the funds were ultimately moved to a fixed deposit account, which is Mr Gachagua’s personal account.
“That within the said period, there were massive suspicious cash withdrawals, transfers, inter and intra-bank transfers from other accounts to the accounts under investigations and other bank accounts owned by Mr Gachagua in suspicious complex money-laundering schemes,” the agency said.
“There are reasonable grounds to believe that the suspect’s bank accounts were used as a conduit for money laundering in efforts to conceal, disguise the nature, source, disposition and movement of illicit funds and should be preserved,” the agency submitted to court.
ARA argued that it was apprehensive that unless the court intervenes, the MP was likely to withdraw the funds and defeat the cause of justice.