[2022] KEHC 9806 (KLR)

The Assets Recovery Agency v Ongaga & 3 others (Miscellaneous Application 46 of 2018) [2022] KEHC 9806 (KLR) (Anti-Corruption and Economic Crimes) (16 February 2022) (Judgment)

Neutral citation: [2022] KEHC 9806 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Miscellaneous Application 46 of 2018

JN Onyiego, J

February 16, 2022

Between

The Assets Recovery Agency

Applicant

and

Felix Obonsi Ongaga

1st Respondent

Daniel Stephen Ouma

2nd Respondent

Peter Mukangu Mwangi

3rd Respondent

Anthony Nyaga Mwangi

4th Respondent

Judgment

1. Pursuant to Section 81, 82 and 83 of the Proceeds of Crime and Money Laundering Act (POCAMLA), the assets recovery agency (hereinafter the Applicant) filed an application dated 30th July 2018 vide a Misc. Application Case No. 89 of 2018 seeking orders prohibiting the respondents and or their agents or representatives from transferring or dealing in any manner with Kshs. 6,488,736. 54 held in their various bank accounts.

2. Subsequently, preservation orders were issued and the same gazetted on 10th August 2018 pursuant to Section 83 of POCAMLA directing as follows;1. That the Application is certified urgent.2. That I therefore allow the application and issue preservation orders prohibiting the respondents and/or their agents or representative from transacting, transferring and or dealing in any manner with funds held in the following accounts:-i.Kshs. 384,402. 10 in account number 0101xxxxxxx at Standard Chartered Bank Kenyatta Avenue Branch, in the name of Felix Obonsi Ongaga.ii.Kshs. 289,544. 62 in account number 0110xxxxx at Cooperative Bank, Upper Hill Branch in the name of Daniel Stephen Ouma.iii.Kshs. 190,861. 22 in account number 0160xxxxxxxx at Family Bank Nairobi City Hall Branch in the name of Daniel Stephen Ouma.iv.Kshs. 4,828,241. 60 held in account number 0260xxxxxxxx at Equity Bank Kimathi Street Bank Branch in the name of Peter Mukangu Mwangi.v.Kshs. 32,392. 51 in account number 0020xxxxxxxxxx at Equity Bank Fourways Branch in the name of Peter Mukangu Mwangi.vi.Kshs. 763,294. 49 in account number 01501xxxxxxxxx Equity Bank, Mama Ngina Branch in the name of Anthony Nyaga Mwangi.3. ThatApplicant to comply with Section 83 of POCAMLA by publishing a Notice of this Order in the Gazette Notice. The Respondents to be served with the Notice within 21 days.

3. Subsequently, the applicant lodged forfeiture proceedings for recovery of the sums of money held and preserved in the said bank accounts through an Originating Motion dated 3rd September 2018 and filed on 12th October 2018 in accordance with Section 81, 82, 90 and 92 of POCAMLA seeking orders as follows;1. Thatthis Honourable Court be pleased to issue an order declaring that funds amounting to Kshs. 6,488,736. 54 held in the following Respondents’ bank accounts are proceeds of crime and liable for forfeiture to the Government;i)Kshs. 384,402. 10 held in account number 0101xxxxxxxxx at Standard Chartered Bank Kenyatta Avenue Branch, in the name of the 1st Respondent, Felix Obonsi Ongaga.ii)Kshs. 289,544. 62 held in account number 0110xxxxxxx at Cooperative Bank, Upper Hill Branch in the name of the 2nd Respondent, Daniel Stephen Ouma.iii)Kshs. 190,861. 22 held in account number 0160xxxxxxx at Family Bank, Nairobi City Hall Branch in the name of the 2nd Respondent, Daniel Stephen Ouma.iv)Kshs. 4,828,241. 60 held in account number 0260xxxxxxxx at Equity Bank, Kimathi Street Branch in the name of the 3rd Respondent, Peter Mukangu Mwangi.v)Kshs. 32,392. 51 held in account number 0020xxxxxxxxxx at Equity Bank, Fourways Branch in the name of the 3rd Respondent, Peter Mukangu Mwangi.vi)Kshs. 763,294. 49 held in account number 0150xxxxxxxxxx at Equity Bank, Mama Ngina Branch in the name of the 4th Respondent, Anthony Nyaga Mwangi.2. That this Honourable Court be pleased to issue an order that the above funds be forfeited to the Government and transferred to the Criminal Assets Recovery Fund.3. Thatthis Honourable Court do make any other ancillary orders it consider appropriate to facilitate the transfer of the forfeited funds to the Government of Kenya.4. Thatcosts of the application be provided for.

4. The application is premised upon grounds stated on the face of it and an affidavit deposed by Esther Muchiri a State Counsel at The Assets Recovery Agency sworn on 3rd October 2018 and another one sworn by Cpl Isaac Nakitare an investigator attached to Assets Recovery Agency sworn on 18th September 2018.

5. According to the applicant, the 1st Respondent Felix Obonsi Ongaga is the former Director of Corporate Services at Information and Communication Technology Authority (ICTA) and a beneficially of Kshs. 384,402. 00 held in his account No. 0101xxxxxxxxx Standard Chartered Bank being funds illegally transferred from ICTA bank accounts to his account.

6. The second respondent, is the former Acting Finance Manager at ICTA and the beneficiary of a total of Kshs. 480,405. 84 which funds were illegally transferred from ICTA bank accounts to his bank accounts namely;a)Kshs. 289,544. 62 in Account No. 0110xxxxxxxxxxx at Co-operative Bank, Upper Hill Branch;b)Kshs. 190,861. 22 in account No. 0160xxxxxxxxxxx at Family Bank, Nairobi City Hall Branch.

7. That the 3rd respondent, Peter Mukangu Mwangi is the former Accountant at ICTA and the beneficiary of funds held in his bank accounts;a)Kshs. 4,828,241. 60 account No. 0260xxxxxxxxxxxx held at Equity Bank, Kimathi Street Branch.b)Kshs. 32,392. 51 held in his bank account No. 0020xxxxxxxxx at Equity Bank, Fourways Branch which funds were illegally transferred from ICTA bank accounts to his bank accounts.c)That the 4th respondent, is the former cashier at ICTA and beneficiary of Kshs. 763,294. 49 held in his account No. 0150xxxxxxxxxxxx at Equity Bank, Mama Ngina Branch which funds were illegally transferred from ICTA bank accounts to his bank account.

8. It is the applicant’s claim that, on 20th March 2017, it received information from the Acting Chief Executive Officer (CEO) of ICTA, one Robert Kariuki Mugo that there was a suspected theft and fraud of funds amounting to Kshs. 74,281,498. 10 from ICTA by the respondents. In the course of the said investigations, the applicant obtained orders from the court authorizing it to investigate accounts in the respondents’ accounts and freeze the same. Through the said investigations, it was discovered that theft from ICTA bank account No. 3008xxxxxxxxxxxxx committed by the respondents started sometime 2016 whereby a sum of Kshs. 29,040,011 was stolen.

9. According to Nakitare, further investigation revealed that between 24th January 2017 and 6th July 2017, the 1st and 2nd respondents unlawfully authorized payments amounting to Kshs. 155,838,193 from ICTA bank Account No. 3008xxxxxxxxxxxx and 3000xxxxxxxxxx held at Citi Bank which funds were withdrawn by the 3rd and 4th Respondents and same amount directly transferred to the respondents’ bank accounts.

10. He further deposed that, funds amounting to Kshs. 6,488,736. 54 were illegally transferred from ICTA bank accounts to the respondents’ various accounts through complex money laundering schemes thus contravening various provisions under the POCAMLA.

11. According to Cpl Nakitare, ICTA had several bank accounts namely; Account Nos. 2008xxxxxxxxxx, 3000xxxxxxxxxx, 3000xxxxxxxxx, 3001xxxxxxxxxx, 3000xxxxxxxxxxx all held at Citi Bank Nairobi headquarters Branch to which the 1st and 2nd respondents were signatories (see copy of internal memo report marked IN-1 and 3).

12. He averred that, vide management resolution on its board minutes of 25th November 2016, (IN-4 A & B), the Acting Chief Officer (C.E.O) Director Corporate Services (the 1st respondent) were to sign cheques and approve payments above 500,000/- whereas the Director Corporate Services (1st Respondent) or Acting Manager Finance (2nd Respondent) were to approve and sign cheques below Kshs. 500,000/- (see annexture IN-5A Mugo’s statement).

13. That on 14th July 2017, the Acting C.E.O was informed by the Citi Bank Relationship Manager one Wachuka Wachira who was also ICTA contact person at the bank that, there were several suspect withdrawals from ICTA accounts below Kshs. 500,000/- which funds were directed to ICTA head office at Teleposta Towers.

14. Subsequently, the CEO demanded for a report on the same withdrawals from the bank (see annexture IN-8 A copy of cash withdrawal report). From the said report, it was established that there were several cash withdrawals of about 13 or 14 per day made from account No. 3000xxxxxxxxx below Kshs. 500,000/- either withdrawn over the counter by the 3rd and 4th respondents and or delivered by cash in transit by companies among them Wells Fargo Ltd to the 3rd and 4th respondents at ICTA office (see annexture IN-8A).

15. That the withdrawals of sums below Kshs. 500,000/- was deliberate so as to avoid involvement of the CEO who could be required to sign for amounts exceeding Kshs. 500,000/-. It was further revealed that the said cash transactions were created in the ICTA systems by the 3rd and 4th respondents and approved by the 1st and 2nd respondents (see annexture IN-8b).

16. Upon request for audit by the CEO, the internal Auditors teamed up with internal Auditors from the State Department ICT who demanded from the 1st respondent submission of a detailed bank accounts statements stamped from the bank, bank reconciliation statements for the period 1st July 2016 – 10th June 2017 and cash count reports. Having failed to furnish the said documents, the 1st to 4th respondents were suspended.

17. Upon receiving ICTA bank statements from the bank for the period 2nd June 2016 to 19th July 2017, cash delivery notes by Wells Fargo from 12th July 2016 to 7th July 2017, and for the period 8th January 2016 to 19th March 2017, the auditors compiled a report confirming the fraud and theft with suspicious transactions totaling to Kshs. 29,040. 00 from ICTA account No. 3000xxxxxxxx conducted by the respondents as follows;a)Between 8th January 2016 and 22nd December 2016, Kshs. 18,450,780 was withdrawn in cash from ICTA Account No. 3000xxxxxxxxxx and delivered to the 3rd and 4th respondents (annexture IN-10Aand 10B bank statement and audit report respectively).b)Between April and Nov. 2016 Kshs. 7,134,285 was unlawfully transferred from ICTA bank account No. 3000xxxxxxxxxxx to MOD Technologies and All Solutions Account No. 0820xxxxxxxx Equity Bank Donholm and Kikuyu Branches (see annexture IN-11 MOD bank statement and audit report (IN-10B).c)Between 8th August and 22nd August 2016, Kshs. 3,454,946 paid to the respondents and staff for training and field inspection which was suspicious as per diem amount paid was the same despite difference in seniority (see audit report marked IN-10B).

18. That the audit report dated 22nd August 2017 further revealed that between January 2017 and July 2017, the 1st and 2nd respondents unlawfully authorized payments amounting to Kshs. 155,838,193/- from ICTA bank account No. 3000xxxxxxxxxx and 3000xxxxxxx Citi bank through a carefully crafted scheme involving the respondents. That between 10th January 2017 and 6th January 2017, Kshs. 37,023. 58 was withdrawn from ICTA account No. 3000xxxxxxxx by the 3rd and 4th respondents without supporting documents namely; requisition for payment, payment vouchers, surrender forms etc.

19. That on 10th January 2017, a total of Kshs. 995,650/- was withdrawn in cash from ICTA Account No. 3000xxxxxxxxxxx and delivered to the 3rd respondent. (see annexture IN-13 banking schedule dated 18th January 2017 and annexture IN-12).

20. Further audit revelation traced Kshs. 20,801,106/- as unlawfully withdrawn from ICTA Account No. 3000xxxxxxxx between 24th January 2017 and 6th July 2017 and transferred to the respondents’ Account Nos.a)Between 24th January 2017 and 25th April 2017 Kshs. 4,685,640 was transferred to the 1st respondent’s Account 0101xxxxxxxxx Std Chartered bank Kenyatta Avenue (see annnexture marked IN-14 copy of 1st respondent’s bank statement)b)Between 24th January 2017 and 21st April 2017, Kshs. 4,960,173 was transferred to the 2nd respondent’s bank Account No. 0110xxxxxxxxxx held at Co-operative Bank Upper Hill Branch (see annexture IN-15 copy of the 2nd respondent’s bank statement)c)Between 24th January 2017 and 21st April 2017, Kshs. 694,888/- was transferred to the 2nd respondent’s bank Account No. 0160xxxxxxxxxx held at Family Bank Nairobi City Walk (annexture marked IN-16 being 2nd respondent’s bank statement).d)Between 24th January 2017 and 31st May 2017 Kshs. 990,120/- was transferred to the 3rd Respondent’s bank account No. 0024xxxxxxxxx Equity Bank Fourways Branch (annexture IN-17 2nd respondent’s bank statement).e)Between 24th January 2017 and 31st May 2017 Kshs. 4,451,090 was transferred to 2nd respondent’s bank Account No. 0260xxxxxxxxx Equity Bank Kimathi Branch (IN-18 copy of 3rd respondent’s Equity Bank).f)Between 24th January 2017 – 31st May 2017 Kshs. 5,416,225/- was transferred to the 4th respondent’s bank Account No.0150xxxxxxxxxxx Equity Bank Mama Ngina Branch (marked IN- 19).

21. Further evidence revealed that between 9th February 2017 and 6th July 2017, Kshs. 56,077,538/- was unlawfully transferred from ICTA Account No. 3000xxxxxx to Account No. 0820xxxxxxxxxx Equity Bank Donholm in the name of MOD text Technologies and Office Solutions disguised in more than 20 different account names of existing SACCOS (annexture NI-20 bank statements)

22. On 18th January 2017, Kshs. 868,318/- was transferred from ICTA Citi Bank Account No. 3000xxxxxxxxx to Barclays Account No. 2351xxxxxxxx (IN- 21 copy of Barclays Bank Statements).

23. That upon interrogating the 1st respondent, he admitted receiving 4. 4m on his bank account on diverse dates for official use. (See annexture IN- 22 1st respondent’s statement). Upon interviewing the 2nd respondent, he allegedly confirmed that between 10th January 2017 and 6th July 2017 he authorized payments of Kshs. 78,019,230/- from Citi Bank ICTA Account No. 3000xxxxxxxx upon authorization by the 1st respondent for official use.

24. That the 2nd respondent also admitted receiving Kshs. 5,458,061 in his Co-operative Bank Account No. 0110xxxxxxxxx held at Upper Hill branch and Family Bank City Hall branch, Account City Bank 0160xxxxxxxx from ICTA Account No. 3000xxxxxxxx for payment of ICTA projects in hiring Motor Vehicles, purchasing fuel, travel allowance among other activities.

25. He further averred that the 3rd respondent Peter Mwangi admitted receiving on 24th January 2017 and 31st May 2017 Kshs 5,441,200 in Equity Bank Account No. 0020xxxxxxx and Account no. 0260xxxxxxxxx Kshs 5’441,210 from ICTA Account No. 3000xxxxxxxxx which he claimed was for payments for production, hiring of tents, public address system, bills on refreshments, payment of senior officers for digital learning program.

26. That the 3rd respondent admitted receiving cash from couriers namely G4S and Wells-Fargo which he handed over to the 4th respondent. It was further deponed that the 4th respondent received Kshs 80,000/- as petty cash way above the recommended maximum of Kshs 75,000 thus contravening cash withdrawal regulations yet he went ahead and received cash beyond Kshs. 80,000/- as petty cash. He further deponed that the 4th respondent conceded receiving Kshs. 5,416,225 in his bank Account No. 0150xxxxxxxxx Equity Bank Mama Ngina Branch from ICTA Account No. 3000xxxxxxx for official use in operational expenses like hiring taxis, sensitization and mobilization for digital learning program.

27. He went further to state that he interrogated the Program Managers one Thomas Oganga and Anthony Kinoti who were the in charge of ICTA projects among them; National Optic Fiber Back bone for infrastructure, County connectivity Project (CCP) and Digital Learning program who stated that there were no field projects undertaken as claimed by the 4th respondent hence the payments were unlawful.

28. It was further averred that Mr. Kinoti clarified on the procedure followed before a field tour could be initiated as:“a request had to be made to the CEO specifying the activity, period it will take, person assigned and amount required; A copy of the memo be sent to the Director, Corporate Services and CEO for approval; Memo forwarded to accounts office for voucher preparation and payment and then, payment made to the respective recipient bank account and no cash payment was ordered.

29. That one Mark Muriithi Mwangi, the Project Manager of County Connectivity denied that there were such projects to warrant payment of the amount claimed. That one Peter Githinji Kimaru the records assistant confirmed that only cash below 75,000/- could be collected from the bank and anything above could only be paid through the bank. That the summary payments given by the 3rd respondent which he claimed to have served as vouchers did not match summary payments records of ICTA Resource Management Systems.

1st Respondent’s response 30. Vide a replying affidavit sworn on 28th March 2019 and filed on 29th March 2019, the 1st respondent denied committing any acts of corruption or fraud and that a sum of Kshs. 384,402 received in his Account No. 01017xxxxxxxxx Standard Chartered Bank was from his salary. He further averred that he was facing several charges before the Magistrate’s court being Cr. C.No. 1/2019 and that any adverse finding in this case was likely to have a negative effect on his case.

31. He contended that he had not been found guilty of any wrong doing before any court of law hence cannot be condemned before found guilty.

2nd Respondent’s response 32. In opposition to the application, the second respondent filed a replying affidavit on 13th March 2019 denying the claim. Like the 1st respondent, he contended that he was facing criminal charges in respect of the same claim which is still pending hence the suit herein is premature as he is presumed innocent until proven guilty.

33. That the averments contained in the affidavits in support of the application are based on mere suspicion which cannot be authenticated without being subjected to cross examination. That the proceeds in his bank Account arose from his salary and not out of proceeds of crime nor money Laundering.

34. He further deponed that the application is misleading as it contains misleading statements and deliberate omissions of material facts. He therefore prayed for dismissal of the suit as the same is not founded on any material facts and that it is malicious.

3rd Respondent’s case 35. On his part, the 3rd respondent challenged the application through his replying affidavit sworn on 28th March 2019 and filed on 29th March 2019 reiterating the response of the 1st and 2nd respondent. He stated that he has since been charged together with the other respondents on ACCCR No. 1 of 2019 which is still pending touching on the same subject and that he was not guilty of any money laundering activities nor corrupt conduct.

4th Respondent’s response 36. Through his replying affidavit sworn on 28th March 2019 and filed on 29th March 2019, the 4th respondent denied the allegation of obtaining funds through corrupt conduct or money laundering. He also claimed that having been charged in a criminal case, he is innocent until proven guilty hence no claim over the same subject can lie against him.

37. When the matter came up for hearing on 28th March 2019, parties agreed to dispose of the same by way of written submissions. Consequently, the applicant filed theirs on 5th April 2019 and the 2nd respondent filed his on 6th May 2019. The 1st, 3rd and 4th respondents did not file their submissions. Parties highlighted on their submissions on 12th June 2019 and left it for the court to determine the matter.

Applicant’s submissions 38. M/s Gitili for the applicants basically reiterated the averments contained in their affidavit in support of the application. Counsel submitted on three issues namely;a)whether the monies in the bank are proceeds of crime.b)if issue (a) above is in the affirmative, whether the motor vehicle and the money in cash in the bank should be forfeited to the state?c)whether the pendency of criminal trial is a bar to forfeiture of proceeds of crime or a violation to the right to fair hearing.

39. It is the applicant’s submission that they have proved their case on a balance of probability and that there was sufficient evidence that the money received in the respondents’ accounts were proceeds of crime hence subject to forfeiture the same having been illegally withdrawn from ICTA account. That the withdrawal of funds in tranches of below Kshs. 500,000/- was calculated at avoiding the CEO who was supposed to approve and sign withdrawals beyond Kshs. 500,000/-.

40. Regarding whether the money the subject of these proceedings should be forfeited, counsel opined that the respondents did not fulfil or explain any legitimate source of income to justify retention of the money in their accounts. To support this position, counsel placed reliance in the case of Nguku v. Republic [1985]eKLR 412 where the court held that:-“Where a party fails to produce certain evidence, a presumption arises that the evidence produced, would be unfavorable to the party.”

41. She further contended that the burden to prove the source of the impugned money was with the respondents. To bolster that proposition, the court was referred to the case of Assets Recovery Agency vs. Rohan Anthony Fisher & Others Supreme Court of Jamaica, Claim No. 2007 H C V 003259 where the court held:-“… Even though these proceedings are quasi Criminal in nature there is an evidential burden of proof on the Defendant. It is incumbent on them to demonstrate evidentially how they lawfully came into possession of the assets seized ...”

42. Regarding whether the pendency of a criminal trial is a bar to forfeiture of proceeds of crime or violation to the right to fair hearing, counsel urged that criminal proceedings are independent of civil proceedings and that Section 92(4|) of POCAMLA provides that the validity of an order for forfeiture under Section 91(1) is not affected by the outcome of criminal proceedings or any investigations.

43. To fortify this argument, counsel relied on the holding in Kenya Anti-Corruption Commission vs. Stanley Mombo Amuti (2017)eKLR where the court held that a claim for civil recovery can be determined on the basis of conduct in relation to property without the identification of any particular unlawful conduct and that the plaintiff does not need to prove that the defendant actually committed an act of corruption in order to invoke the provision of the ACECA.

44. Further reference was made in respect to the case of Teckla Nandjila Lameck vs President of Namibia 2012 (1) NR 255 (HC) and Martin Shalli vs. Attorney General of Namibia and Others High Court of Namibia Case No. POCA 9 of 2011 where both courts emphasized that civil proceedings relating to forfeiture of assets have no bearing to what happens in criminal proceedings.

2nd respondent’s submissions 45. Through the firm of Oyatta and Company Advocates the second respondent filed his submissions on 6th May 2019. Counsel reiterated their response in the replying affidavit. He further contended that the respondent has not been found guilty of any criminal conduct hence the proceedings cannot stand.

46. Counsel contended that; there was no proof that the money in the respondent’s account was as a result of proceeds of crime; the respondent has demonstrated that the money was proceeds from legitimate business enterprise and salary and that, the 4th respondent is the Director Stedon Ltd who owns X-trail motor vehicle No. KBY---Y.

47. Learned counsel opined that the applicant must prove the link between the money in question and the alleged corrupt conduct. He distinguished the facts in Assets Recovery Agency vs. Rehan Anthony Fisher Jamaica Supreme Court with the facts in this case urging that in the Jamaican Case there was proof of corrupt conduct as some US$1,300,300 related to drug trafficking was found hidden in a Freezer Compartment.

48. That the burden of proof was with the applicant under Section 92 of POCAMLA to prove that the money was obtained unlawfully. That the applicant has not controverted the respondent’s evidence rendered before the DCI which evidence the applicant relied on as their evidence. Counsel further stated that the 2nd respondent had no power to approve payments or withdrawals.

49. Mr. Oyatta contended that there is no prima facie case established to warrant the conclusion that the money so preserved was as a result of a crime and the proceeds in question is not proportionate to the 2nd respondent’s legitimate earnings. To support this proposition learned counsel relied on the decision in the case of Ethics and Anti-Corruption Commission vs. Ministry of Medical Services and another (2012)eKLR where the court stated that before a court grants a preservation order, a prima facie case must be presented before court that the property in question has been the subject of corrupt dealings.

50. Mr. Oyatta submitted that the affidavits and statements relied on were not proved by way of oral evidence contrary to the law. To support this assertion counsel relied on the case of Bungoma H.C. Election Petition No. 2 of 2013 Moses Wanjala Lukoye vs Bernard Alfred Wekesa Sambu & Others where the court held that an affidavit of a person who has not been call to cross examination is worthless evidence unless produced by consent. Further reliance was placed on the case of Bukenya v Uganda (1972)EA 549 where the court held that prosecution must make available all witness necessary to prove the truth. Learned counsel asserted that, to make a determination in this case before the criminal case will be tantamount to proving the 2nd respondent guilty before the trial court finds him guilty.

51. Learned Counsel further contended that the applicant largely relied on bank statements which under Section 176 and 177 of the Evidence Act cannot be received as a prima facie evidence without sufficient proof to corroborate the allegations of the investigating officer.

52. Lastly, counsel submitted that, the orders of forfeiture cannot issue where orders of preservation can serve the same purpose. That to forfeit one’s property will amount to infringement to one’s right to own property contrary to Article 40 of the Constitution.

Analysis and Determination 53. I have considered the application herein, affidavits in support, responses thereto and submissions by the applicant and the 2nd respondent. Issues that crystalize for consideration are;a)whether the suit herein is properly filed before this court;b)whether forfeiture orders can issue while preservation orders are in place.c)whether forfeiture proceedings can be instituted before the pending criminal proceedings over the same subject are concluded;d)whether the applicant has proved to the required standards that the amounts preserved constitutes proceeds of crime.

Whether the suit herein is properly filed before this court 54. As stated earlier, preceding the inception of this forfeiture proceeding was an application dated 30th July 2018 filed pursuant to Sections 81, 82 and 83 seeking preservation orders. In particular, Section 82 which directly deals with issuance of preservation orders provides:-“(1) The Agency Director may, by way of an ex parte application apply to the court for an order prohibiting any person, subject to such conditions and exceptions as may be specified in the order, from dealing in any manner with any property.(2) The court shall make an order under subsection (1) if there are reasonable grounds to believe that the property concerned—(a)has been used or is intended for use in the commission of an offence; or(b)is proceeds of crime.” 55. Subsequent to issuance of such orders, the same are gazetted and have a live span of 90 days pursuant to Section 83 of POCAMLA. However, Section 89 provides room for variation and rescission of the orders. An applicant can seek variation if he satisfies the court that the operation of the order would deprive him the means to provide for his reasonable living expenses and cause undue hardship for the applicant and that the hardship he will suffer as a result of the order outweighs the risk that the property concerned may be destroyed, lost, damaged, concealed or transferred.

56. Section 90 of POCAMLA goes further to provide;“Sub-Section (1) - If a preservation order is in force, the Agency Director may apply to the High Court for an order forfeiting to the Government all or any of the property that is subject to the preservation order.”

57. It is not in dispute that preservation orders were obtained, duly gazetted and served upon the respondents. It is also not in dispute that the preservation orders were not varied nor rescinded implying that they were properly issued preceding institution of forfeiture proceedings. It is therefore clear that the forfeiture proceedings are properly before this court and the claim by the respondents and more particularly the 2nd respondent in his submissions that the preservation orders were irregularly issued does not hold any water. That subject is therefore spent as the orders were not successfully challenged as provided for under Section 89 of POCAMLA.

Whether forfeiture orders can issue while preservation orders are in place 58. Mr. Oyatta submitted that forfeiture orders cannot issue while preservation orders are in place. My reading of Sections 82, 83 and 90 of POCAMLA is that those proceedings are distinct but independent of each other and therefore serve different purposes. Whereas a preservation order is temporary pending the outcome of forfeiture proceedings, forfeiture proceedings and its outcome are final in nature. Therefore, the two cannot substitute each other. As to whether the forfeiture proceedings would amount to infringement to the respondents’ constitutional rights on the right to own property, the same right does not protect illegally acquired property hence it is not absolute.

Whether forfeiture proceedings can be instituted before conclusion of criminal proceedings against the respondents 59. It is a common argument by all the respondents that they are facing criminal proceedings being ACCR No. 1 of 2019 before Milimani Anti-Corruption Court relating to loss of the same funds. In their view, they cannot be subjected to double jeopardy by answering to two sets of proceedings both before the criminal and civil court. According to them, they are innocent until proven guilty and that institution of civil proceedings before conclusion of criminal proceedings presupposes that they are guilty hence a violation of the principles of natural justice that they are innocent until proved guilty.

60. Mr. Oyatta extensively dwelt on this ground to strongly oppose these proceedings insisting that the criminal proceedings must be concluded first and that the outcome in this case is likely to influence the finding in the criminal court thus prejudicing accused’s right to a fair trial. It is trite law that criminal and civil proceedings can proceed concurrently and none will affect the other. The threshold is different. For a criminal court to convict, the case must be proved beyond reasonable doubt while in the civil proceedings it is on a balance of probability.

61. The outcome in this case has nothing to do with the outcome in the criminal proceedings. An answer to this issue can also be found in Section 193A of the CPCwhich provides:-“Notwithstanding the provisions of any other written law, the fact that any matter in issue in any criminal proceedings is also directly or substantially in issue in any pending civil proceedings shall not be a ground for any stay, prohibition or delay of the criminal proceedings.”

62. Further, Section 92(4) of POCAMLA is clear on the subject of concurrent criminal and civil proceedings. It provides as follows:-“(4) The validity of an order under sub-section(1) is not affected by the outcome of criminal proceedings, or of an investigation with a view to institute such proceedings, in respect of an offence with which the property concerned is in some way associated’’

63. Besides the above statutory provisions, various case law decisions have sufficiently addressed that issue. In the case of Stanley Mombo Amuti vs. Kenya Anti-Corruption Commission Civil Appeal No. 184/2018 C.A. Nairobi the Court of Appeal had this to say at paragraph 78:-“The concept of “unexplained assets” and its forfeiture under Sections 26 and 55 (2) of ACECA is neither founded on criminal proceedings nor conviction for a criminal offence or economic crime …”

64. Similar position was held in the case of Assets Recovery Agency vs. Quorandum Ltd and Ezekiel Otieno Owuor and Duchess Park Development Company Ltd (Interested Party) Misc. Application No. 4/2017 Nairobi where the court stated that:-“Simply put civil forfeiture proceedings are not subject to presumption of innocence which is a criminal law phenomenon.”See also Serious Organized Crime Agency vs. Gale as cited in the case of Assets Recovery Agency and Others vs. Audrene Samantha Rowe & Others Civil Division Claim No. 2012 HCV 02120 where the Court of Appeal held:-“….that in deciding whether the matters alleged constituted unlawful conduct when a civil recovery order is being made is to be decided on a balance of probability. Civil recovery proceedings are directed at the seizure of property and not the conviction of any individual and thus there was no reason to apply the criminal standard of proof …”

65. Guided by the above statutory provision and case law, I do not find any prejudice in the forfeiture proceedings being prosecuted at the same time with criminal proceedings as the standard of proof is different and that forfeiture proceedings are not dependent upon investigation, prosecution or outcome of any criminal proceedings. Forfeiture proceedings can be either conviction or non-conviction based.Whether the applicant has proved its case to the standard required and whether the amount preserved constitutes proceeds of crime.

66. The applicant’s case is purely pegged on the allegation that the respondents unlawfully withdrew funds from ICTA without proper authorization, utilized the withdrawn amount for their own use and that they flouted withdrawal of cash (funds) requirements. According to the applicants, sometime 20th July 2017, they received information from the CEO ICTA Mr. Robert Mugo who had suspected theft and fraud of funds amounting to Kshs. 74,281,498. That the suspicion was raised by the Citi bank manager one Wachuka who had noticed unusual frequent funds withdrawals in the tranches of less than Kshs. 500,000/- only.

67. Upon further scrutiny of the accounts financial report (Annex. IN 8A) pursuant to the ICTA Board resolution minutes (IN-4A and B), the CEO, 1st and 2nd respondents were signatories. Any withdrawal of funds from its accounts, exceeding Kshs. 500,000/- only the ACEO (CEO) Robert Mugo and Director Corporate Services (1st respondent) were authorized. For funds below Kshs. 500,000/- the acting Finance Manager (2nd respondent) would approve and sign with any of the other two signatories.

68. From the averments contained in the affidavit of Isaac Nakitare, all questionable withdrawals of Kshs. 500,000/- and below were approved and authorized by the 1st and 2nd respondents without the knowledge of the CEO allegedly with the intention of deliberately avoiding him.

69. Was there anything irregular in withdrawing funds below Kshs. 500,000/-? From the board resolutions, the 1st and 2nd respondents had powers to approve and authorize payment of sums below Kshs. 500,000/-. Therefore, there was nothing wrong with the figure Kshs. 500,000/- perse. What is in issue is whether the withdrawal was lawful and whether the money was spent for official purpose.

70. According to the investigating officer, a sum of Kshs. 155,538,192 was approved by the 1st and 2nd respondents and withdrawn by the 3rd and 4th respondents and some of the funds ended up in the respondents’ accounts without being accounted for. A perusal of the auditor’s report dated 23rd January 2018 (annexture IN-10A) revealed that between 8th January 2016 and 22nd December 2016 Kshs. 18,450,780 was withdrawn and delivered to the 3rd and 4th respondents.

71. That on 8th December and 22nd December 2016 Kshs. 3,454,946 was paid to the respondents and the other staff for training and field inspections which was suspicious because per diem paid was the same despite differences in seniority of various staff. According to the auditor’s report (IN-10B) Kshs 7,134,285 was transferred from Account No. 3000xxxxxxxxxx to Account No. 0820xxxxxxxxxx held at Equity Bank Kikuyu and Donholm Branches held in the names of Housez Rent Sacco and Jaribu Credit Traders Ltd an act he termed as irregular as an Account cannot bear two names or two account holders.

72. At paragraph 25 of his affidavit Nakitare averred that, between 24th January 2017 and 6th March 2017 Kshs. 20,801,106 was unlawfully transferred from ICTA bank account No. 3000xxxxxxxx and transferred to the respondents’ bank accounts.a)Kshs. 4,485,620 to the 1st respondent’s bank Accounts No. 0101xxxxxxxxx Standard Chartered bank (Ex. IN- 14 bank statement of the 1st respondent).b)Between 24th November 2017 and 31st August 2017 Kshs. 4,920,173 was transferred from ICTA Account to the 2nd respondent’s Account NO. 0110xxxxxxxxxxx held at Co-op Upper Hill (see IN-15).c)Between 24th January 2017 and 27th April 2018 Kshs. 497,888 was transferred to the 2nd respondent’s Account 0160xxxxxxxxxx held at Family bank (see annexture IN-16 2nd respondent’s bank statement)d)Between 24th January 2017 and 31st June 2017 Kshs. 990,120 to 3rd respondent account No. 0020xxxxxxxxx Equity Four Way Branch (IN-17 bank statements)e)Between 24th January 2017 and 31st May 2017 Kshs. 4,451,090 transferred to the 3rd respondents Account No. 0280xxxxxxxxxx Equity Bank (IN-18 bank statement)f)Between 24th January 2017 and 31st May 2017 Kshs. 5,416,225 transferred to 4th respondents Account Equity Bank (IN-19 bank statements).

73. It is the contention of the investigating officer that there was no proof that the said amount was spent for any known official purpose. All that the applicant needs to prove is that the respondents either authorized or withdrew the said amount but failed to justify how the money was spent. The applicant does not need to go beyond withdrawal and expenditure which is not accounted for. It is upon the respondents to give a proper account how they spent the money they withdrew from their employer’s accounts which they do not deny having withdrawn and received.

74. In their respective responses they did not deny authorizing or withdrawing the monies as alleged. They generally denied any wrongdoing. They did not give any evidence to prove how the monies they were entrusted with was spent. From the various bank statements attached as exhibits, it is clear there were several withdrawals from ICTA bank accounts and money transferred to their respective bank accounts which they do not deny.

75. The respondents have not rebutted or controverted the averments contained in the affidavit of the investigator that they received money from ICTA’s accounts to their accounts but have failed to account for the money. From their bank statements attached by the applicant, it is apparent that the respondents did receive various amounts of money from ICTA. The burden of prove that the money was obtained by the respondents unlawfully or lawfully but unlawfully spent lies with the applicants (see Kenya Anti-Corruption Commission vs. Stanley Mombo Amuti Anti-Corruption and Economic CrimesCourt Misc. Application No. 5 of 2016 High Court Nairobi (2017)eKLR where the court held that; “the burden of proof lies with the plaintiff herein to prove the allegations that the respondent has un-explained assets and proof is above a balance of probability’’

76. The applicant having produced bank statements that the respondents withdrew money from ICTA, the burden shifted from the applicants to the respondents to explain why they withdrew and how they spent the money. On their part they casually denied any wrong doing. They did not offer any explanation how the money was spent. They did not even deny receiving the money. They only claimed that the applicant did not call witnesses to prove that they had committed a crime.

77. It is trite that an Originating Summons can be prosecuted and or proved by way of affidavit evidence and submissions unless parties elect to call witnesses for oral evidence and cross examination. In this case, parties agreed by consent to rely on the affidavits and submissions to dispose the matter. The 1st, 3rd and 4th did not file any submissions. They cannot turn round and state that witnesses were not called. They should have requested to cross examine deponents of various affidavits to determine the veracity of their averments.

78. They should have called for production of documents or request for discovery. The duty of this court is to determine whether money was withdrawn and spent for the intended purpose. Before court there is no proof that the money was withdrawn for a specific purpose. For the respondents to claim that witnesses were not called to testify to prove the allegation of corrupt conduct is not tenable.

79. Since the respondents have not sufficiently rebutted the applicant’s evidence, the only logical conclusion is that they have failed to discharge their burden of proof. Unlike criminal cases where the burden does not shift, in civil cases it shifts. It is my finding that the applicants have proved that the respondents have not accounted for the money received from their employer’s accounts.

Whether the money was out of proceeds of crime 80. The question which begs for an answer is whether the money transferred to the respondents’ accounts amounts to proceeds of crime. Section 2 of POCAMLA defines proceeds of crime as follows;“any property or economic advantage derived or realized, directly or indirectly, as a result of or in connection with an offence irrespective of the identity of the offender and includes, on a proportional basis, property into which any property derived or realized directly from the offence was later successively converted, transformed or intermingled, as well as income, capital or other economic gains or benefits derived or realized from such property from the time the offence was committed.”

81. Does the money received in the respondents’ accounts from their employer ICTA which is not accounted for, amount to proceeds of crime? Which crime accrues from non-accountability of the employer’s money? Obviously, two sets of crime are bound to arise from the facts namely; stealing by servant or abuse of office.

82. The allegation by the respondents that they are innocent until proven guilty does not discharge their responsibility to account for the money received from their employer’s accounts. The claim by the 1st and 4th respondents that money in their accounts was out of their salary, or proceeds of legitimate sources from business alone is not substantiated. It is clear there were monies credited to their accounts from ICTA which is not denied nor any explanation given on how that money was spent. The fact that unlawfully acquired proceeds or lawfully received amount of money but unlawfully spent is mixed with genuine money e,g salary, does cleanse the illicit money. The court will be able to retrieve the amount equal to the value of illicit money in the account. In the circumstances of this case, what was traced is even less what was acquired.

83. Having considered the evidence presented before this court by the applicant which is not challenged, I am satisfied that the applicant has proven its case on a balance of probability and Judgment entered in their favour with orders declaring that the amounts listed herein against the respective bank accounts be and is hereby declared as proceeds of crime and liable to forfeiture to the state as follows;a)A sum of Kshs. 384,402/- held in account No. 0101xxxxxxxxx at Standard Chartered Bank, Kenyatta Avenue Branch, in the name of Felix Obonsi Ongaga be and is hereby forfeited to the state.b)A sum of Kshs. 289,544. 62 held in account No. 0110xxxxxxx at Co-operative Bank Upper Hill Branch in the name of the 2nd respondent Daniel Stephen Ouma be and is hereby forfeited to the state.c.A sum of Kshs. 190,861 held in account No. 0160xxxxxxx at Family Bank, Nairobi City Hall Branch in the name of the 2nd respondent, Daniel Stephen Ouma be and is hereby forfeited to the state.d.A sum of Kshs 4,828,114. 80 held in account No. 0260xxxxxxxx at Equity Bank, Kimathi Street branch in the name of the 3rd respondent Peter Mukangu Mwangi be and is hereby forfeited to the State.e.Kshs. 32,392. 50 held in account No. 0020xxxxxxx at Equity Bank, Four Ways Branch in the name of the 3rd respondent Peter Mukangu Mwangi be and is hereby forfeited to the State.f.Kshs. 763,294. 49 held in account No. 0150xxxxxxxxx at Equity Bank Mama Ngina Branch in the name of the 4th Respondent Anthony Nyaga Mwangi be forfeited to the State.g.That the amount forfeited to the Government to be transferred to the Criminal Assets Recovery Fund.h.Costs of this suit be and is hereby awarded to the applicants to be shared equally amongst the respondents.Right of Appeal thirty (30) days.

DATED, DELIVERED AND SIGNED IN OPEN COURT AT NAIROBI THIS 16TH DAY OF FEBRUARY, 2020. J. N. ONYIEGOJUDGE