Court raises red flag over asset recovery billions

Fearing that money forfeited to the government might end up in the wrong hands while being held at a bank account run by the Assets Recovery Agency (ARA), a judge has ordered the Treasury to expedite procedures to operationalize the Criminal Recovery Fund.
The millions of shillings that are saved and then forfeited to the government each year wind up in a KCB bank account, not the Consolidated Fund, according to High Court judge Nixon Sifuna.
Depositing the money with the State agency is a grave omission and an abnormality, according to Justice Sifuna.
Because all of these prior forfeitures cannot be linked to the Consolidated Fund, the judge stated that they are “like proverbial low-lying fruits susceptible to larceny by those with an affinity and appetite to the theft of public funds.”
The judge instructed Cabinet Secretary Treasury Njuguna Ndung’u to expedite the regulations’ submission to Parliament for approval in order to launch the Criminal Recovery Fund.
He stated that a status report should be submitted to the court inside of six months.
The instruction was given by Justice Sifuna in November 2021 when he ordered the forfeiture of $28,000 (or around Ksh3.9 million) that had been recovered from Nigerian Peter Oluwafemi Olaiwon.
The Nigerian was convicted on two charges of money laundering and is now serving a three-year prison sentence at Industrial Area Prison.
The Chief Executive Officer of the ARA was given a directive by Justice Sifuna to make sure the funds, which had been kept in escrow at the KCB bank account since 2021, are transferred to the Treasury within seven days of the date of the ruling and to provide an affidavit attesting to the transfer.
“All monies that courts order to be forfeited to the government shall be paid into the National Treasury in the interim between now and the time the said Fund is operationalized,” Prof. Sifuna continued.
After the owner has exhausted all appeals, the agency can only transfer the money that has been forfeited to the State, according to the source.
To ensure that these gaps are closed and that the money, assets, and properties forfeited to the government are protected and kept from future corruption, misappropriation, or money laundering, Justice Sifuna stated that measures must be put in place.
The judge additionally ordered the agency to provide the Auditor-General with a report that lists all of the funds, assets, and property that it is currently holding pursuant to preservation and forfeiture orders, along with specifics on each item.
Additionally, section 113 requires the Treasury CS to publish regulations that will make the Fund operative. The judge noted that the CS has not yet sent any regulations to Parliament for approval.
“This court, as the anti-corruption court, cannot ignore its duty to protect public resources and public funds, such as the cash, assets, and property that it frequently orders forfeit to the government,” he stated.
The judge questioned what happened to the interest accrued prior to forfeiture and whether the money were subject to audits by the Auditor General or oversight reports from Parliament.
In the Oluwafemi case, the money was transported from South Carolina, USA, and was hidden in a jacket.
The money is thought to be the proceeds of crime, according to the ARA, given that the Nigerian immigrated to Kenya in October 2021.
When he went to the City Square post office to pick up the suitcase—which had been covered with clothing and books to hide the cash—he was detained.
He visited Kenya in October 2021, according to evidence shown in court. A month later, in November, Linda Dye, who was allegedly his mother’s sister, gave him a package from South Carolina. Six books, seven T-shirts, and one jacket were included in the package.
The agency testified before the court that the Nigerian was Linda Dye’s accomplice and that there was a good chance he was involved in a money-laundering operation.
However, Mr. Oluwafemi said that considering his youth, MS Dye donated the money to him in good faith in order to assist him in making investments and providing for his family.
The money was transferred to him in a parcel because he didn’t have a bank account in Kenya, and he claimed Ms. Dye had no criminal history in the US. He stated that he had been in the nation for roughly 35 days.
The prisoner responded that he wanted to open a hotel in Eastleigh, Nairobi, when asked why the money was transported to Kenya rather than Nigeria.
The judge deemed Mr. Oluwafemi’s response to be unhelpful and left more questions than it did answers.
The judge stated, “He has failed to persuade this court to believe him. The evidence he has offered for his claims is highly doubtful and unconvincing.”
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