BY SAM ALFAN.
A payments solution firm has lost over Sh63 million to the State after the High Court declared the funds as proceeds of crime.
High Court Judge Francis Gikonyo ruled that the funds held at Equity Bank belonging to Virtual Financials International limited, were illicit funds and should be forfeited to the State.
The court ordered the funds, in Kenya Shillings and Us dollars, be transferred the Assets Recovery Agency (ARA) forthwith.
“The sum of Sh60,789,500.05 held in account at Equity bank limited, in the name of Financials International Limited are proceeds of crime and is therefore, forfeited to the State,” ruled the judge.
The judge said forfeiture of proceeds of crime extends to all assets, actual assets stolen to related assets.
“This court is satisfied that the applicant (ARA) has proved on a balance of probabilities that the money in the Respondent’s accounts Nos. 133026223…, and 133026223…. Equity Bank Limited are proceeds of crime as defined in Section 2 of the Proceeds of Crime and Anti- Money Laundering Act,” said the judge.
Judge Gikonyo said Virtual Financials International ltd cannot claim infringement of property rights after the agency proved that the funds were proceeds of crime.
The judge noted it is also apparent from the documents provided that the registered offices for the respondent and Virtual Pay International Limited are located at Westlands in Nairobi.
“It is not strange in money laundering, that the perpetrators register too many companies in different jurisdictions with the sole aim of using the corporate vehicle to launder money, conceal the illicit source of the money by staking the deposits as payments from registered companies,” said Judge Gikonyo.
He added that the mere fact that a payment is received from a registered company does not make the source of the money legitimate.
He said the companies being licensed did not explain the sources of the monies paid by the related companies to be legitimate.
“The evidence by the Asset Agency Recovery show that these related companies were channels for, designed to create a complex web to throw the investigator and the court off the tangent for money laundering into a belief that it was legitimate payment from a registered and licensed company. These explanations by the respondent, do not show the source of the funds in question were legitimate,” said the judge.
The judge added that the payments constitute huge suspicious funds coming to the company which in law, bears the obligation to explain the source of the funds.
ARA stated that the schemes employed by the firm were money laundering design as loan agreements as well as consultancy agreements between the related companies were simply used to conceal the source.
It was noted that David Obangi was the majority shareholder in most of the companies.
The judge said perpetrators of money laundering schemes feign strict adherence to regulations to avoid detection and also make a case of legitimacy of their business or source of funds through formal licensing.
“But, the lie is in the pretense; dig, dig and dig deeper, and you will reveal the real purport of the corporation as is the case here,” observed the judge.
The Agency documents filed before Anti-Corruption court stated that they were tipped on 10th of May that the two Bank accounts were holding money suspected to be proceeds of criminal activities and money laundering.
Financial investigations were conducted by the agency later revealed complex fraud and money laundering schemes conducted by Virtual Financials International ltd , it’s directors and associates rendering the said funds proceeds of crime liable for preservation and forfeiture.
“The said Bank accounts received suspicious huge cash deposits from various suspicious sources and investigations established that there are reasonable grounds to believe that the funds in the issue are obtained through illegitimate means,” ARA told Anti-Corruption court judge.
The court was informed that the investigations further established that Virtual Financials International ltd was involved in a complex scheme of money laundering designed to conceal, disguise the nature, source of disposition and movement of the illicit funds.
