Financial Crime World

Kenya’s Tangled Web of Financial Crimes: A Look at Notable Cases and Legal Frameworks

Introduction

Corruption and financial crimes continue to pose significant challenges to Kenya’s economic growth and development. According to a 2020 survey, 58% of Kenyans reported experiencing some form of economic crime in the last two years. Common offenses include tax fraud, procurement fraud, money laundering, cybercrime, asset misappropriation, and bribery and corruption. In the Corruption Perceptions Index 2020, Kenya ranked 124th out of 180 countries.

The Ethics and Anti-Corruption Commission Act, 2011 (EACCA), established the Ethics and Anti-Corruption Commission (EACC), the Anti-Corruption Police Unit, and the Central Bank of Kenya Act, among other measures. The EACCA was first applied successfully in 2008, leading to the recovery of an estimated USD 6.4 million in five consequent cases. Some key provisions of the EACCA include:

  • Unwanted Wealth and Forfeiture provision (Section 55)
  • Powers to inspect and search premises
  • Investigative and prosecutorial functions

Inconsistencies and Controversies

The constitutionality of the EACCA’s Unwanted Wealth and Forfeiture provision (Section 55) came under scrutiny in the landmark case of Stanley Mombo Amuti vs. KACC (Kenya Anti-Corruption Commission). The provision was initially found inconsistent with the Constitution in 2019 but this dismissal was later overturned at the Court of Appeal. Section 55 creates a presumption of corruption and places the burden of proof on respondents to explain their property’s lawful origin. This dilemma has sparked debates regarding violation of the fair trial and presumption of innocence.

Success Stories

One significant win came in the case of EACC vs. Patrick Ochieno Abachi, where the High Court ordered the confiscation of several bank accounts, properties, and plots of land as part of civil unexplained wealth recovery proceedings. These proceedings can serve as an effective tool in targeting assets gained illicitly through corruption.

Infamous Corruption Scandals

One devastating blow to Kenya’s fight against financial crime was the Goldenberg Scandal, which involved high-level corruption within the Kenyan government under the late Daniel Arap Moi. The government subsidized gold exports beyond standard arrangements by overpaying an exporting company, Goldenberg International, with 35% more of Kenya’s currency than their foreign currency earnings. Estimated losses exceeded 10% of the country’s annual Gross Domestic Product. A significant portion of these proceeds has yet to be recovered.

Current Developments

Recent investigations and trials have linked three governors and a sitting County Boss to unexplained wealth totaling Sh 11 Billion (approximately USD 104 million). These cases are crucial in the ongoing battle against economic crime, as judicial bodies and anti-corruption agencies continue to refine their skills in identifying and prosecuting these offenses.

Conclusion

Kenya’s journey against financial crime and corruption is a complex dance, filled with legal challenges, victories, and ongoing investigations. The nation’s commitment to combatting these maladies is evident, with several significant cases and high-profile prosecutions underway. By fostering a culture of transparency, accountability, and dedication, Kenya can continue its progress towards a more prosperous and corruption-free future.