Inside Ksh460 million prisons swindle

Written by on 22 April 2022

Unscrupulous officials at Kenya Prisons siphoned close to half a billion shillings of taxpayers’ money through fictitious tenders for food supplies to eight correctional facilities.

In an intricate web exposed by Ethics and Anti-Corruption Commission officers, the scam also entailed a junior staff opening seven briefcase companies to embezzle over Sh257 million from seven prisons within Nairobi.

Now EACC sleuths have exposed how the officials amassed millions from their employer through irregular payment of Sh460 million through fictitious contracts for the supply of food rations.

Eighteen companies owned by four people, one of whom is senior support staff at the State Department of Correctional Services, were paid millions of shillings for “supplies” to Langata Women Prison, Kamiti Medium Security Prison, Nairobi West Prison, Nairobi Remand Prison, Kamiti Main Prison, Kamiti Youth Correctional Training Centre (YCTC) and BorstaI Institution, and Nairobi Medium Prison. But nothing was delivered.

Abetting corruption

EACC finalised its investigations by November 2021 and forwarded its report to the Director of Public Prosecution, Nordin Haji. Its recommendations were that the accused be charged — alongside the 18 companies and their directors — with abetting corruption, abuse of office, acquisition of public property and fraudulent payment from public revenue for fictitious goods.

The DPP, however, recommended further investigations. According to EACC chief executive officer Twalib Mbarak, the seven prisons never made any request for the supplies but the companies were paid a total of Sh450,138,000. Seven of the companies are owned by Eric Kipkirui Mutai, an employee in the Department since 2009.

He reportedly received Sh257,220,500, which he spent on prime land in Nairobi, Kericho and Kisii counties through proxies, relatives and fellow employees. Kipkurui, 40, is from Kipkelyon village in Kericho County. In 2017, he was employed as senior support staff at Correction Services Department, based at the procurement section in Teleposta Towers, Nairobi.

“Following analysis of Sh257,220,500 received by Eric through his firms, it was established that Sh133,934,983 was withdrawn from bank accounts for unspecified purposes. Some of the monies were used to purchase properties for Eric and his associates,” says EACC.

The official disguised himself as a supplier, with the support of colleagues, to benefit himself and a colleague, Moses Sirengo.

The anti-graft body wants him charged with the crimes as it begins to recover the properties acquired. Lady Justice Esther Maina of the High Court’s Anti-Corruption and Economic Crimes Division has granted orders sought by EACC freezing three properties and seven motor vehicles purchased by one of the suspects for Sh57 million and Sh30,598,300, respectively, from Kipkurui.

Between 2013 and February 24, 2016, Kipkirui registered Homex Logistics Enterprise to deal with vegetables and groceries, Hygienic Ventures to deal with hair products and sanitary products, Facton Logistics Enterprise to offer consulting services on constitutional law, Unique Supply (groceries), Nerimas General Agencies, Trechris Investments and White Unicorn Limited.

F a c t o n r e c e i v e d Sh13,200,000—Sh3 million from Nairobi Remand; Kamiti Main Prison (Sh6.2 million); Nairobi West Prison (Sh2 million); and Langata Women’s (Sh1.6 million). Homex Logistics got Sh62 million while Kamiti Main Prison paid Sh12.4 million; Kamiti Medium (Sh5.32 million); Kamiti YCTC (Sh10.2 million); Langata Women’s (Sh16.98 million); Nairobi Medium (Sh4.34 million); Nairobi Remand (Sh6.9 million); while Nairobi West Prison paid Sh6.3 million.

There were no local purchase orders, nor inspection and acceptance committee certificates, in the payment vouchers collected by Kipkurui or John Odipo. None of the deliveries was recorded in prison books. Also, the delivery notes had no name of the receiving officer and none of the payments was charged in the vote books.

After receiving the payments, Homex Logistics paid Sh10 million to DT Dobie and CO.KE Ltd for a car, while Mathew Kiriago Akama received Sh15 million for the purchase of Nyaribari Chache/ B/B/Boburia/9927 parcels 51821 and 51822.

These were registered under Stephen Jeremiah Ogeto, who is Kipkurui’s colleague, who then issued instructions for the transfer of the property to a third party. Some Sh5 million was paid to Ephraim Wanjohi and Wanjohi Mary as partial payment for land bought at Sh17.5 million through a colleague, Joseph Ochoki Omayio, and Sh6 million for a car. Also, an accountant at the State Department got Sh800,000 from Josil Supplies after it received Sh2 million for fictitious supplies.

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