Nakumatts Woes, The Money Laundering Connection WikiLeaks.....

This is old news but quite interesting…

Kenya Stockholm Blog
[SIZE=6]WikiLeaks Releases: Nairobi Cable No. 23: Money Laundering at Charterhouse Bank[/SIZE]
https://secure.gravatar.com/avatar/f2fbb0dbbeea33b00a886714b0ea43e9?s=24&d=identicon makozewe
6 years ago
[SIZE=5]Viewing cable 06NAIROBI3217, CHARTERHOUSE WHISTLEBLOWER DETAILS MONEY LAUNDERING[/SIZE]
[ul]
[li]MPs, John Mau and Kabogo Involved[/li][li]Nakumat Group of comapnies major conduits[/li][li]Laundered money funded Narc’s 2005 Referendum campaign[/li][/ul]

VZCZCXYZ0000
OO RUEHWEB

DE RUEHNR #3217/01 2070251
ZNY CCCCC ZZH
O 260251Z JUL 06
FM AMEMBASSY NAIROBI
TO RUEAWJF/HQ DHS WASHDC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHDC IMMEDIATE
RUEHC/SECSTATE WASHDC IMMEDIATE 3228
INFO RUEHXR/RWANDA COLLECTIVE PRIORITY
RUCNFB/FBI WASH DC PRIORITY

C O N F I D E N T I A L NAIROBI 003217

SIPDIS

SIPDIS

TREASURY PASS TO FINCEN

E.O. 12958: DECL: 07/25/2026
TAGS: KCOR KCRM PREF ECON EFIN KE TZ UG
SUBJECT: CHARTERHOUSE WHISTLEBLOWER DETAILS MONEY
LAUNDERING AND TAX EVASION AND REQUESTS REFUGE IN U.S.

REF: A. A. NAIROBI 2870

¶B. B. NAIROBI 2482
¶C. C. NAIROBI 1688
¶D. D. NAIROBI 1614

Classified By: Charge John F. Hoover for reasons 1.4 (B) and (D)

[I]https://kenyastockholm.files.wordpress.com/2011/03/mwaupix.jpg[/I]
[I]Mwau: Cables say he is involved in money loundering through Nakumat

[B]¶1. (C) Summary: Kenyan auditor Peter Odhiambo exposed billions of shillings of tax evasion and money laundering at his former employer, Charterhouse Bank, by a group of major companies partly owned by notorious businessman John Mwau and MP William Kabogo. On July 20, Odhiambo briefed Emboffs on the details of the scam, and explained he had experienced death threats and a frightening attempt by some policemen to serve him with a bogus warrant.

Because the people implicated in the scandal are dangerous and appear to have bought influence and protection from the GOK, Odhiambo requested refuge in the U.S. Refugee Officer is prepared to write an Embassy referral for Odhiambo to DHS for processing his application for refugee status, and DHS is willing to interview him. End summary.[/B]

Money Laundering and Tax Evasion at Charterhouse Bank

¶2. (C) Peter Odhiambo met with PolOff and EconOff on July 20 to describe his role in exposing massive money laundering and tax evasion by the Nakumatt Group of companies. (See reftels for more details.) Odhiambo moved from Barclays Bank to Charterhouse in May 2003 as the internal auditor.

Within two months, he noticed suspicious transactions in accounts lacking the customer identification information required by the Central Bank of Kenya,s (CBK) &Know Your Customer8 regulations. Some accounts also appeared to violate CBK prudential limits on loans and liquidity.

Charterhouse concealed the violations by manipulating the figures just before the end of the month submissions were compiled, or before visits from external or CBK auditors, and then reverted the figures immediately afterwards. The General Manager told Odhiambo not to write down anything about the suspicious accounts in any report the CBK auditors might see.

¶3. (C) Odhiambo examined the suspicious accounts and found many personal savings accounts with (annual?) turnovers in excess of Ksh2 billion ($27 million). The transactions records showed funds were being diverted from Nakumatt Supermarket and related firms into various personal savings accounts, presumably to avoid taxes by under-declaring revenues to the Kenya Revenue Authority (KRA).

In May 2004, Odhiambo collected the information on 85 accounts with annual turnover of about Ksh20 billion ($270 million) and presented it to the KRA, which promised strict confidentiality to protect him. KRA however, took no action, and did not give Odhiambo the 1% reward its newspaper ads promised to informants who revealed tax fraud.

¶4. (C) Odhiambo identified the companies involved in tax evasion and money laundering as the five companies in Nakumatt Holdings: XXXXXXXXXXXX. (A CBK report also implicated the John Harun Group, Triton Petroleum, law firm Kariuki Muigua & Co., Pepe Ltd, XXXXXXXXXXXX, and businessmen William Gitau). Odhiambo stated that, although six South Asian Kenyans were listed as the owners of Nakumatt Holdings, some of them were proxy holders of shares actually owned by John Haroun Mwau and MP William Kabogo, both of whom have been linked to smuggling XXXXXXXXXXXX.

Odhiambo noticed a deposit of Ksh10 million/day into Nakumatt,s or Tusker Mattresses, accounts, and he suspected the funds were smuggling proceeds from Harun Mwau,s container depot company, Pepe. Odhiambo believes the perpetrators evaded about Ksh43 billion ($573 million) in taxes, but that KRA has been purposefully understating the figure.

Whistleblowing is Hazardous in Kenya

¶5. (C) When KRA made no effort to pursue the fraud and money laundering at Charterhouse, Odhiambo presented the information in August to CBK Governor Mullei. Mullei formed a task force with KRA and the Kenya Anti-Corruption Commission (KACC) to investigate Odhiambo,s information. Odhiambo left Charterhouse in August 2004.

In November 2004, colleagues still at Charterhouse warned him the bank was aware of his disclosure of information. He began receiving disquieting calls, but claims he was not offered any bribe for silence. Odhiambo suspected someone at KACC revealed his whistleblowing role to Charterhouse. In February 2005, Mullei offered him a position at CBK advising the task force, and his situation &quieted down.8 Odhiambo said the task force confirmed Odhiambo,s information. (Note: Press reports claimed the Charterhouse Bank Archives were destroyed in a fire, so it is not clear whether the task force was able to view the files Odhiambo copied. End note.)

Press reports said CBK fined Charterhouse for violations of the Banking Act and on March 20, 2006 recommended to the Minister of Finance that he cancel the bank,s license (ref A). A few days later, Governor Mullei was charged in court with four counts of abuse of office, apparently in retaliation for his effort to indict Charterhouse.

¶6. (C) In an effort to defend himself, Mullei leaked information on Charterhouse to the press, and Finance Minister Kimunya was forced to close the bank temporarily to prevent a run. On July 6, shadow Finance Minister Kerrow tabled a bootlegged CBK report claiming the Nakumatt Group of companies had evaded Ksh18 billion of taxes. On July 7, two men who identified themselves as police officers from the Central Station confronted Odhiambo at the CBK and ordered him to accompany them to his house for a search.

Fortunately, the acting CBK Governor demanded to see the warrant, and rejected it because it was dated July 2005 and the applicant was no longer the General Manager of Charterhouse.

¶7. (C) Fearing further police harassment, Odhiambo called the Daily Nation, which published his story on July 8, and the Kenya National Human Rights Commission (KNHCR). The head of the Commission arranged a meeting for Odhiambo on July 11 with Justice Minister Martha Karua, who was concerned by his story and regretted how &criminals had taken over so much of the Kenyan Government.8 She advised Odhiambo to write a letter to Police Commissioner Ali asking him to guarantee his safety. He sent copies of the letter to Minister Karua, Finance Minister Kimunya, Internal Security Minister Michuki, the Attorney General and the CBK Acting Governor to ensure they were all aware of the effort to use the police to intimidate or threaten him. Odhiambo never received any acknowledgment of the letters, nor any protection. Nor have the CBK, KRA, KACC, or the Ministry of Finance taken any further action against Charterhouse Bank or the account holders.

The Ministry has not officially released any of the CBK,s reports on the Charterhouse investigation. A scathing July 8 press article called into question Finance Minister Kimunya’s credibility in getting to the bottom of the matter, pointing out a number of critical omissions and deceptions in the Minister’s June 27 statement to Parliament, when he announced the temporary closure of the bank.

¶8. (C) After the July 8 newspaper stories, Odhiambo said he began receiving threatening phone calls warning him to leave Kenya, suspicious people were seen lurking around his house, and his cell phone may have been bugged. He claimed one of the Task Force members connected with him has also received threatening calls. Odhiambo sent his family to the U.S., changed his cell phone, and changed his residence twice. He suspects Mwau and the other businessmen bought protection from all GOK enforcement agencies by funneling large sums of money to senior officials to pay for the NARCs constitutional referendum campaign in November 2005.

For example, one acquaintance at KRA told Odhiambo the KRA Commissioner receives Ksh5 million/month from Mwau,s group. Odhiambo fears Mwau, Kabogo and others involved will kill him or &make him disappear8 both to retaliate and to deter other potential whistleblowers. He does not believe any GOK agency will protect him effectively.

Whistleblower Requests Refuge in the U.S.

¶9. (C) Odhiambo therefore requested refuge in the U.S., where he would like to study and work in the banking field. He believes protecting him would demonstrate the USG cares about corruption in Kenya, protect people in jeopardy, and shame the GOK into a better recognition of the need to seriously address corruption. Odhiambo said it would be dangerous, but he would be willing to return temporarily to Kenya as a witness, if his testimony in court was needed to convict the criminals.

He said he was considering fleeing Kenya shortly, with or without arrangements for onward travel to the U.S. He believed he could travel to a neighboring country and be safe for a time. Refugee Officer discussed the possible options and procedures available for refugee processing. He said he would discuss the issue with the DHS officer responsible and get back to Odhiambo ASAP.

¶10. (C) Credible contacts familiar with the case, including XXXXXXXXXXXX and the journalist investigating the Charterhouse scandal, are unequivocal in lending credibility to Odhiambo’s fears. The believe that Odhiambo, as a low-profile “small fish”, makes a perfect victim through which Mwau and his accomplices can vent their anger and send a message to other whistleblowers to lay off. They urge the USG to do whatever it can do now to assist Odhiambo, both for his own physical safety, and to send a signal that the U.S. supports whistleblowers on corruption.

¶11. (C) Refugee Coordinator discussed this case with DHS rep and others within the Mission. The consensus view among those consulted, as well as Refugee Coordinator’s own view, is that the rarely used in-country DHS interview approach would not be suitable in this case. However, Refugee Coordinator is prepared to write an Embassy referral for Odhiambo should he go to another country, and DHS is willing to interview him for refugee processing.

While Emboffs do not advise anyone to become a refugee, we will let Odhiambo know when he contacts us again that should he depart Kenya, we will arrange an interview for him. Odhiambo has been out of contact since July 20, and Emboffs are concerned about his safety.

Comment

¶12. (C) Odhiambo,s story is credible. It fits well with information from other sources about Harun Mwau, Nakumatt, and the others implicated in the Charterhouse scandal (see reftels). We believe he has a well-founded fear of being injured or killed. The perpetrators would most likely be thugs working for John Harun Mwau and his accomplices, but we can’t rule out that corrupt police or security officers would do the job. In any event, Odhiambo cannot expect GOK protection given the strong ties we believe Mwau enjoys at all levels of the Kenyan government.

MP William Kabogo, if he is involved as now alleged, also has a reputation for being a ruthless businessman. Like Mwau, he got rich by means of a large-scale smuggling operation in Mombasa. He is believed by many to be behind the New Years Eve murder of a CID officer investigating smuggling there. Given the stakes involved (penalties that could reach roughly $1.3 billion, plus potential criminal charges and prison) they have both the incentive and the track record to make an example out of Odhiambo through violent means.

¶13. (C) Although the GOK recently passed a Whistleblower Protection Act, the recent death from pneumonia and in poverty of Goldenberg whistleblower David Munyakei demonstrates the neglect and lack of protection the GOK provides. Odhiambo,s story and concerns sound realistic. A DHS visit to a neighboring country could be arranged relatively quickly, allowing DHS to make a refugee status determination in short order, if Odhiambo chooses that route.

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https://kenyastockholm.com/2011/03/01/wikileaks-releases-nairobi-cable-no-23-money-loundering-at-charterhouse-bank/amp/#top

these guys were my clients back in '05 when i was working 9 to 5 in an insurance co.they had shady undertakings

Leta hekaya

Mimi nashangaa hadi sahii jubilee has not been blamed by folks here

Wueh!

Hii mambo ya whistleblowing ina wenyewe, mimi ni “Omena”

those sums are serious, Erastus Chemorei never stood a chance

    Nothing to write home about but i'd say,nilikula hio pesa,was doing assessment for all their vehicles imported,it was my first time to actually drive a lexus convertible to deliver to a house in westlands, let alone see one,.

      What they'd do was to  import all state of the art cars from audi A8,oil and petrol tankers to car hauler volvo trucks(remember the famous pic of cars being hauled by govt.? yep,that truck and others)and they'd ask us to under value them, for tax evasion, then resell them to dealerships and TZ.

    They were literally swimming in money ,our firm would be invited for some random parties at the then director mr Devani's house and it included all who's who in society.we got introduced to other bigwigs (including some in office today who are condemning corruption) and sorted them as well. 

   When the '09 oil scandal hit,triton went down but managed to drag all affiliates with it,including us,apparently triton made us one of its hundreds shell companies for money laundering and our director was directly involved,money was remitted in cyprus banks amongst other offshore banks,even our paychecks were from the Hellenic Bank,that's what nabbed us,we were questioned,we didn't know much,we didn't talk much.

      No one got jailed for that scandal,as is with every scandal ever concorted but people lost jobs and biz.devani left for europe with an estimated ksh10bil including my month salary paycheck.

But truth be told,money was poured for silence,not really proud of it but hey it’s a dog eat dog world

blowing whistles in kenya is like asking for death

wueh! ni kama ndrama. Nakumatt won’t come back from this.

haiya! someone said Nakumatt was forced by Jubilee Gov to pay the salaries of a State Department.

Jesus on a bicycle!

I remember working with Williams brother along Msa rd, he had a sizeable fleet hauling containers from pepe in Athiriver to nakumatt. It was cash business. They deliver and receive cash immediately. Pepe was and still a mysterious ICD to date.

watu waanikwe. more good reads like this at owaahh.com

the longest document i’ve ever read on this site but hio ni noma

Cheza chini boss, teetering on the department of too much information

That said kitui road was a lucrative destination for many :D:D

Na juzi niliuliza hapa

Mwau sold his shares,why?

Word on the street… Elbowed out to please some strategic investors who Malaysiad and left them high and dry

Talk of counting chicks before they hatch

Sounds like a win-win situation to me

So it means Atul Shah has billions of dollars of suppliers’ money stuffed in some foreign account somewhere? Hii Kenya si ya mama zetu kweli.