Assets Recovery Agency v Mumba & another; Pikipiki Limited (Interested Party) [2022] KEHC 15254 (KLR)

Assets Recovery Agency v Mumba & another; Pikipiki Limited (Interested Party) (Application E002 of 2021) [2022] KEHC 15254 (KLR) (Anti-Corruption and Economic Crimes) (10 November 2022) (Judgment)

Neutral citation: [2022] KEHC 15254 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Application E002 of 2021

EN Maina, J

November 10, 2022

Between

Assets Recovery Agency

Applicant

and

Sidi Mwavuo Mumba

1st Respondent

Esther Mami Mkutano

2nd Respondent

and

Pikipiki Limited

Interested Party

Judgment

1. The Assets Recovery Agency, the Applicant filed an Originating Motion dated 18th January 2021 supported by affidavits sworn by Corporal Fredrick Muriuki on 18th January, 2021 and 10th February 2022.

2. The Application is brought under Sections 81, 90 and 92 of the Proceeds of Crime and Anti-Money Laundering Act and it seeks the following orders:1)That this Honourable court be pleased to issue an order declaring that the motorcycles registration numbers KMFB 506X Bajaj BM 150CC and KMFB 507X Bajaj BM 150CC are proceeds of crime and therefore liable for forfeiture to the Government

2)That this Honourable Court be pleased to issue orders of forfeiture of the following motorcycles:i.KMFB 506X Bajaj BM 150CCii.KMFB 507X Bajaj BM 150CC

3)That this Honourable Court be pleased to issue an order that the above motorcycles be forfeited to the Government of Kenya and transferred to the Assets Recovery Agency (the Applicant herein).

4)That this Honorable Court to issue an Order directing the Director NTSA to transfer ownership in the Logbooks of the motorcycles in prayers 1 and 2 above in the name of the Interested Party in favor of Assets Recovery Agency.

5)That this Court do make any other ancillary orders it considers appropriate to facilitate the transfer of the property forfeited to the Applicant.

6)That costs be provided for.

3. The Application is premised on the following grounds:“1)........2).........3)........4)........5)That the Respondents are female Adults of sound mind residing at Kilifi County and the 2nd Respondent is the beneficial owner of the assets specified under prayers 1 and 2 above.6)That the Interested Party is the registered owner of the assets specified under prayers 1 and 2 above.7)That following the arrest of the Respondents on the 6' May, 2020 at Mariakani Township, Kilifi County and subsequent arraignment in court on 7th July, 2020 charged with the offence of obtaining money by false pretenses contrary to Section 312 as read with Section 313 of the Penal Code inter alia in the Senior Principal Magistrates Court at Mariakani vide criminal case No C..167 of 2020, the Agency commenced investigation to recover proceeds of crime accrued to the respondents through the illegitimate scheme of acquiring of properties in accordance with its mandate.8)That investigations established that Esther Mami Mkutano and Sidi Mwavuo Mumba obtained Kshs. 1,150,000 fraudulently from Donald Chitayi Kithome by falsely pretending that they were in a position to buy on his behalf a parcel of land located at Mkwajuni area near Mariakani Township.9)That on or about 19th August, 2020, the Agency received information that the Respondents had acquired assets/properties using the proceeds obtained from the illicit funds that they had obtained by false pretenses contrary to Section 312 as read with Section 313 of the Penal Code and Proceeds of Crime and Anti-Money Laundering Act.10)That the Agency opened an inquiry file No. 46 of 2020 to investigate and inquire into the activities of the Respondents for purposes of ascertaining whether the said motor cycles are proceeds of crime.11)That the investigations established that the motorcycles are proceeds of crime obtained by false pretenses contrary to Section 312 and 313 of the Penal Code and of the Proceeds of Crime and Anti-Money Laundering Act 2009. 12)That the investigations further established that the 2nd Respondent acquired assets/properties using proceeds obtained from the illicit funds that they had obtained by false pretences and benefitted from their illegal act.13)That investigation has established that the motor cycles are registered in the name of the Interested Party and their ownership is yet to be transferred to the 2nd Respondent who is the beneficial owner.14)That the investigations further established that the 2nd Respondent acquired the assets/properties which are proceeds of crime by false pretenses.15)That investigation established that there are reasonable grounds to believe that the assets/properties are obtained through the illegitimate scheme of falsely obtaining money and the motorcycles are a benefit if an illegal act.16)That investigations established that the assets/properties were unlawfully acquired hence proceeds of crime contrary to the provisions of Proceeds of Crime and Anti-Money Laundering Act 2009. 17)That the Applicant is mandated under POCAMLA to trace, identify and make an application for forfeiture of proceeds of crime.18)That it is in the interest of justice that forfeiture orders do issue forfeiting the assets specified above to the Applicant.19)That unless this Honourable Court grants the orders sought, the economic advantage derived from the commission of crimes will continue to benefit a few to the disadvantage of national security, interests, economy and general interest.20)That there attaches an international obligation for every state to combat illegitimate poaching, transnational organized crime and laundering of proceeds of crime by proper implementation of their national domestic laws.21)That it is in the public interest that the orders sought are granted and the suspect assets and funds in the aforementioned accounts be forfeited to the Applicant on behalf of the Government of Kenya.”

4. The Application was unopposed because although the Respondents were duly served with the Originating Motion they neither entered appearance nor filed a defence/Response to the application.

5. The Applicant filed written submissions dated 30th March 2022 which this court has considered fully.

Analysis and determination 6. The issue for determination is:Whether the motorcycles registration numbers KMFB 506X Bajaj BM 150CC and KMFB 507X Bajaj BM 150CC are proceeds of crime and liable for forfeiture to the Government.

7. The Applicant contends that the 2nd Respondent purchased the two motorcycles registration numbers KMFB 506X Bajaj BM 150CC and KMFB 507X Bajaj BM 150CC on 3rd March 2020 from Pikipiki Limited for Kshs. 115,000 each and paid for the same in cash. It is the Applicant’s contention that a total of Kshs. 1,150,000 was obtained by the Respondents from one Donald Chitayi Kithome through false pretences and that the Respondents were subsequently charged in Mariakani Senior Resident Magistrate’s Court Criminal Case No. 167 of 2020. According to the Applicant, the predicate offence is obtaining money by false pretenses contrary to Section 312 as read with Section 313 of the Penal Code. The Applicant asserts that the motorcycles are proceeds of crime as they were acquired from proceeds of crime being the monies obtained from the said Donald Chitayi by the Respondents on the pretext that they were in a position to assist him to purchase a parcel of land.

8. Section 2 of the Proceeds of Crime and Anti-Money Laundering Act defines proceeds of crime to include:-“any property or economic advantage derived or realized, directly or indirectly, as a result of or in connection with an offence irrespective of the identity of the offender and includes, on a proportional basis, property into which any property derived or realized directly from the offence was later successively converted, transformed or intermingled, as well as income, capital or other economic gains or benefits derived or realized from such property from the time the offence was committed.”Such assets if found to be proceeds are liable for forfeiture to the Government.

9. Forfeiture proceedings are guided by Section 92 of the Proceeds of Crime and Anti-Money Laundering Act which states:-“Section 92. Making of forfeiture order(1)The High Court shall, subject to section 94, make an order applied for under section 90(1) if it finds on a balance of probabilities that the property concerned-(a)has been used or is intended for use in the commission of an offence; or(b)is proceeds of crime.(2)The Court may, when it makes a forfeiture order or at any time thereafter, make any ancillary orders that it considers appropriate, including orders for and with respect to facilitating the transfer to the Government of property forfeited to it under such an order.(3)The absence of a person whose interest in property may be affected by a forfeiture order does not prevent the Court from making the order.”

10. The Respondents and the Interested Parties despite having been served by the Applicant did not file any documents in respect of these proceedings. On 29th June 2022 when the matter came up for hearing, Mr. Mkan, Counsel for the Interested Party orally informed the court that the Interested Party was not interested in the proceedings and that they would abide by the orders of the court. It is instructive that although on that day the Respondents were logged in/present in the virtual session they were unresponsive. They did not speak despite much prodding by this court.

11. It is evident from the affidavit of CPL Muriuki that the two motorcycles registration numbers KMFB 506X Bajaj BM 150CC and KMFB 507X Bajaj BM 150CC were purchased through funds which were tainted in that they were obtained through false pretenses from one Donald Chitayi Kithome that being the reason why the Respondents were charged with the offence of obtaining by false pretences contrary to Section 312 as read with Section 313 of the Penal Code. Section 92(4) of the Proceeds of Crime and Anti-Money Laundering Act however states that the validity of a forfeiture order is not affected by the outcome of criminal proceedings. In any event there is no rebuttal to the evidence contained in Cpl Muriuki’s affidavits. I am therefore satisfied that the Assets Recovery Agency/Applicant has proved its case against the Respondents on a balance of probabilities. Moreover, the 2nd Respondent, recorded a statement dated 7th May, 2020 at the Mariakani Police Station (same is annexed to the affidavit of CPL Muriuki and is marked FM2b). In the statement, the 2nd Respondent admitted that she purchased and paid for the two motorcycles using the proceeds or monies unlawfully obtained from the said Donald Chitayi Kithome. Accordingly, I am satisfied that the two motorcycles are proceeds of crime and are liable for forfeiture to the government.

12. In the premises, I allow the Applicant’s Originating Motion dated 18th January 2021 and make the following orders:

1. The motorcycles registration numbers KMFB 506X Bajaj BM 150CC and KMFB 507X Bajaj BM 150CC are proceeds of crime and therefore liable for forfeiture to the Government

2. The motorcycles registration numbers KMFB 506X Bajaj BM 150CC and KMFB 507X Bajaj BM 150CC be and are hereby forfeited to the Government.

3. The Director of National Transport Services Authority is hereby directed to transfer ownership in the logbooks of the motorcycles registration numbers KMFB 506X BAJAJ BM 150CC and KMFB 507X Bajaj BM 150CC in the name of the Interested Party to the Assets Recovery Agency.

4. Costs shall be borne by the Respondents.

DATED, SIGNED AND DELIVERED VIRTUALLY THIS 10TH DAY OF NOVEMBER 2022E N MAINAJUDGEIn the presence of:-Ms Irari for the ApplicantNo appearance for the RespondentsNo appearance for the Interested PartyCourt assistant – Potishoi