Asssets Recovery Agency v Cornelius & another [2023] KEHC 25397 (KLR)

Asssets Recovery Agency v Cornelius & another (Civil Application E010 of 2023) [2023] KEHC 25397 (KLR) (Anti-Corruption and Economic Crimes) (16 November 2023) (Judgment)

Neutral citation: [2023] KEHC 25397 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Anti-Corruption and Economic Crimes

Civil Application E010 of 2023

EN Maina, J

November 16, 2023

Between

Asssets Recovery Agency

Applicant

and

Anton Ryan Cornelius

1st Respondent

African Confidence Limited

2nd Respondent

Judgment

Introduction 1. This matter concerns the forfeiture application over suspicions funds held in the Respondent’s accounts held in Diamond Trust Bank Kenya.

2. The Respondents account received a huge sum of funds from an account in Mauritius held under a company where the first respondent is a director, where the explanation of the source was found to be unsatisfactory to the Applicant, hence the current proceedings.

The Parties 3. The Applicant is the Asset Recovery Agency established under Section 53 of the Proceeds of Crime and Anti Money Laundering Act (herein after referred to as POCAMLA] as a body corporate with the mandate of identifying, tracing, freezing and recovering proceeds of crime. The agency has authority to institute civil proceedings for the recovery of proceeds of crime and seek orders for forfeiture of assets to the government where there are reasonable grounds to believe that such assets are proceeds of crime. The agency also has policing powers under Section 53A of the Proceeds of Crime and Anti-Money Laundering Act to enable it investigate, identify, trace, freeze and recover proceeds of crime.

4. The 1st Respondent is a British national and the sole director of the 2nd Respondent and is the beneficiary of the funds in account numbers xxxx (KSHS), xxxx (USD), xxxx (USD) held at Diamond Trust Bank. He’s also the sole director and shareholder of the 2nd Respondent and Jossimba Limited which is a company incorporated in Seychelles with an offshore account held at Bank One Limited in Mauritius.

5. The 2nd Respondent a limited company, holds account number xxxx (USD) at Diamond Trust Bank.

The applicant’s case 6. The application coming for consideration in this Judgement is the Originating Motion dated 15/05/2023 brought under Sections 90 & 92 of the Proceeds of Crime and Anti-Money Laundering Act and Order 51 Rule 1 of the Civil Procedure Rules, seeking the following orders: -“1. This Honourable Court do issue orders declaring that the funds held the Respondents' bank accounts as listed herein below are proceeds of crime liable for forfeiture to the Applicant;i.Kshs. 145,235. 06 held in account No. xxxx at Diamond Trust Bank Limited in the name of Anton Ryan Cornelius.ii.USD 308,332. 80 held in account number xxxx at Diamond Trust Bank Limited in the name of Anton Ryan Cornelius.iii.USD 40,680. 16 held in Account number xxxx at Diamond Trust Bank Limited in the name of African Confidence Limited.2. The Honourable Court be pleased to issue orders of forfeiture of the funds held in the accounts in prayer 1 above to the Assets Recovery Agency on behalf of the Government.3. That this Honourable Court be pleased to issue an order that the said funds be transferred to the Applicant's Deposit Account for recovered criminal assets fund, account No. xxxx at Kenya Commercial Bank.4. That the Honourable Court do make any other ancillary orders it deems fit and just for the proper execution of its orders.5. That costs be in the cause.”

7. The application is based on the following grounds:-“1. That the Applicant is the Assets Recovery Agency established under Section 53 of the Proceeds of Crime and Anti-Money Laundering Act (herein after referred as POCAMLA) as a body corporate with the mandate of identifying, tracing, freezing and recovering proceeds of crime.2. That under Part VIII of POCAMLAthe Agency has authority to institute Civil Forfeiture proceedings for the recovery of proceeds of crime and seek orders for forfeiture of assets to the Government where there are reasonable grounds to believe that such assets are proceeds of crime.3. That the Applicant has policing powers under section 53A of POCAMLA to enable it to investigate, identify, trace, freeze and recover proceeds of crime.4. That the 1st Respondent is a British National and sole director of the 2nd Respondent and is the beneficiary of the funds in account numbers xxxx (KSH), xxxx (USD) and xxxx (USD) held at Diamond Trust Bank.5. That the 1st Respondent is also the sole director and shareholder of Jossimba Limited, a company incorporated in Seychelles but held an offshore bank account domiciled at Bank One Limited in Mauritius.6. That the 2nd Respondent holds account number xxxx (USD) at DTB bank Limited.7. That the Applicant received information that there were suspicious funds transferred in the Respondents accounts, which funds were suspected to be proceeds of crime.8. That the 1st Respondent provided a share purchase agreement to the effect that he allegedly received Kshs. 62,000,000 (Kenya Shillings Sixty-Two Million) as consideration from a share purchase agreement with respect to Dalton Limited between Heather Anne Cornelius & Natasha Cornelius and Thomas Morton & Emma Morton, an explanation that was not satisfactory.9. That the 2nd Respondent holds two personal accounts at DTB Bank Limited in Kenya; A/C No. xxxx (KSHS) and A/C No. xxxx (USD), in which the 1st Respondent received large sums of money totaling to USD l, 101,792 from an account held in the name of Jossimba Limited domiciled at Bank One Limited in Mauritius.10. That the 1st Respondent could not give a clear explanation on the source of funds as at one time the 1st Respondent alleged that the funds were as a result of the sale of family asset and in another instance, he stated that the source of the funds was from closure proceeds of his personal account held at JP Morgan Chase Bank, New York.11. That the Applicant conducted investigations which revealed that the Respondent's accounts had received huge suspicious cash deposits/transfers both in US dollars and Kenya shillings.12. That the investigations have revealed that this is a scheme of money 'laundering aimed at disguising the source and destination of the funds hence proceeds of crime pursuant to the Provisions of Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) liable to be forfeited to the Government.13. That there are reasonable grounds to believe that the funds held in the 1st and 2nd Respondents’ bank accounts are conduits of money laundering contrary to Section 3, 4, and 7 as read together with Section 16 of the proceeds of crime and Anti-Money Laundering Act (POCAMLA).14. That it is in the public interest that the orders sought are granted and the suspected funds be forfeited to the Government.”

8. The application is supported by the affidavit of Bernard Gitonga, the Applicant’s officer in charge of investigations sworn on 15/5/2023 which reiterates the grounds upon which the application is brought and deposes further that the Applicant had sought that the funds be frozen and preserved which application had been granted.

9. He also deposed that the 1st Respondent had produced a letter to confirm the closure of Bank Account Number 0164257033 belonging to Jossimba Limited with a balance of USD 446,150. 27 which was closed on 11th March 2021 because of a change in the Bank’s internal Policy. The 1st Respondent had also explained that he intended to obtain an investment visa in Kenya and the conditions were that he should have a bank account with a minimum of USD 100,000 to facilitate the process.

10. The Share purchase agreement produced by the 1st Respondent was not satisfactory as he had not been party to the transaction. When probed why the money was deposited into his account and not the vendor’s, he had explained that he had been the only contact person of the sellers who were based in Britain. The sale had also been conducted in 2017 while the funds were deposited into his account in 2021. He had alleged that the funds from the land sale had been deposited into the advocates accounts in Kenya, wired to Pakistan and invested in Global Gums Limited under a loan agreement earning him 15. 5% interest yet he was not the vendor, the loan agreement was not produced and the total funds did not add up to the interest rate.

11. Gitonga also deposed those investigations had uncovered that the 1st Respondent’s father had been convicted over massive fraud that had involved 500 million USD in Dubai.

12. The source of the funds in the Mauritius account has not been explained by the 1st Respondent.

The Respondent’s case 13. The Respondents opposed the application in their replying affidavits, all dated 15th June 2023 and sworn by the 1st Respondent. He deposed as follows: The funds in issue in this matter were sourced from genuine legal business operations.

The Applicant after obtaining freezing orders, had summoned the 1st Respondent for interrogations and he had supplied the agency with the supporting documents demonstrating the source of the funds, how it had been invested and how the funds had eventually accumulated.

On 12/11/2017 his mother and sister sold their shares in Dalton Limited, which owned land, and he had been nominated as a contact person on behalf of the vendors. Kshs. 62 million was paid in the transaction through Kaplan & Stratton Advocates who transferred the funds to Zehra Karim, in Pakistan to be invested in Golden Gums Holding Limited under a loan agreement which would earn the 1st Respondent an interest. He had travelled to Pakistan to inspect the operations of the company which was a member of the chamber of commerce in Pakistan, and correspondence to this effect is attached.

In August 2018, the 1st Respondent incorporated Jossimba Limited in Seychelles where direct deposits from Golden Gums Holding Limited were made as it had accounts in Mauritius. He eventually set up an account in the name of the 2nd Respondent with Bank One in Mauritius for ease of payment.

On 3/2/2020, entered into a further loan agreement through Jossimba Capital Limited with the Global Gum and invested a further 80,000 USD, a further loan agreement for 500,000 USD on 10/2/2020 and 315,000 USD on 28/4/2020. Interest on the loans would be made to Jossimba account. Bank statements attached show various payments received by Jossimba from Global Gum.

Funds received in Jossimba Account would be invested in the stock market in various global companies through Bank One.

The 2nd Respondent was incorporated in 2019 with its core business being the import and sale of motorbike seat covers which were imported from Pakistan. The funds were sourced from Bank One and were deposited into the 2nd Respondent’s Account at DTB. The seat covers were purchased but did not perform in the market. Payment details for the seat covers has been attached.

In April 2022, the 1st Respondent incorporated AJ Original Spares Company Limited in South Sudan dealing in Motor vehicle spare parts, which was authorized to carry out import and export business. The funds used for the importation of the spare parts came from the 2nd Respondent’s Account. That business has stayed stuck because of the restrictions placed on the subject account by the Applicant herein.

The USD Account at DTB in the name of the 1st Respondent has been inactive since May 2019. All credits into the account were sourced from Josssimba account at Bank One or through direct internal transfer from the 2nd Respondent’s Account in DTB. Payments of USD 100,000 on 25/5/19 was by swift transfer from Jossimba Limited, USD 10,000 from the 2nd Respondent’s USD Account on 28/5/2021, and USD 994,792. 90 on 30/7/2021 from Jossimba Account in Mauritius due to closure of the account.

The 1st Respondent’s KSHS. account at DTB became active on 14/5/2019 and all credits into the account were made by the 1st Respondent personally.

The 2nd Respondent’s USD Account with DTB became active on 08/10/2019 and all credits were through the 1st Respondent’s USD account at DTB and Jossimba Account in Mauritius.

The closure of the Mauritius account was due to introduction of legislative regulations which affected the Bank’s internal policy requiring the Respondent to close his accounts by 10/2/2021. The funds were forwarded through JP Morgan Chase Bank New York merely as a clearing Bank.

Bank One in Mauritius is subject to the Financing Intelligence and Anti-Money Laundering Act which required the Bank to report any suspicious transactions and not seek closure of the accounts. The Bank issued a closure notice on 9/2/21 and agreed to extend the period by over 4 months, showing that it was not de-risking as that would have called for immediate dissociation from the Bank. No report was ever lodged by the Bank to report suspicious activities on the Respondent’s account.

The suggestion that the funds are connected to the 1st Respondent’s father Ryan Cornelius is absurd as he was arrested in Dubai in 2008, when the 1st Respondent was 17 years old, and has been in custody ever since. The arrest was found to be arbitrary by the United Nations Human Rights Council and the allegations that the 1st Respondent’s funds are connected to the arrest are baseless.

The applicant’s application is based on mere suspicion yet the source of funds had been adequately explained. The Applicant had confirmed that it had verified and confirmed the authenticity of the documents issued in Kenya.

He Applicant also had the legal power to liaise with the Financial Intelligence Unit in Mauritius and Pakistan on suspicion of money laundering but it did not. Despite this, no credible evidence has been placed before this court to demonstrate illegality.

The 1st Respondent denied any averments to the Applicant that the Mauritius account was closed because he needed a Kenyan Visa. He had merely indicated that to get an investor’s visa, he was required to have a Bank account with minimum USD 100,000, which had been specifically quarried by the agency.

He had also not said at any time that the proceeds from the share transfer were deposited in his account. Kaplan and Stratton remitted the funds to Zehra Karim, the representative of Global Gums on the basis of the loan agreement.

The 1st Respondent has annexed the Certificate to authenticate the electronic records presented to Court.

The Plaintiff’s submissions 14. The applicant submitted that the 1st Respondent was not a director or shareholder of Dalton Limited and was thus not privy to the share transfer agreement from which he claims to have sourced the capital. No evidence of authority to transact in the funds was tabled. The company had 5000 shares with a nominal value of Kshs 20 each with a share capital of Kshs. 100,000 yet it was sold for Kshs. 62 Million.

15. The activities of Dalton Company prior to its sale have not been demonstrated to this court. Investigations showed no record of any activities being undertaken by the company to support its growth to purchase the said property.

16. No evidence was provided to show the movement of funds from the purchaser to the vendor in the transaction.

17. The 1st Respondent had averred that he had never met the supposed buyers of the property. The buyers were also untraceable to the applicant. The source of Kshs. 62 million remains unexplained.

18. There is no proof of direct transfer of funds from the 1st Respondent to Global Gums Limited and no explanation why the funds were received by an individual as opposed to the company. There’s also no proof that the money received by Zehra Karim was eventually transferred to Global Gums Limited. The loan agreement provided was signed in Dubal and the names and designation of the persons signing on behalf of Global Gums Limited is missing.

19. The three loan agreements with Global Gums Limited within a span of two months fail to show the source of the funds being invested.

20. The interest schedules to the loan agreement has not been presented leading to conclusion that the transaction is fictional.

21. There has not been any evidence of income generating activities of Jossimba Limited whose account was held in Mauritius. The money generated from trading in stock, being from an unexplained source would make the money earned from the stock trade also proceeds of crime.

22. The 1st Respondent admitted that the business for which the 2nd Respondent was set up for did not kick off and he is still in possession of the merchandise yet the account of the 2nd Respondent received USD 40,680. 16 whose source is unknown. He has also failed to explain how the 2nd Respondent which was not generating income was able to fund a spare parts company in South Sudan.

23. The Applicant submitted that money launders usually create complex schemes to camouflage and conceal assets and benefits from criminal activities just as the 1st Respondent had moved money from jurisdiction to another with the aim of legitimizing it through legal financial systems.

24. The Applicant contends that the closure of the Jossimba Limited account by Bank One in Mauritius was as a result of de-risking as banks would not want to lose such huge deposits.

25. It submits that the inconsistencies exhibited by the 1st Respondent are satisfactory to warrant forfeiture of the proceeds of crime to the state.

26. The Applicant submits that the funds that are subject in this matter are proceeds of crime and should thus be forfeited to the state. This court has power under section 92(1) to issue orders of forfeiture if it finds on a balance of probabilities, reasonable grounds to establish that the funds are proceeds of crime.

27. The Applicant relied on the following cases in their submissions: Agricultural Finance Corporation -v- Lengitia Limited (1985) KLR 765

Assets Recovery Agency -v- Pamela Aboo, EACC Interested Party (2018) eKLR: Where the person against whom allegations have been made does not give satisfactory explanation to rebut the allegations, it means that what is resented is not challenged.

Nguku -v- Republic (1985) KLR 412: The Court cited Section 112 of the Evidence Act to the effect that Respondents had a duty to produce evidence of legitimate business, failure to which their allegations were considered false.

KACC vs James Mwathete Mulewa & Anor (2017) eKLR

Schabir Schaik & Others -v- State Case CCT 86/06 (2008) ZACC 7

Abraham Mahmoud Sheikh & Others -v- Republic & Other (2016) eKLR

Director of Assets Recovery and Others -v- Green & others (2005) EWHC 3168

The Respondent’s submissions 28. The Respondents submitted that the 1st Respondent is a man of great business acumen with the capacity to identify opportunities globally who grew his wealth from a capital of Kshs. 62,000,000 which was USD 440,000 in 2017. The 1st Respondent annexed the share purchase agreement as well as his birth certificate to demonstrate that Heather Anne Cornelius is indeed his mother. He submitted that the consideration for the share transfer was deposited in the Kaplan & Stratton Advocates bank account who then conveyed it in form of USD to a representative of Global Gums Limited pursuant to a loan agreement between the 1st Respondent and Global Gums Ltd. The remittance of the Advocates was also annexed. The 1st Applicant also argued that the Share purchase agreement recognized him as the contact person on behalf for his mother and sister; that the Applicant had confirmed that they had authenticated the documents issued in Kenya. The Respondent reasonably expected the Applicant to reach out to Kaplan & Stratton Advocates to authenticate the details of the transaction. The Applicant has not tabled any evidence from the firm to suggest that the transaction was not genuine.

29. All of the Respondent’s businesses were conducted in countries which are signatories to the United Nations Convention Against Corruption and the Eastern and Southern African Anti-Money Laundering Group.

30. Dalton Limited had been incorporated in the year 1990 and it owned an asset known as Sub-Division Number Group V/443. Share transfer includes the transfer of interest in the assets owned by a company. The agency did not show any documentary evidence that the share transfer was nit effected at the Companies Registry.

31. The Claim that the purchasers of the shares were untraceable is also unfounded as they were represented by Kaplan & Stratton Advocates and there has been no evidence that attempts to trace them through the firm were futile.

32. The Applicant’s suspicions are based on a mere misunderstanding of the Respondents’ business model.

33. The source of the Respondents’ capital has been explained through documentation and the eventual accumulation through legal businesses.

34. The Agency has failed to table the report compiled through correspondence with Interpol on the nature of businesses carried out by the 1st Respondent in the other countries leading to a reasonable inference that there was no illegality.

35. Learned Counsel for the Respondents relied on the following cases to support their submissions: Asset Recovery -v- Bala (Anti-Corruption and Economic Crimes Civil Suit number E005 of 2021 (2022) KEHC 11829(KLR)

Maseno University Savings and Credit Co-operative Society Limited -v- Stima Savings and Credit co-operative Society Limited (2020) eKLR.

Chase Bank (Kenya) Limited -v- Cannin Assurance (K) Limited (2019) eKLR

Kenya Akiba Microfinancing Limited -v- Ezekiel Chebii & 14 Others (2012) eKLR

Asset Recovery Agency -v- Ruth Nyambura James T/A Jaruh Supplies Butah Technologies Cailytech Solutions Sinatab Agencies & Another, Nairobi, ACECA No. E21 of 2021

Asset Recovery -v- Khalid Jameel Ahmad Hamed, E017/2022

The Issues for determinationi.Whether the Respondent’s funds held in accounts numbers xxxx (KSH), xxxx (USD) and 0579377002 (USD) at Diamond Trust Bank are proceeds of crime liable to forfeiture.ii.Who shall bear the costs of these proceedings?

Analysis and Determination Issue (i) - Whether the Respondent’s funds held in accounts numbers xxxx (KSH), xxxx (USD) and 0579377002 (USD) at Diamond Trust Bank are proceeds of crime liable to forfeiture 36. Section 92(1) of the Proceeds of Crime and Anti-Money Laundering Act enjoins this court to order forfeiture if it is satisfied on a balance of probabilities that the property is proceeds of crime of instrumentality of crime.

37. Section 2 of the Proceeds of Crime and Anti-Money Laundering Act defined proceeds of crime to mean “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 form 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.”

38. The threshold for proof is therefore on a balance of probabilities and the legal burden falls on the Assets Recovery Agency.

39. It is also evident from a reading of Section 92(4) of the Proceeds of Crime and Anti-Money Laundering Act that to succeed, the Applicant need not prove the commission of a specific offence.

40. This was explained as follows in the case of Director of Assets Recovery and Others v Green & Others [2005] EW HC 3168 where the court stated:-“In civil proceedings for recovery under parts of the Act the Director need not allege the Commission of any specific criminal offence but must set out the matters that are alleged to constitute the particular kind or kinds of unlawful conduct by or in return for which the property was obtained.”

41. Similarly, in the case of Assets Recovery Agency & Others v Audrene Samantha Rowe & others Civil Division Claim NO. 2012 H CV 02120 the court held:-“.... that in deciding whether the matters alleged constituted unlawful conduct when a civil recovery order is being made is to be decided on a balance of probability, civil recovery proceedings are directed at the seizure of property and not the conviction of any individual and thus there was no reason to apply the criminal standard of proof.”Further in the Namimbian case of Tekla Nandjila Lameck v President of Namimbia 2012 (1) NR 255 (HC) it was held:“.......Asset forfeiture is, as is stated inSection 50 of POCA, a civil remedy directed at confiscation of the proceeds of crime and not at punishing an accused. Chapter 6 proceedings are furthermore not necessarily related to a prosecution of an accused. Those proceedings are open to the state to invoke whether or not there is a criminal prosecution...... even if there is a prosecution, the remedy is not affected by the outcome of the criminal proceedings. The remedy is thus directed at the proceeds and instrumentalities of crime and not at the person having possession of them. This is in furtherance of the fundamental purpose of these procedures referred to above.”

42. Closer home it was held as follows in the case of Abdulrahman Mahmoud Sheikh & 6 Others v Republic & Others [2016] eKLR: -“The letter, spirit purpose, and gravamen of the Proceeds of Crime and Anti-Money Laundering Act is to ensure that one doesn’t benefit from criminal conduct and that should any proceeds of criminal conduct be traced, then it ought to be forfeited, after due process, to the state, on behalf of the public which is deemed to have suffered some injury by the criminal conduct.”

43. It is also now well settled that in civil application for forfeiture whereas the Applicant bears the legal burden of proof when the applicant discharges that burden the evidential burden shifts to the Respondent (s) to prove that the property was lawfully obtained. This is as was held by the Kenya Court of Appeal in the case of Stanley Mombo Amuti v Kenya Anti-Corruption Commission [209] eKLR albeit ruling on forfeiture under the Anti-Corruption & Economic Crimes Act (ACECA) held:-“76. The trial court in considering this submission at paragraph 92 of its judgment expressed that a claim for civil recovery of unexplained assets can be determined on the basis of conduct in relation to property without identification of any particular unlawful conduct; that in the instant matter, the respondent was not required to prove the appellant actually committed an act of corruption in order to invoke the provisions of ACECA. The learned judge cited dicta from the case of Director of Assets Recovery Agency & others -v- Green & Others [2005] EWHC 3168 where it was stated:“In civil proceedings for recovery under Part 5 of the Act, the Director need not allege the commission of specific criminal offence but must set out the matters that are alleged to constitute the particular kind or kinds of unlawful conduct by or in return for which the property was obtained.”

77. We have considered the appellant’s contestation that no allegation of corrupt conduct or abuse of office has been leveled against him and that he has never been charged or convicted of an offence under the ACECA.

78. The concept of “unexplained assets” and its forfeiture under Sections 26 and 55 (2) of ACECA is neither founded on criminal proceedings nor conviction for a criminal offence or economic crime. Sections 26 and 55 of ACECAare non-conviction based civil forfeiture provisions. The Sections are activated as an action in rem against the property itself. The Sections require the Anti- Corruption Commission to prove on balance of probability that an individual has assets disproportionate to his/her legitimately known sources of income. Section 55 (2) of the Act make provision for evidentiary burden which is cast upon the person under investigation to provide satisfactory explanation to establish the legitimate origin of his/her assets. This evidentiary burden is a dynamic burden of proof requiring one who is better able to prove a fact to be the one to prove it. Section 55 (2) of ACECA is in sync with Section 112 of the Evidence Act, Cap 80 of the Laws of Kenya. Section 112 of the Evidence Act, (Cap 80 of the Laws of Kenya) provides:““In civil proceedings when any fact is especially within the knowledge of any party to those proceedings the burden of proving or disproving that fact is upon him.”

44. A similar finding was reached in the Jamaican case of Assets Recovery Agency v Fisher, Rohan and Miller, Delores, Supreme Court of Jamaica, Claim No. 2007 HCV003259 where it was observed: -“........ Even though these proceedings are quasi criminal in nature there is an evidential burden of proof on the defendant. It is incumbent on them to demonstrate evidentially now they lawfully came into possession of the assets seized.......”

45. In this case the Applicant’s contention that the impugned funds are proceeds of crime is premised on the ground that the 1st Respondent had transferred the funds from one jurisdiction to another before finally moving them to the Diamond Trust Bank. It is the Applicant’s contention that the conduct of moving the money from one jurisdiction to another was a money laundering scheme and a means to disguise its real source. The 1st Respondent admitted that before transferring the funds to the impugned accounts at the Diamond Trust Bank he had moved the money to Pakistan and Mauritius. It was his evidence that as a matter of fact he moved the funds to Kenya as a result of the Bank One Limited in Mauritius insisting that he move the funds due to what the bank claimed was a change in its rules. The Applicant however contends that the Mauritius Bank One Ltd was de-risking which is one of the means by which a bank disengages with customer especially if they are high risk for money laundering under the international anti-money laundering framework. It is also the Applicant’s contention that the 1st Respondent’s explanation for moving the funds in the manner that he did was inconsistent.

46. Section 91(4) of the Proceeds of Crime and Anti-Money Laundering Act recognizes that such funds may not be directly traced to a specific crime. The movement of money by the 1st Respondent, registration of different companies in the jurisdictions where he traded with those funds and the sheer amount of those funds would warrant an explanation form the Respondents as to the source of funds. It is my finding therefore that the Applicant has discharged its legal burden on a balance of probabilities hence shifting the evidential burden to the Respondents to prove that the funds were acquired lawfully. This is after all the position as espoused by Section 112 of the Evidence Act which states: -“112. Proof of special knowledge in civil proceedingsIn civil proceedings, when any fact is especially within the knowledge of any party to those proceedings, the burden of proving or disproving that fact is upon him.”

47. The 1st Respondent’s case is that the source of the funds was the sale of his mother and sister’s shares in a company known as Dalton Limited. He annexed a Sale Agreement dated 13th November 2017 between Heather Anne Cornelius and Natasha Cornelius (His mother and sister respectively) on the one hand and Thomas Morton and Emma Morton on the other hand. It was his evidence that the consideration for the share was Kshs. 62,000,000/- and that was the money he invested and grew to the impugned funds. He averred that the sale of the share was done through the firm of Kaplan & Stratton Advocates which then transmitted the funds to a company known as Global Gums Holdings Ltd with who he had entered into a loan agreement. He explained that the loans agreements with Global Gum Holdings Ltd was extended severally and when it transpired that the bank in Pakistan could not pay him interest, he opened another company – Jossimba Ltd in Seychelles – through which the proceeds of the investments in Global Gums Holdings Ltd were subsequently remitted. After that the funds would be paid into the account of the 2nd Respondent in Bank One, Mauritius where Global Gums Ltd has an account. That continued until Bank One gave him notice to close the account. He denied that Bank One was de-risking and gave reasons for so stating.

48. This court has no reason to doubt that the 1st Respondent is a man of great business acumen. Indeed, this is demonstrated in the manner in which he invested the funds. However, the crux of this case is not the capital gains of income from the funds but the source of those funds out of which the income and capital gains were accumulated.

49. I have carefully considered the 1st Respondent’s claim that the source of the funds was the sale of his mother and sister’s share in Dalton Limited. I am however not persuaded that that is the case. To begin with there is no evidence of completion of the agreement in accordance with Clause 5 and hence payment of the consideration to the vendors by the purchasers. The 1st Respondent did not also adduce evidence of payment of the sum of Kshs. 62 million to the firm of Kaplan & Stratton by the vendors. There is therefore no proof that the sum of 4400 USD paid to Global Gums Holding Ltd by Kaplan & Stratton was the proceeds of this sale agreement.

50. Moreover, Clause 4 of the Sale Agreement contained a condition precedent which had to be fulfilled before transfer of the company could take place. There is no evidence that the said condition precedent was either fulfilled or waived in writings provided in Clause 4. 4. of the agreement.

51. Further Clause 11 of the agreement expressly stated that the rights of the parties to the agreement could not be assigned without their prior written consent. There is no evidence that the 1st Respondent’s mother and sister had through a prior written consent(s) assigned their rights to the Respondent as would have authorized Kaplan and Stratton to transfer the purchase price to Global Gums Holdings Limited as alleged by the 1st Respondent. The affidavits annexed by the 1st Respondent to the effect that his mother authorized him to invest the funds were sworn on 13th June 2023 during the pendency of these proceedings and clearly the same could not have been made in relation to the sale agreement. It is also instructive that the agreement only appointed the 1st Respondent as the person to receive any notice demand or other communication on behalf of the purchasers – see Clause 13. 1. nowhere was he appointed as their agent to deal with their funds. So again the funds he dealt with could not have been proceeds from that agreement. In the premises I find that the 1st Respondent has not given a plausible explanation for the source of funds found in his account. He has not, in other words, discharged the evidential burden placed upon him by Section 112 of the Evidence Act.

52. The facts and circumstances of this case are distinguishable from the case of Assets Recovery Agency v Bala (Anti-Corruption and Economic Crimes Civil Suit E005 of 2021) [2021] KEHC 11829 (KLR) because in that case the preserved funds were found in the Respondent’s physical possession at the airport Section 12 of the Proceeds of Crime and Anti-Money Laundering Act requires that such funds should have been declared at the port of departure which the Respondent had done and so this court found that for the Applicant to have succeeded it ought to have adduced evidence to prove that the funds were tainted.

53. It is my finding that in this case the Applicant has proved on a balance of probabilities that the Respondents had funds in their accounts which could not be explained other than on the basis that it was the proceeds of a money laundering scheme. The income and capital gains accruing from the funds are also proceeds of crime.

54. In the upshot I find that the Applicant has proved its case on a balance of probabilities and accordingly I enter judgment for the applicant against the Respondents and grant orders as follows: -1. That an order be and is hereby issued declaring that the funds held in the Respondents' bank accounts as listed here below are proceeds of crime liable for forfeiture to the Applicant;iv.Kshs. 145,235. 06 held in account No. xxxx at Diamond Trust Bank Limited in the name of Anton Ryan Cornelius.v.USD 308,332. 80 held in account number xxxx at Diamond Trust Bank Limited in the name of Anton Ryan Cornelius.vi.USD 40,680. 16 held in Account number xxxx at Diamond Trust Bank Limited in the name of African Confidence Limited.2. That an order be and is hereby issued for forfeiture of the funds held in the accounts in Order 1 above to the Assets Recovery Agency on behalf of the Government.3. That an order be and is hereby issued that the said funds be transferred to the Applicant's Deposit Account for recovered criminal assets fund, account No. xxxx at Kenya Commercial Bank.4. That the costs of these proceedings shall be borne by the Respondents.Orders accordingly.

DATED, SIGNED AND DELIVERED VIRTUALLY ON THIS 16TH DAY OF NOVEMBER, 2023. E. MAINAJUDGE