EACC arrests Treasury officials, business owners over alleged Sh1.57bn PROFIT Programme fraud

NAIROBI, Kenya, Aug 18 — The Ethics and Anti-Corruption Commission (EACC) has arrested senior National Treasury officials and business owners over an alleged Sh1.57 billion fraud scheme involving funds meant to help small-scale farmers access affordable financing.

The anti-graft agency said nine suspects were arrested on Tuesday following investigations into the alleged fraudulent disbursement of Sh1,569,582,338.20 under the Rural Outreach of Financial Innovations and Technologies (PROFIT) Programme, implemented by the National Treasury with funding from the International Fund for Agricultural Development (IFAD).

EACC said the money was allegedly diverted to private entities for goods and services that were never supplied or rendered.

“EACC investigations established that KES 1.569 billion was fraudulently disbursed from the National Treasury Development Account to the PROFIT Programme and subsequently channeled to 23 private entities, 15 business names and eight companies, for goods and services that were never supplied or rendered,” the commission said.

The PROFIT Programme was implemented between the 2013/2014 and 2023/2024 financial years and was intended to expand access to affordable financing for small-scale farmers.

According to EACC, investigators uncovered an elaborate scheme in which programme officials allegedly used false and forged documents to account for the money.

The commission said an unauthorized bank account was also opened in the name of the PROFIT Programme at KCB, through which Sh175 million was received and allegedly laundered and embezzled.

“Investigators also established financial links between programme officials and some of the private entities that received the funds, in apparent contravention of public financial management and accountability requirements,” EACC said.

The agency said a substantial portion of the Sh175 million moved through the unauthorized account was withdrawn in cash.

The arrests followed the conclusion of investigations and the forwarding of the inquiry file to the Director of Public Prosecutions (DPP), who approved prosecution of 20 public officials, companies and company directors.

The suspects face charges including unlawful acquisition of public property, abuse of office, money laundering, acquisition of proceeds of crime and uttering false documents, among other offences.

Among those arrested are PROFIT Programme Coordinator John Ngure Kabutha, National Treasury Head of Accounting Unit Namwel Moturi Motanya and Senior Accountant John Maina Muriithi.

Also arrested were business owners and company directors including Gladys Juliet Oroni, Brian Kiprop Chepkarat, Ian Kwemoi Chepkarat, Josephat Kamau Kamoshe, James Omwodo Ndai and Jimmy Carter Odoyo Osodo.

EACC said the nine suspects are expected to be arraigned before the Milimani Law Courts on Wednesday, August 19.

The commission has also directed 11 additional suspects to present themselves at the EACC Integrity Centre in Nairobi or the nearest EACC office for processing.

They include PROFIT Programme Accountant Billy Otieno Obango, Auma Ritah Otieno, Paul Mukasiali Shilaho, Susan Wangari Gathiaka, Erick Otieno Achila, Miriam Roseline Obinda, Fredrick Nyadhe Obindah, Brown Mujenyi Agade, Hilda Ndinda Ngava, Charles Cheruiyot and Jackline Kagai Saisi.

The latest arrests widen the scope of the investigation beyond National Treasury officials to private businesses allegedly used to receive funds from the programme.

EACC said its action would not be limited to criminal prosecution, with investigators also pursuing recovery of money and assets allegedly acquired through corruption.

“In addition to the criminal proceedings, the Commission will pursue the recovery and forfeiture of public funds and assets established to have been acquired through corrupt conduct or other unlawful means,” the commission said.

EACC Chief Executive Officer Abdi Mohamud said the commission remained focused on safeguarding public resources and holding accountable those responsible for their loss or misappropriation.

“The EACC remains committed to protecting public resources and ensuring persons responsible for loss or misappropriation are held accountable,” Mohamud said.

The alleged fraud touches a programme designed to improve financial access for small-scale farmers, raising questions over the extent to which funds intended to support vulnerable rural communities were diverted during the programme’s decade-long implementation.

The suspects will have an opportunity to respond to the allegations when they appear before court.