Director of Public Prosecutions (DPP) Keriako Tobiko asked the Directorate of Criminal Investigations (DCI) to interrogate the seven and record their statements as suspects in the theft.
The seven individuals Mr Tobiko wants investigated include Robert Oscar Nyaga (branch manager), Josephine Njeri Waira (branch customers service supervisor), Martin Kagiri (operations supervisor), Meldon Onyango (relationship manager) and Nancy Njambi, the platinum manager and head of risk and compliance department.
They all worked in the bank’s KTDA Plaza branch. If charged and found guilty under the Proceeds of Crime and Anti-Money Laundering Act, they face imprisonment for a term not exceeding 14 years or a fine not exceeding Sh5 million or the amount of the value of the property involved in the offence, whichever is the higher, or to both the fine and imprisonment.
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Earlier investigations had indicated that the Sh791 million was first transferred to a Family Bank account held by a supplies company — Form Home Builders — from where it was then re-distributed to 20 accounts in different banks.
Mr Tobiko also put the bank under investigation to determine whether it complied with laws relating to money laundering and proceeds of crime. Financial institutions are required to report any transaction above $10,000 (Sh1 million) or its equivalent in any other currency as well as any complex, unusual or suspicious transaction to the Financial Reporting Centre (FRC).
“I direct that the investigations being carried out by FRC/Central Bank to determine whether there was non-compliance by Family Bank with provisions of the Central Bank Act; the Banking Act; and Proceeds of Crime and Anti-Money Laundering Act and the regulations there under be completed and the file submitted within seven days for perusal and appropriate action,” Mr Tobiko said in a letter circulated to newsrooms.
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The Proceeds of Crime and Anti-Money Laundering Act requires banks to report large volumes of money transacted and “pay attention to all unusual patterns of transactions, and to insignificant but periodic patterns of transactions which have no apparent economic or lawful purpose.”
The Act says that if convicted, a body corporate is liable “to a fine not exceeding Sh10 million or the amount of the value of the property involved in the offence, whichever is the higher.” The provision effectively means that if the bank is found liable it could slapped with a Sh791 million fine.
Reacting to Mr Tobiko’s directive, Family Bank said that it has always acted in strict adherence and in compliance with the provisions of the Central Bank Act; the Banking Act and the Proceeds of Crime and Anti-Money Laundering Act.
In a statement, the bank said that the funds were transferred into its customer accounts through Central Bank of Kenya via the real-time gross settlement systems ( RTGS) used by all banks.
The NYS scandal first came to light in June after it was reported that Sh791 million had been irregularly transferred from NYS’ Integrated Financial Management System (IFMIS) accounts to Form Home Builders.
The Banking Fraud Investigation Unit (BFIU) has already frozen the 20 accounts belonging to a number of companies, law firms and individuals believed to have received a share of the money.
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