Top law firms caught up in Sh450m CBA loans fraud
Mboya Wangong’u and Waiyaki Advocates, Khaemba and Khaemba Advocates and Kithi & Company Advocates make the list of law firms in the prosecutors’ crosshairs. The DCI report lays bare details of the forgery racket involving law firms, and unscrupulous businessmen that worked with internal staff to ship out the cash from the bank.
Top law firms, a senior State Counsel and renowned valuation companies have been named among suspects who forged land documents to secure five loans worth Sh449 million from CBA Bank. The 17 individuals and companies that the Directorate of Criminal Investigations wants (DCI) prosecuted for grand forgery include Edna Khaemba, a senior State counsel, lawyers George Kithi, and Gladys Mboya and Lloyd Masika, a real estate valuer.Mboya Wangong’u and Waiyaki Advocates, Khaemba and Khaemba Advocates and Kithi & Company Advocates make the list of law firms in the prosecutors’ crosshairs.The DCI wants the suspects charged with conspiracy to defraud, obtaining credit by false pretense, forgery of document of title and uttering false documents.
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The DCI report, seen by the Business Daily, lays bare details of the forgery racket involving law firms, and unscrupulous businessmen that worked with internal staff to ship out the cash from the bank.“It is evident that the directors of Ndonga Limited, Wardpa Holdings Limited and Kinjune Garden Limited, Commercial Bank of Africa Limited officials, M/s Khaemba and Advocates, the external advocates of CBA and the external valuers of CBA conspired to defraud Commercial Bank of Africa Sh449, 051,999 using forged documents,” the DCI says in the recommendation signed by Nairobi County Criminal Investigations officer Nicholas Kamwende.Also in the list of suspects are Patrick Kangethe, Edward Kangethe, George Kangethe, Margaret Kangethe, and Gladys Kangethe, the owners of companies that were used to secure the loan.The DCI says the Kangethes and their companies obtained High Court orders suspending their prosecution but it is not possible to determine whether the order has since been lifted.Stephen Warui, who was a relationship manager at CBA when the crime was committed, and valuer Mureithi Limited, are also named in the list of high-profile suspects. Ms Khaemba is said to have obtained orders stopping her prosecution and had yesterday filed a fresh suit at Nairobi’s Milimani Courts seeking orders against her prosecution in relation to the forgeries.It’s not clear why other law firms and companies recommended for prosecution had not been charged.Ms Khaemba, a senior State counsel based in Kisumu, has listed the Inspector-General of Police and her boss, the Director of Public Prosecutions (DPP), as respondents in the suit.She claims in the suit to have received information on plans to arrest and charge her with an offence that was allegedly committed before she joined the State department.Ms Khaemba, the lawyer who handled the conveyance of the titles and properties used as security when the Kangethes secured a loan from the bank, accuses the DPP of planning to charge her with the offence yet the rest of the accused are protected by court orders that suspended their prosecution pending conclusion of a case filed at the High Court.Ms Khaemba says she did the work in her capacity as a High Court advocate and was not privy to any forgeries that took place. She further claims that the lender procured services of the police to arrest her client and charged them with unfounded allegations as part of the plan to force them into accepting unfair settlement terms.Her case has, however, lifted the lid on the racket, revealing the finer details of the alleged transaction as contained in the DCI’s report.
The DCI says Ms Khaemba was at the centre of the transaction having made the bank to believe that the deal was clean until February 2016 when one of the lenders advertised plans to auction the property in their custody.CBA, upon investigations, found that the Kangethes had used fake documents to secure the loan, helped by Mr Warui, the relationship manager who introduced them as clean clients and Edna’s law firm Khaemba and Khaemba Advocates.The company at the centre of the forgery scam had proposed to purchase a property and gave a forged title as security. In one instance, Sh56 million borrowed was obtained to finance a commercial property in Nairobi’s Ngara estate, owned by a client of Khaemba and Khaemba Advocates.The security was approved by Tysons Limited, CBA’s external valuer and searches at Ministry of lands was handled by Mboya, Wangong’u and Waiyaki Advocates. Investigations found that all these were falsified and that the RTGS Transfer document for stamp duty made from Bank of Baroda by Khaemba and Khaemba Advocates was a forgery.A further loan of Sh28.8 million was advanced after the Kangethes presented a forged document and the process handled by Mr Warui, the relationship manager.It was validated by the CBA’s external valuers Llyod Masika, Tysons Limited, Mureithi Limited and external law firms of Mboya Wangong’u and Waiyaki Advocates.The racket allegedly further managed to secure a further two loans, of Sh100 million and Sh160 million, when a newspaper advert accidentally exposed the well-planned scheme.The DCI report indicates that Land ministry officials have disowned the signatures on all the documents, claiming they were forged. Ms Khaemba denies any wrongdoing arguing as a lawyer they were just handling conveyance.