DPP Approves Charges Against 5 Suspects Linked to Ksh3.9 Billion VAT Fraud Scheme

The Director of Public Prosecutions (DPP) Renson Ingonga has approved charges against five suspects and 12 companies linked to an alleged scheme to defraud the government of Ksh3.9 billion in Value Added Tax (VAT).

In a statement on Thursday, October 15, the Office of the Director of Public Prosecutions (ODPP) said the decision follows joint investigations and a review of 70 inquiry files by the office in collaboration with the Kenya Revenue Authority (KRA).

“The Director of Public Prosecutions (DPP) has approved charges against five (5) individuals and twelve (12) companies linked to an alleged scheme to defraud the Government of approximately Ksh3.9 billion in Value Added Tax (VAT),” read the statement. 

According to the ODPP, investigations revealed that a network of companies, commonly known as ‘missing traders’, was allegedly used to generate fictitious transactions and electronic tax invoices.

The fraudulent invoices were subsequently used by other businesses to unlawfully claim VAT refunds or reduce their tax liability, despite no genuine purchases having been made. 

“Investigations revealed that a network of companies, commonly referred to as “missing traders,” was used to generate fictitious transactions and electronic tax invoices,” the ODPP stated. 

The five individual linked to the alleged scheme include Henry Ateka Nyabwari, James Ojiambo Nyengenye, Amisi Zamda, Frank Nyabwari and Hesbon Onyoni. 

The suspects are alleged to have been involved in registering 70 companies that were instrumental in executing the scheme. 

DPP Ingonga approved prosecution in 36 cases involving transactions valued at approximately Ksh3.22 billion that resulted to an alleged VAT loss of about Ksh518 million.

“Upon review of the files, the DPP approved prosecution in thirty-six (36) cases involving transactions valued at approximately Ksh3.22 billion, resulting in an alleged VAT loss of about Ksh518 million,” ODPP added. 

Six cases have been prioritized for immediate prosecution, with a VAT implication of about Ksh17 million.

The cases involve various companies, including: Renova Limited, Larigi Enterprises, Njemtar Agencies and Jeflar Construction Company.

Others are, Namtek Transporters Company Limited, Jawari General Supplies and Tekaza Investment & General Supplies. 

"The remaining files will be registered in court in due course, and the suspects involved therein will be charged accordingly," ODPP further said. 

This comes a month after the DPP approved graft-related charges against former Sports Principal Secretary Peter Kirimi Kaberia and nine other suspects over alleged misappropriation of Ksh330 million allocated for hosting the Africa Nations Championship (CHAN). 

In a statement on Tuesday, September 8, the ODPP said Kaberia will be charged alongside four former government officials and five businessmen.

The other suspects include: Stephen Njoroge Muthuma, Harun Chebet Komen, Enock Ondwari Onditi, John Kiende Ruga, Marcos Gonzalez Puente, Samuel Mbaa Njoroge, Kitheka Muema, Anthony Mwangi Kimanthi and Ephrahim Kinyua Muchangi. 

According to the ODPP, the suspects misappropriated funds that had been allocated for Kenya’s preparations to host the 2018 CHAN tournament.

“The Director of Public Prosecutions (DPP) has approved graft-related charges against former Sports Principal Secretary, Amb. Peter Kirimi Kaberia, alongside four former government officials and five businessmen, in connection with the alleged misappropriation of Ksh.330 million allocated for Kenya’s preparations to host the 2018 Africa Nations Championship (CHAN),” read the statement.