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Kenya Man in US seeks Sh2bn for exposing bank scam

Posted by Administrator on April 19, 2012



A Kenyan who fled to the US after exposing a multi-billion-shilling bank scandal is seeking Sh1.92 billion from the government for whistleblowing.The suit is filed in a US court by Mr Peter George Odhiambo through lawyers Thomas Kipkorir Kirui and Ian P. Alberg.

The suit states that Mr Odhiambo, who was hired by Charterhouse Bank in April 2003, had noted that several accounts were operated in violation of the Income Tax Act, the Economic Crimes Act, the Central Bank Act, the Banking Act and prudential regulations.

He said he came across accounts with suspiciously large transactions in “personal” savings accounts. These transactions were hidden from bank inspectors.

The suit further states that in May 2004, Mr Odhiambo came across a KRA information reward scheme advertised in local print and online newspapers.

The authority was to pay a reward amounting to one per cent of the undisclosed taxes identified up to a maximum of Sh100,000 as well as a reward of three per cent of the taxes collected.

He subsequently made copies of activity reports for more than 800 suspicious Charterhouse customer accounts and forwarded them to KRA.

The suit claims that the KRA did not act on the information and he subsequently forwarded the same to the Kenya Anti-Corruption Commission and the Central Bank of Kenya.

In August 2004, Finance minister David Mwiraria and Ethics permanent secretary John Githongo constituted the Joint Task Force Investigating Economic Crimes by Charterhouse Bank and Related Companies.

The taskforce was to carry out investigations on the basis of information provided by Mr Odhiambo.

The taskforce reported its findings on November 30, 2004, and confirmed Mr Odhiambo’s information regarding undisclosed taxes by several of Charterhouse Bank customers.

Analysis of accounts

A full analysis of the bank’s accounts revealed that 604 of them evaded taxes with each avoiding to pay more than Sh10 million, adding to Sh21.1 billion.

The suit alleges that since Mr Odhiambo’s information had been proven to be correct, he became entitled to Sh100,000 for each account for an amount of Sh60.4 million as well as Sh1.26 billion of the amount that KRA collected on the basis of his information.

However, in a letter dated July 26, 2011, KRA acknowledged that they owed him but they included a cap of Sh1 million as reward for his role in the recovery of unassessed duties or taxes.

Source: http://www.nation.co.ke/News/Man+seeks+Sh2bn+for+exposing+bank+scam/-/1056/1390074/-/trxcrv/-/index.html


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