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INTRODUCTION

The ta

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k f

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rce m

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n

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1h

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r

20

0

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w

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c

ti

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pl

a

n

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OBJECT

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VE

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e

l

e

arn

d

e

fined

their obj

e

cti

v

e

s

a

s

:

1

.

1

To

in

s

titut

e

an e

co

n

o

mic

crime

in

v

e

s

t

iga

ti

o

n

ag

ainst

the

COI11

J

K

ll

l

l

es

menti

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below wi

t

h a view t

o

id

e

ntif

y

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ng

p

o

ten

t

ial

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va

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i

on,

i

ll

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l,

m

o

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ey

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r

an

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f

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rs

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o

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f Bankin

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Act

w

ith

t

h

e co

nni

va

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ce

o

f

Chartcrh

o

u

s

e

Bank Ltd

,

Th

e

companie

s

arc

:

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a

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r

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& Co

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ey

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nino

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1

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s

k

e

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1

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t

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w

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r

th

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aid

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the

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in c

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tify

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b

li

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nk w

ith

the relat

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com

p

a

ni

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i

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a po

s

sible

netwo

rk

f

o

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co

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mit

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with a vi

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it

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C

Y

Th

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f

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rt

o

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the f

ol

l

ow

i

ng

s

t

eps t

o achiev

e

it

s

o

bje

c

ti

v

e

:

1

.

4

C

arri

e

d

o

u

t

a

sea

r

c

h

at

th

e Registrar

o

f

Co

mpanies

o

ffices

f

o

r d

.

c

tai

l

s

o

f

t

h

e compa

n

ies

referred

a

bove to obtain

their reg

i

st

r

atio

n

d

e

t

a

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ls

,

L

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)

1

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5

Tra

c

ed

the ph

ys

i

ca

l

addre

ss

e

s

of th

e s

ai

d co

mpan

ies

t

o establis

h th

ei

r

l

o

cati

o

n

s

.

I

.

G

Ca

rri

e

d

out a surpr

is

e

visit to Charterhouse

B

an

k

to o

b

tai

n

bank ac

c

ou

nt

d

e

ta

i

l

s

in r

espect

of various

accounts

hel

d b

y

t

he

a

bove

li

sted comp

a

n

i

e

s

a

n

d in

d

i

v

i

d

u

als

1

.

7

C

a

rri

ed

o

ut

a

surprise

visi

t

t

o t

h

e spe

cif

ie

d

comp

ar

ue

s

and ob

tained

d

oc

um

e

n

t

s

an

d

r

eco

rd

s

r

e

l

at

i

ng

to

thei

r

bu

si

n

ess

activ

i

t

i

es

fo

r

the pe

r

io

d

st

artin

g

1

st

J

a

nu

a

r

y

1999

t

o

4

th

Novembe

r

200

4

T

h

e v

i

s

it

s

to th

e co

m

pa

n

ies'

pr

c

mi

scs

and th

c ba

nk w

ere car

ri

e

d

o

ut

s

imult

ancous

l

y

.

1

.

8

Wr

o

te to the Ken

y

a Revenue

Auth

o

rit

y

and obt

a

ined

t

ax

r

ec

o

rd

s i

n r

e

sp

ec

t

of

t

he

co

mpanie

s

l

i

s

ted above

S

tart

e

d

s

i fling

t

hrou

g

h

th

e

d

o

cum

e

nts

ob

tain

e

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fr

o

m the

com

p

a

n

ies

and

the bank to tr

y

and e

s

tabl

i

s

h

a

n

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in

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id

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nc

e

o

f

V

AT

ev

a

s

i

o

n

1

.

9

S1

l

0

R

T

TERM SCOPE

Th

e

t

e

am

s

et out a

s

h

o

rt-term

objective,

which was to

try

and establi

s

h

any lik

e

lih

o

od of

VA

T

ev

a

s

ion

by th

e s

aid

c

o

mpanies

[or the p

e

riod

b

e

ginning

2

n

d

of Ma

y 200

3 to

Se

p

te

m

be

r

200

4

e

T

h

e reaso

n [

o

r thi

s s

h

o

r

t-

t

e

rm

s

c

o

p

e

was to take into

a

ccount

th

e

[ol

l

owing

fact

o

r

s:

1. To

t

a

k

e

a

dvan

t

ag

e

o

f th

e

p

e

ri

o

d Ken

y

a

A

nti

-

Corruption

C

o

mmi

ss

i

o

n

becam

e

opera

t

io

n

al

and \vi

thin

w

hi

c

h p

e

ri

o

d it

ca

n l

ega

ll

y

inve

s

tigat

e

and pr

osecute

2

.

The

(cam

app

r

eciate

d

th

a

t th

e exerc

i

se

is co

mpl

e

x

a

nd

will

t

ak

e

longe

r

t

o

c

omplete

hence it was necessa

r

y

t

o define a sho

r

t

t

e

rm

go

al f

o

r i

m

m

ediate ac

t

io

n

while

t

he

l

ong te

rm

object

i

ve

w

i

l! be pursued

syste

m

at

i

ca

ll

y

as

th

e investigatio

n

expands

3

-

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-------------------

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bank a

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2

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It i

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th

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se

dep

osi

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arc

co

mpany

inc

o

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fi

g

ure

s

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w

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abo

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under r

e

view

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from M

ay 20

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e

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ks

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uthority

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Keny

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rit

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Power

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rell1aining

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o

m

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ve

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nn

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i

o

ns

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bo

ut t

h

e two

accounts

h

e

ld in their

compan

y

's

name at c

h

a

r

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Bank

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.-

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r

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explan

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the amounts

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a

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ncome Tax on it

:

,

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repare

to c

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crime

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fr

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From documents

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fro

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r

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bulk o

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ai

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ess

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shs

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r:

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irectors

bank accounts

he

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er

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whethe

r

any company

proceeds

arc b

a

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th

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f no satisfa

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assess VAT and Income

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p

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t

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rruption

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c

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9

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t

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2003 an

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ppr

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ecessary

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p

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um

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v

ehicles

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th

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t

u

r

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n

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pos

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e

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t

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ei

r

banks

r

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ai

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pl

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t

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tr

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s

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c

t

ions

w

ith

ce

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ai

n

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ur

ea

u

s

I

II

t

ow

n

I

-

f

-

'

e

s

pecially

t

he Afro Forex B

ur

ea

u

.

)

.-

Purs

u

e ot

h

er

l

eads t

h

at w

i

I

I

emerge

Offence

l

ik

e

l

y

t

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sc

lo

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ed

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to pay

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axes cont

r

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i

o

n

45

(

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activities

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.

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r

TUS

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TT

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ESSES

L

T

O

A

scrutiny

of th

e documents

o

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ained

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m

t

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s

premi

s

es

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the

Char

te

r

ho

u

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c

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a

nk r

eve

al

e

d

the f

ol

l

owi

n

g:

;

.:

-

The compan

y

operat

e

s

a current

bank accoun

t

No

3

0

1 w

hic

h

had a ba

lanc

e

o

f

K

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4

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b

illi

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d

1\

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003

t

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ep

tem

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2

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r

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account

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o

p

e

n

e

d

in

the y

ear

200

1 but

wa

s

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isc

l

os

e

d

i

n t

h

e

off

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cial b

o

oks

o

f accounts

f

o

r the

y

ears 20

0

1 and 2

0

02

r

:

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Chartcrhousc

bank is in

c

luded

in the final accounts

f

o

r the

ye

a

r

s 2

00

3

and 20

0

..

+

I

I

·

.

.·

·

;

....

We have al

s

o discovered

that the compa

n

y's

Direct

o

rs

opera

t

e

numer

o

us

o

t

he

r

a

c

counts

wit

h

the Chartcrhouse

Bank

i

n

the f

o

rm of fixed

deposit

a

c

counts,

savings

accounts,

and

current

accounts

and

call

accounts

.

These

a

c

c

o

unts

numbering

about seve

n

ty-f

i

ve

ref

l

ec

t

hu

g

e ba

l

ances

L

I

S

t

e

p

s

n

mainin

g

t

o

b

e

und

e

rtaken

r

E

s

tabli

s

h

whe

n

the accou

nt

3

0

1

a

t

Charterhou

s

c

Bank

was inc

o

rp

o

rated

in the

officia

l

books of accounts

r

Obtain from Churtcrhousc

Bank and Barc

l

ays Bank details of oth

e

r account

s

h

e

ld

b

y

the company's

directors

and assess

whether

proceeds

from the com

p

any are

d

e

po

s

ited

in tho

s

e accounts

>

Det

e

rmine

wheth

e

r

any of the period unde

r

revi

e

w was excluded

r

A

ss

e

ss

ta

x o

n undeclared

income for the period under rcvie\'

:

;

.

...

C

harge the directors

and the c

o

mpany

with the offe

n

se of tax evasion

>

-

P

ur

s

u

e

so

urce

of imported

go

o

ds

s

old by the company

.

There

were no import

d

oc

u

me

nt

s

f

o

und in th

e

c

o

mpan

y

'

s

premise

s

.

r

Cove

r t

he

p

e

ri

od s

tart

i

n

g

fr

o

m 1

999

t

o

A

p

ril 2

00

3

r

Pur

s

ue any ot

h

er le

a

ds

7

~~

'

'

--------------

;

J

'

1

OT

I

IER

ENTITIES

f

B

ank

ac

c

o

unt

d

e

tail

s

wer

e

sought

f

or

the

follo\

\

'ing

e

n

t

ities

a

nd

b

elow

a

r

e the

obse

r

v

at

io

n

s

fr

o

m th

e

in

formati

o

n

ob

tained

fr

o

m Charterhouse

D

an

k

KARIUKI

MUIGUA.

.

\:

CO. (CLIENTS

ACCOUNTS)

Chart

e

rh

o

u

s

c

Mana

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i

r

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t

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lin

ed

t

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dge

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o

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l1

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t

i

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o

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ocumen

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wi

t

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regard

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cc

o

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cit

i

n

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a Hi

gh

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ou

rt

o

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r

,

wh

i

c

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a

i

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e

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,

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a

r

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im

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o

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an

y

inf

o

r

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ati

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with

r

eg

ard

t

o

t

h

e

a

b

o

ve

n

a

med

acco

u

nt

s

.

H

e

c

o

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y

produ

c

e

a court

o

rd

e

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c

er

tain

r

es

p

o

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e

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fr

o

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c

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s

si

n

g

t

he

inf

o

rm

a

t

io

n

with

regard

t

o

that bank account

of which

the Kenya Anti-C

o

rruption

Commis

s

i

o

n

o

r its a

g

ent

was not among

them

,

Howcver,

accordin

g

to documents

avail

e

d

fr

o

m other

s

ources

within

th

e

ta

s

k f

o

r

ce

,

o

n

e

of tile a

c

counts,

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1

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os

it

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o

unt

i

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g

t

o

K

s

h

s

.

386

,54

8,898

s

tarting

from

8

1h

Mar

c

h

2

0

04 to 1

5

1

Septcmber

2

004

.

Informatinn

fr

o

m

th

e s

am

e s

ourc

e

al

s

o

-

indicated

that

the bank

act

s

on un

s

i

g

ned

in

s

tructi

o

ns

s

upp

ose

dly

fr

o

m Kariuki

Mui

g

ua,

rai

s

ing

th

e

p

o

s

s

ibility

that th

e

in

s

tructions

arc pr

e

pared

within

th

e

bank

.

It i

s

al

s

o

b

e

liev

e

d

that the acc

o

unt

i

s

a

c

tu

a

lly

o

p

e

rated

b

y so

m

e

of the bi

g

bu

s

in

esses

in t

o

wn

b

ut

s

hi

e

ld

e

d

by the cloak of clients'

confidentiality

,

S

teps to be undertaken

S

in

ce

th

e co

urt

o

r

e

l

e

r barring a

c

ce

ss

to an

y

of Kariuki

Mui

g

U3S

acc

o

unt

s

d

oe

s n

o

t

c

ite the

Ke

n

ya

A

nti

-

C

or

rupt

io

n

C

o

mmi

ss

i

o

n

or its ag

e

nts, then the warrant to inve

s

ti

g

at

e

i

s

su

e

d

t

o

H

enry Mw

ithia

s

h

oul

d b

e

enf

o

r

ce

d.

Offenc

e

likely

to be di

s

closed

failu

r

e

(

0

pay

t

axes b

y

t

h

e c

o

mpanies

u

sing

t

his accoun

t

as

p

a

ra

lle

l

a

ccounts

contrary

t

o

s

ecti

o

n

45 (

I

) (d) of the Anti-Corruption

and Econ

o

mics

A

c

t

o

f

200

J

s

-

t

-

~

-

-

----

-

------

I

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U

~T

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is

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c

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recei

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K

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l

ay 2

003

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uge ca

s

h d

e

p

os

its

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al

s

o

r

cf1ccts huge cash withdrawals

.

I

t

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l

ie

v

ed

t

ha

t t

he

r

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ted c

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mp

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s

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c

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ea

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e

r

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.

Steps

to be undertaken

r:

Col

l

ec

t

d

ebit and c

r

edit

vo

u

c

h

e

rs

effe

c

t

ing

ent

r

ies into

t

his accoun

t

and

e

st

a

b

l

i

s

h

the so

ur

ce of

th

e fu

n

ds

r

Inter

v

i

e

w

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hart

cr

h

o

u

sc

bank of

ficials

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y

t

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c

e

th

e owne

r

o

f t

he acc

o

un

t

'

r

I

f a

case

i

s es

ta

b

li

s

h

ed

o

f

VA

T

a

nd

In

co

m

e

T

a

x

evasion,

th

e

n

charge

th

e

co

mpani

e

s

th

e

i

r

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irecto

r

s

wi

th

co

mmittin

g

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