Over 53 Kenyan companies and individuals have been exposed in a detailed leak of documents, banks’ “suspicious activity reports” dubbed the FinCEN Files submitted to the US Department of Treasury amounting to approximately over Ksh.6 trillion ( $60 billion).
The FinCEN Files are a leak of 2,657 documents, at the heart of which are 2,100 suspicious activity reports, or SARs. SARs are not evidence of wrongdoing – banks send them to the authorities if they suspect customers could be up to no good.
about 24 Kenyan financial institutions were named in the report as either beneficiaries’ banks or banks through which companies and individuals made suspicious payments from countries.
According to the International Consortium of Investigative Journalists (ICIJ) who made the documents public, most of the funds are proceeds of crime, corruption and tax evasion.
“We just looked into one company and the transactions from that one entity was Ksh.300 million, and we are looking at 53 entities, so just a rough calculation of the funds is USD 60 billion on the lower side,” Purity Ngondi who was part of the 400-member team of journalists from the ICIJ said.
In Kenya, Some of the sectors and individuals involved include oil companies, pharmaceutical and medical products companies, travel agents, online forex trading businesses, telecommunication companies, manufacturing companies, government entities and past politicians.
Senior Kenyans in power made it look like some of the illegal transactions were payments that were made in coffee exports.
“The scale at which this impacts a country like Kenya is unbelievable. You have a company that allegedly paid Ksh.300 million in coffee payments and if you look closely they are not based in Kenya and the payments are being made to a tax haven,” added Ngondi.
In one case, The New York branch of Standard Chartered, which acted as an intermediary bank, flagged payments sent to a company called SMS Ltd which the bank identified as having addresses in Kenya, Afghanistan, Uzbekistan, Russia, and Bulgaria.
Of the $14 million that SMS Ltd received between 2005 and 2013, $3.3 million was paid by Kenyan entities. More than $2 million of that was from two coffee Kenyan dealers, East African Gourmet Coffees Ltd and Servicoff Ltd.
In another case, in a suspicious activity report reviewed by Africa Uncensored, Joyce Oweya Anyumba — a 33-year-old with addresses in Buruburu, Nairobi, and Mombasa — held an account with the Barclays Bank of Kenya from 2015. Her listed line of work included interior design, curio, and African wear, according to Barclays’ report.
However, between July 2015 and October 2016, the account sent and received about 63 wire transfers totaling to $197,094.51. Anyumba received funds from banks in Qatar, the US, Australia, China, Germany and Sweden; she also wired a total of $1234.45 in small payments to individuals in the US, Australia, Canada, Sweden, China, and Singapore that the bank could not verify.
The transactions were flagged by the bank because of unidentified sources of funds, unclear economic purposes of the transactions, and potentially being third-party payments.
The justifications for the payments were descriptions such as “bill settlement”, “construction of house” and “consultation fees”, according to the bank’s report. Other payment details included “government first payment”, “gift finalization of matters discussed”, and “supplier invoice payment to be forwarded”.
One sender from Australia made 13 transfers worth almost $12,000 to Anyumba within a year. The payment details included the mysterious notes: “supplier invoice the money better come back” and “supplier invoice make good on your promise no ivor no more bullshit.” The bank noted in its report: “ivor probably meaning ivory.”
Barclays Kenya has filed a SAR on Anyumba with their local regulator and is in the process of exiting the relationship.
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]