The foreign directors of betting firm MozzartBet are at risk of being deported after the court last month found that the bookmaker was involved in a Ksh302 million money-laundering scheme.
In her ruling, Justice Esther Maina declared that the funds held in three bank accounts were proceeds of crime and should be forfeited to the government.
This followed an application from the Assets Recovery Agency (ARA), which proved beyond reasonable doubt that MozzartBet did not generate the Ksh302 million from gambling.
ARA told the court that the unclear source and wiring of the money to a web of accounts, including some owned by MozzartBet and various companies associated with directors and shareholders of the betting firm, point to a heavy scale money-laundering scheme.
But MozzartBet claimed it paid the money to acquire a customized betting software from Kimaco Connections.
Kimaco then subcontracted another firm, Open Skies Connections, to deliver the software. Incidentally, Open Skies is owned and directed by Zimbabwean Emmanuel Charumbira, a director and a shareholder of Mozzartbet.
MozzartBet M-Pesa Fraud
Court documents showed that Peter Kiilu, the owner of Kimaco Connections, wired Sh242 million to Open Skies.
ARA said MozzartBet sent a total of Ksh256 million within five days to Kimaco Connections, flagging the funds as suspicious. The funds were later moved to an account at Co-operative Bank.
From this account, Kiilu moved Ksh150 million to a fixed deposit account and left a running balance of Ksh101 million.
MozzartBet reportedly used its pay bill number 290059 to wire the funds through another pay bill number 311372 associated with Kimaco Connections.
According to ARA, the use of mobile money transfer services to transfer funds from MozzartBet and Kimaco Connections was an elaborate plan to evade Central Bank of Kenya prudential guidelines requiring an account holder to declare the source of funds.
ARA also established that the monies were later distributed to various companies associated with directors and shareholders of the betting firm.
The Agency said shareholders of MozzartBet Kenya Ltd are Loncar Koviljka, a Serbian, the aforementioned Charumbira, and Musa Sirma, a former MP.
Defending the source of the funds, MozzartBet claimed the money was contributions from its shareholders.
The money includes Ksh251 million in an account at Diamond Trust Bank, Ksh50 million at Cooperative Bank, and Ksh2.4 million at NBCA Bank.
In her ruling, Justice Maina said the money was sent to Open Skies long before the contract was signed and the money ended in the pockets of the directors of MozzartBet.
“The applicant (Assets Recovery Agency) has adduced evidence that proves that the 1st respondent (Kimaco Connections ltd) was a shell company incapable of even paying rent for the premises it occupied,” the Judge said.
Justice Maina also wondered why MozzartBet would pay a third party to procure the software from a sister company unless the intention was to launder money.
MozzartBet has returned to court seeking a suspension of the Ksh302 million forfeiture, pending the determination of the appeal.
DCI Goes After MozzartBet Directors
Meanwhile, the Financial Reporting Centre (FRC) and the Directorate of Criminal Investigations (DCI) have reportedly expanded their scope of investigations following the forfeiture in a bid to nab the directors of MozzartBet.
Nairobi Wire understands that the Executives are also being investigated for possible tax evasion and siphoning of money to tax havens.
The focus is said to be on the firm’s country manager Sasa Krneta, his deputy who is a Zimbabwean, Loncar Koviljka, Melentijevic Branimir, and Emmanuel Charumbira.
At the same time, a lobby group – Kenyan Allies Group – has petitioned Interior CS Fred Matiang’i to deport the firm’s foreign directors.
“The courts have determined that the company and the directors were actively involved in active money laundering a criminal act in the country. Kenya must not be a safe hub for criminal elements and especially at a time when we’re struggling with the heavy burden of the cost of living. Investors who want to bleed our country more must not be tolerated and we request your quickest intervention in this matter,” Kenya Allies Group wrote through their Secretary-General Mr. Dalmas Osogo.
The lobby group said it will move to court in 14 days should CS Matiang’i fail to take necessary action.