Imperial Bank’s former managing director Abdulmalek Janmohamed ran an elaborate fraud scheme that robbed the lender of $335 million (Ks4 billion) over a period of 13 years, forcing the central bank to shut it down earlier this month.
Mr Janmohammed used a network of 20 companies and individuals to execute and cover up the mega fraud that shook Kenya’s financial services sector to the core after the regulators shut it down two weeks ago, citing risks to depositors’ funds.
Details of the fraudulent scheme have emerged from the courts where Imperial Bank directors have sued 20 companies and individuals related to Mr Janmohamed seeking to recover the colossal amount.
Imperial Bank on Tuesday filed two suits at Nairobi’s Milimani Courts revealing the anatomy of Mr Janmohammed’s fraudulent scheme, which he kept secret by falsifying the lender’s books of accounts.
Proceeds of the fraud were mainly invested in real estate properties, offering fresh insights into the role that corruption and crime plays in driving Kenya’s housing market boom.
Mr Janmohamed, who died last month, left a vast estate, including prime real estate properties, shareholding in blue chip companies and loads of cash in various banks, according to documents Imperial Bank has filed in court.
The bank on Tuesday sought and got an order freezing all the assets belonging to individuals and companies named as having participated in the fraudulent scheme.
High Court judge Fred Ochieng issued the conservatory orders freezing the assets until Thursday when the defendants are expected to tell the court why the caveat should not be retained until the matter is heard and determined.
Court documents show that Mr Janmohamed siphoned out millions of dollars from Imperial Bank and manipulated its software systems to hide it. All the irregular transactions were kept off the bank’s books and were known to a small clique of senior managers.
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