Betting firm MozzartBet is about to take a significant financial hit. The company is to be stripped of Sh300 million in a ruling by the High Court. According to a 2-year investigation, the money was part of a laundering scheme. Justice Esther Maina has ruled that the cash will be forfeited to the government.
A long-running investigation revealed a complicated scheme. According to a report, the plan started with money being sent to Kimaco Connections. Payments were made of between Sh50 million and SH1.8 million, coming to a total of Sh256 million over 5 days. The transactions were spotted and marked as suspicious by the Assets Recovery Agency (ARA.) Soon after the initial flagging, a report was filed, the accounts were frozen, and the money was moved to Co-Operative Bank. The investigation was launched immediately, with the ruling now made official.
Betting operator, MozzartBet, in Kenya claimed that the cash was part of purchasing IT Software. The Judge did not believe the hollow excuse.
Caught Red Handed
According to the Judge, the company had no reason to use a third party to purchase the software. This is especially since the purchase was being made from a sister organisation. Kimaco Connections is owned by MozzartBet.
MozzartBet directors insisted that the transaction was under contractual obligation. No contracts were produced to back up the story. The Judge concluded that the only reason the transactions were made was to launder funds illegally.
More so, the Judge noted some of the funds landed up in the pockets of MozzartBet directors. Plus, no amount was filed with the Kenya Revenue Authority, further pointing to the fraudulent nature of the business. There is little question that the betting company was trying to evade the law.
More details reveal that the cash was initially banked at Co-Operative Bank. It was then moved to other companies connected to MozzartBet directors and shareholders. Some of the companies to receive money include Mid Logistics and MozzartBet Africa. After this secondary distribution, the transactions were flagged by the ARA.
Seeing Through the Lies
The ARA explained that the initial transfers from MozzartBet Kenya to Kimaco Connections were a rouse. An ARA spokesperson elaborated that the transfers were purposefully segmented to avoid the reporting threshold. Since each transfer was below a certain amount, the fraudsters believed that the Central Bank of Kenya would not notice.
In more detail, The Central Bank does not need a declaration of the source of funds under a certain amount. But this does not mean that the ARA isn’t still watching closely. The MozzartBet directors believed they would escape the law but gave investigators all the proof they needed. The investigation may have taken time, but the guilty parties have finally been brought to justice.
It isn’t clear what further steps will be taken, but for now, the company will be stripped of the Sh300 million. This will undoubtedly make other companies in Kenya think twice about trying to cheat the government.