Couple seeks to access bank accounts in probe on Sh200m US federal scam

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A court battle has erupted between the  Asset Recovery Agency (ARA), Directorate of Criminal Investigations (DCI) and a couple over more than Sh200 million claimed to have been siphoned from the US Federal Student Aid Programme.

The agencies moved to the magistrate’s court seeking to block Michael Machimbo and Glory Kithure from withdrawing or transacting on a Binance cryptocurrency account.

They also obtained orders in relation to their two vehicles and a property in Kajiado County, arguing that they are investigating the source of the money.

In total, ARA managed to immobilise 20 accounts, including Machimbo and Kithure’s bank accounts, Binance and mobile money.

At a lower court, the lead investigator said they suspected the money in the couple’s accounts was the proceeds of crime.

The prosecution said that the Federal Bureau of Investigation was the complainant, and their interest was in relation to nine crypto accounts. They focused on Binance Holding Ltd, Nest Exchange Ltd, Nest Clearing and Custody Ltd and Nest Trading Ltd.

“The interested parties herein were suspected of fraudulently using US Social Security numbers to obtain grants from the federal student aid programme and subsequently laundering the funds through virtual assets,” the court was told.

The DCI asked the court for 90 days to investigate the source of the money.

But Machimbo and his wife have now moved to the High Court, accusing the investigative agencies of abuse of power. They have also roped in seven banks as interested parties.

According to the two, the freezing of their accounts had collapsed their livelihood.

They denied the claims, adding that they are just crypto traders.

They alleged that there are overlapping orders from the lower court, with Principal Magistrate Paul Mutai granting ARA 30 days extension, while his colleague Rose Ndombi issued a 90-day extension, then varied the orders on June 11, allowing them to partially access the virtual money.

On the other hand, they claimed that there are order from Chief Magistrate Harrison Barasa extending the freeze by 21 days.

According to the couple,  ARA and DCI are on a fishing expedition. They argued that there is no evidence to show that the US government, citizens or agencies have filed a formal complaint about them.

They say the investigations are based on suspicion, and the case raises serious questions on privacy, legality, due process and fair administrative action.

They want the court to unfreeze the accounts. [Kam