The Asset Recovery Authority (ARA) of Kenya saw an opportunity when Jeffrey Sila Ndungi was imprisoned in the United States for his alleged involvement in a hacking syndicate.
In 2021, the ARA initiated a case before the anti-corruption High Court, seeking to forfeit to the government Sh14 million held in ABSA Bank Kenya. The agency presented the judgment and court documents from the United States as evidence, arguing that Ndungi had received over Sh50 million in illegal funds. However, a critical oversight by the ARA ultimately led to a ruling in Ndungi’s favour. Justice Esther Maina ordered the release of the frozen funds, citing the ARA’s failure to provide a satisfactory explanation regarding the source and validity of the information they relied upon.
Furthermore, it remained unclear whether the ARA was acting on behalf of the Kenyan government or in response to a request from the American authorities. Ndungi, who had been sentenced in the United States for his alleged involvement in a scheme that defrauded deceased pensioners, portrayed himself as a successful entrepreneur with interests in aviation, financial markets, and cargo forwarding. He claimed to own aircraft rented for commercial and training purposes, as well as trucks operated under the company Digital Cargo Forwarders Ltd.
Additionally, Ndungi asserted that he had invested in money markets through Genghis Capital and lent money to relatives and friends who would repay him by depositing funds directly into his accounts.
While Ndungi admitted to being apprehended in the United States in 2016 with a check amounting to $76,592.86, leading to his conviction, he argued that he was never able to cash the check successfully. He claimed that no evidence proved that he had stolen from the US. Ndungi contended that he was initially convicted by the circuit court but was subsequently acquitted after appealing. The case stemmed from an investigation by the Internal Revenue Service (IRS) into a fraudulent tax refund check scheme believed to be operated from Kenya.
Lydia Breaux, a US-based accomplice, confessed to an undercover IRS agent that Ndungi had entered the US from Kenya with a large tax refund check that needed to be cashed. During a meeting at a restaurant in Dallas, Texas, Ndungi showed the agent a picture of the check made out to a deceased individual named Cynthia Short and offered to provide a counterfeit driver’s license in her name. In 2016, the IRS agent purchased a check worth Sh4.8 million from Ndungi, who also offered to create a well-designed number plate for the agent upon payment.
Ndungi even emailed the agent a fake driver’s license as promised. He was subsequently arrested and sentenced to 10 years in prison, but he successfully appealed the conviction, and a panel of three judges unanimously agreed that there was insufficient evidence to prove his guilt, ordering a re-sentencing.
