Ex Chase Bank chairman charged with Sh1.6bn fraud

Former Chase Bank Chair Mohammed Zafrullah Khan has been charged over a plan to defraud the lender Sh1.6 billion.

The charge comes two months after the Central Bank of Kenya moved to court painting Mr Khan as the chief architect of a massive fraud scheme that ultimately ended up with Chase Bank being placed under receivership.

He was also charged on several accounts of stealing from the bank as well as failing to flag suspicious transactions at the bank as per the Proceeds of Crime and Anti Money Laundering Act.

Mr Khan, who was nabbed by detectives from the banking fraud investigations unit on Tuesday night, pleaded not guilty to all the five criminal counts pressed against him.

Director of Public Prosecution Keriako Tobiko had ordered for his prosecution.

Mr Khan is charged with six others who did not appear before Senior Principal Magistrate Martha Mutuku.

The prosecution objected to Mr Khan’s release on bail and will spend one more night in police custody, arguing that he’s a flight risk adding that he’s still being investigated of over the loss of Sh10 billion money belonging to depositors.

Mr Khan’s lawyer Cecil Miller however objected to further detention of his client arguing he was entitled to bail and remains innocent until proven guilty.

The alleged Chase Bank fraud architect is said to have created a number of third party companies disguised as special purpose vehicles but whose benefits lined up pockets of individuals and not the lender.

According to the charge sheet presented before the court it is alleged that fraud at Chase Bank took place between August 2009 and March 2016 in which Mr Khan and six others falsified the disbursement of Sh1.6 billion through dummy companies.

Some of these companies included Ghenghis Capital, Rinascimento Global, Nine Forty Limited, Boulevard Properties and Seven Forty Investments.

Some of his transactions are also traced to purchase of property in the United States of America.

It is also in the US that he is also said to have bought his wife Shehla Khan a Ferrari Dino worth Sh45 million.

As if this was not enough, Mr Khan also bought the love of his life a Chevrolet Corvette, the limited edition at another Sh12.7 million.

Court documents show that Mr Khan over the course often years at the helm of Chase Bank raked in some Sh2.2 billion from the lender in personal expenses.

Chase Bank was placed under receivership in April 2016 and has already been put up for sale by the Central Bank of Kenya.

These included a one off bonus payment of one billion shillings which was to be staggered for a period of five years but was paid in one and a half months.

This article was published by CITIZENTV.CO.KE on June 29, 2017