Chase Bank Fraud: Former Chairman Mohammed Zafrullah Khan Charged

Chase Bank Fraud – Former Chase Bank Chairman Mohammed Zafrullah Khan has been charged with KSh 1.6 billion fraud.

Mr. Khan was charged on several accounts of stealing from the bank as well as failing to flag suspicious transactions. This is according to the Crime and Anti Money Laundering Act.

The charges come barely two months after the Central Bank of Kenya identified the former chairman as the man behind the massive fraud scheme that led the bank to be placed under receivership.

Keriako Tobiko, the Director of Public Prosecution ordered for Mr. Khan’s prosecution.

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Khan was arrested by detectives from the banking fraud investigations unit on Tuesday night. He pleaded not guilty to all five criminal charges against him.

Six others are also said to have been charged alongside the former Chase Bank chairman but did not appear before Senior Principal Magistrate Martha Mutuku.

Following his plea, the issue of bail was debated with the prosecution objecting to Mr. Khan’s release arguing that he is a flight risk. They also added that he is still being investigated for the loss of Sh10 billion belonging to depositors.

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

The alleged mastermind of the Chase Bank fraud is said to have created a number of third party/dummy companies which were disguised as special purpose vehicles. The benefits from these SPVs (Sh1.6 billion) then lined up pockets of individuals and not the lender.

These actions were carried out between August 2009 and March 2016 according to court documents. It also identified Ghenghis Capital, Rinascimento Global, Nine Forty Limited, Boulevard Properties and Seven Forty Investments as some of these companies.

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Transactions directly from such companies have been traced to purchase of property in the United States of America. That was where Mr. Khan was said to have bought his wife Shehla Khan a Ferrari Dino worth Sh45 million.

He also bought her a limited edition Chevrolet Corvette worth Sh12.7 million.

The charge sheet also shows that Mr. Khan raked in some Sh2.2 billion from the lender in personal expenses during his time at the helm of the bank.

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