A Nairobi court has acquitted nine of 11 suspects in a long-running cyber fraud case in which prosecutors alleged a syndicate hacked the Kenya Revenue Authority (KRA) and fraudulently obtained about Sh3.9 billion.
Milimani Chief Magistrate Carolyne Nyaguthii Mugo, in a ruling delivered on August 11, found that the prosecution had failed to establish a prima facie case against most of the accused persons.
The decision brings a major setback to the prosecution in a case that began in 2017 and involved allegations of sophisticated cyberattacks targeting KRA’s tax systems.
The suspects had faced charges including conspiracy to commit a felony, electronic fraud, stealing by a person employed in the public service, abuse of office and illegal possession of firearms and ammunition.
Prosecutors had alleged that the group operated between March 2015 and March 2017, using sophisticated hacking techniques to siphon billions of shillings from KRA systems.
The alleged syndicate was said to have been led by former Directorate of Criminal Investigations cybercrime detective Calvin Otieno Ogalo.
The investigation began in March 2016 when KRA’s ICT team detected an anomaly in their security monitoring system.
According to testimony, a computer on the 3rd floor of Times Tower was found to be conducting unauthorized scans and transactions on KRA systems.
The matter was reported to senior management, who brought in a multi-agency team including the DCI, NSIS, and ICT Authority to investigate.
The prosecution called 15 witnesses, including KRA employees, ICT and cybersecurity officers, forensic examiners and police officers involved in the investigations and arrests.
KRA head of cybersecurity Salome Kanyugo testified that suspicious activity had been detected on computers associated with the third accused, Lucy Katilo Wamwandu, and sixth accused, Kenneth Opere Riaga.
According to her evidence, approximately Sh1.078 billion in penalties were linked to Katilo’s username, while about Sh63 million was associated with Riaga’s username.
However, during cross-examination, Kanyugo admitted that she had not recommended criminal prosecution of the two suspects but had instead recommended further investigations.
She was also unable to establish who had physically operated the computers or who had introduced the malware into the systems.
The prosecution’s case was further weakened by gaps in the handling and production of exhibits.
A firearms examiner told the court that a firearm and ammunition allegedly linked to Ogalo were in good mechanical condition.
However, the prosecution failed to establish that the items had actually been recovered from him.
Lead investigator Chief Inspector David Chemitil also conceded that he had no evidence demonstrating the alleged conspiracy, no evidence proving that Sh3.9 billion had been stolen and no evidence connecting some of the accused persons to the offences.
The court further ruled that crucial exhibits, including electronic devices and firearms, were not produced before it, while the inventory of seized items had not been signed.
On the conspiracy charge, the magistrate acquitted all 11 accused persons after finding that the prosecution had failed to demonstrate a meeting of minds or coordinated acts among them.
Ogalo, the first accused, was acquitted of all five counts against him, including the charges relating to possession of a firearm and ammunition.
The second accused, Alex Mutungi Mutuku, was also acquitted of electronic fraud after the prosecution failed to establish an evidential chain linking him to the exhibits allegedly recovered during the investigation.
However, the case against Katilo and Riaga will proceed.
The court ruled that Katilo has a case to answer on the charge of stealing by a person employed in the public service, while Riaga will be required to defend himself against the charge of abuse of office.
The fifth accused, Edward Kiprop Langat, was acquitted of the abuse of office charge, while charges against the ninth accused had earlier been withdrawn.
“On count 7, the 3rd accused has a case to answer pursuant to section 211 CPC and is hereby placed on her defense,” ruled the court.
“On count 9 the 6th Accused has a case to answer pursuant to section 211 CPC and is hereby placed on his defense.”
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