Thursday, May 28, 2020

How Kgosi cleaned his dirty millions

Directorate of Intelligence and Security Services (DIS) former Director General, Isaac Kgosi paid his friend more than P29 million in cash from the DIS Operational Fund.

 

The cash payment sleight of hand to circumvent Public Procurement Asset Disposal Board (PPADB) requirements, laundering dirty money through Collins Newman & Co and Sadique Kebonang Attorneys trust accounts and mixing black money with clean money to conceal murky fortunes are some of Isaac Kgosi’s tricks revealed in an affidavit deposed before Lobatse High Court Judge Tebogo Tau.

 

The explosive affidavit deposed by Festus Ngadzi Matshameko of the DCEC plumbs the murky depths revealing how Isaac Kgosi operated a huge sewer pumping dirty money through legal trust accounts, real estates, cars, cattle and diluted some through legitimate loans from local banks.

 

The affidavit forms the basis for a court order issued last week by Justice Tau to the Directorate on Corruption and Economic Crime (DCEC) to seize Kgosi’s farm in Sentlhane, mansion in Phakalane Estates, cattle, vehicles and more than P500 000 in his account with Barclay Bank of Botswana.

 

Matshameko states that the money Kgosi is estimated to have embezzled “far exceed the value of the property sought to be restrained, and the politically exposed persons with whom Kgosi interacted with that allowed him to acquire his unexplained wealth raise grave concerns as to the likelihood of the property being dissipated.”

 

Matshameko did not disclose the identity of the “the politically exposed persons with whom Kgosi interacted with that allowed him to acquire his unexplained wealth”, the Sunday Standard can however reveal that besides Member of Parliament for Lobatse, Sadique Kebonang there was also former President Lt Gen Ian Khama who benefitted from Powerforce Pty (ltd) the company belonging to Nshingo Jere, Kgosi friend who was paid close to P30 million in cash from the DIS Operation Fund.

 

Jere was engaged to build Khama’s controversial holiday retreat in Mosu. In a bid to reveal Kgosi’s signature modus operandi, Matshameko stated that

 

“My preliminary investigations reveal that between 2009 and 2018, Kgosi abused his office by paying in cash, to the tune of at least P29, 497,991.90 from Operational Funds belonging to the Office of the Directorate of Intelligence and Security to Power Force (Pty)

During the immediate two weeks prior to launching these proceedings investigations revealed that works and or construction projects allocated to Power Force (Pty) Ltd were improperly awarded due to their flagrant disregard of the procurement principles and procedure for payment of government suppliers.

Kgosi, exercising his own discretion in violation of legislative controls, awarded Power Force (Pty) Ltd various works and or projects for maintenance and construction without following procurement processes under the Public Procurement and Asset Disposal Act. In most such instances, Kgosi would unilaterally decide on the need for a maintenance and works to be done and he would appoint Power Force (Pty) Ltd without determining the scope of works and without requesting for quotations from Mr Jere as reflected in the statement of Sehunelo Khunou.

I hold the preliminary view that by paying Power Force (Pty) Ltd out of the operational funds of the DIS, Kgosi was deliberately and intentionally circumventing the procurement procedures under the PPADB Act and the Public Finance Management Act.

I therefore hold a reasonable belief that Kgosi’s dealings with Power Force (Pty) Ltd constitute an offence under section 24, 24A and or 25 of the CECA in that Kgosi directly used his position as the Director General of the DIS and thereby its accounting officer, to obtain valuable consideration for his and Mr Jere’s benefit when he circumvented procurement procedure in order to ensure the direct appointment of Power Force (Pty) Ltd in the maintenance and works jobs of his office as well as privately.”

It emerges in the affidavit that Jere paid P525, 000.00 towards Kgosi’s mortgage loan for his house in Phakalane Estates. Kgosi and his wife Jennifer Seitshiro were servicing the mortgage loan from their salaries.

Matshameko however states that: “I am of the belief that the P525, 000.00 paid towards Kgosi’s mortgage loan constituted valuable consideration arising from a corrupt practice between Kgosi in favour of Mr Jere. Accordingly, the P525, 000.00 constitutes a benefit derived from a confiscation offence. It is therefore imperative that the Phakalane property be restrained while my investigations are continuing to avoid it being sold or passed on to an innocent third party and further complicating and prolonging the investigations.”

“The co-mingling of the said P525, 000.00 with the clean money from Kgosi’s and Seitshiro’s salary is consistent with the modus operandi used by Kgosi in acquisitions of his other properties. His modus operandi entails Kgosi using other people as a front to his money, whose origin is that of a suspicious transaction, back in to the financial system.

I will demonstrate below that such tactics for obscuring transactions were regularly used by Kgosi, in the acquisition of the Discovery Landrover motor vehicle registered as B 414 AXU and the Landcruiser registered as B 975 BHI for example.

I therefore aver that it is in the interests of justice for the Phakalane property to be restrained with a view to satisfying the civil penalty order against Kgosi or the forfeiture order that may be granted against the properties when investigations are complete.

It further emerges from the affidavit that another company, LT & Associates (Pty) Ltd which was engaged as the project manager for the construction of the Phakalane mansion alongside  Power Force (Pty) Ltd which was the contractor also paid P525 000 00 towards Kgosi’s mortgage under curious circumstances. The owner of LT & Associates Mr Liver Tambo dies under mysterious circumstances.

The affidavit reveals that of the P575, 000.00, paid by Powerforce, Nshingo Jere personally deposited seven of the concerned cheques totalling P205, 000.00 with Barclays Bank. It has also emerged that Power Force (Pty) Limited received part of the money from Vlatacom, the Serbian company that was awarded contracts running into hundreds of millions of Pula by the DIS under Kgosi. The company also paid more than P 1 million towards Isaac Kgosi’s purchase of Sentlhane farms.

Kgosi bought the Sentlhane farm at an auction sale that was held on May 16th, 2008 and conducted by Deputy Sheriff Ikageng Seloi.  On May 23rd, 2008 Collins Newman & Co. wrote to the bank requesting confirmation that the Bank had accepted the offer made by Kgosi of P1.1 million. On 27th May 2008 Stanbic Bank accepted Kgosi’s offer of P1.1 million as the purchase price. Investigations reveal that on May 19th, 2008, prior to the bank accepting his offer of P1.1 million, Kgosi had paid a deposit of P45 000.00 in cash and  another part payment of P39 027.50 through cheque No. 001458 was also made towards payment for the property.

No trust receipts were issued for these two payments by Collins Newman & Co law firm or the Deputy Sheriff “which is a serious statutory irregularity in terms of the Legal Practitioners Act.The origins of these deposits, amounting to P74 027.50 remains unaccounted for and unexplained”, states Matshameko.

Ongoing investigations revealed far greater anomalies pertaining to the transactions and payments of Sentlhane Farm that give rise to a suspicion that the money used to acquire the farm was derived from a serious offence and constitutes money laundering.

A search conducted on Collins Newman & Co. trust account ledgers reveals that on July 4th, 2008 the sum P400 000.00 cash was paid towards the purchase of the property under file No. 025021, relating to Stanbic Bank/Tower Properties. The ledger held by Collins New & Co under file No. 025021 reflects that the said amount was paid to the firm by Deputy Sheriff Ikageng Seloi. Upon being interviewed by the DCEC, Deputy Sherriff Ikageng Seloi acknowledges that he deposited Kgosi’s initial payments into the Collins Newman & Co. trust account, though he could not recall the exact amount. Critically however, he emphatically denies ever having received the sum of P400 000.00 from Kgosi and paying the law firm such an amount on Kgosi’s behalf.

The P400, 000.00 is reflected in the trust account ledger for the file No. 025021 but there is no corresponding trust account receipt reflecting who made the payment on behalf of Kgosi. The question arose during the investigations as to the source of these funds. Investigations revealed a system of accounts at Collins Newman & Co. through which the P400 000.00 was paid came from a contractor engaged by the DIS under questionable

Circumstances, namely a company called Vlatacom D.O.O and that the funds were used for the personal benefit of Kgosi to acquire his beneficial ownership of Sentlhane Farm.

Collins Newman & Co. also operates a Trust Account with Barclays Bank of Botswana, being account No. 02/3120054.  On July 31st, 2009 an amount of P687 281.29 was credited in to the said account under a swift payment narration indicating their source to be from Vlatacom D.O.O. The law firm’s ledgers reveal that a portion thereof was transferred (credited) into file No. 025021 as part payment for the purchase price of the Sentlhane farm that had been ostensibly bought by Kgosi.

Collins Newman & Co. maintains a trust account ledger in relation to its trust account which records the trust account holdings and transactions pertaining to each of the law firm’s clients, as required by the Legal Practitioners Act.

The firms trust account ledger reveals that the P687 281.29 was received from Vlatacom D.O.O. by the law firm and was apportioned between two recipients, both closely connected to Kgosi.

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