‘Cashgate rulings clarifying money laundering law’

Legal experts in Malawi say they see increasing clarity on interpretation of the Money Laundering Act as evidenced by the recent High Court ruling in Zomba on legal process once the court convicts a Cashgate suspect on theft and money laundering charges.

Justice Redson Kapindu’s six directions delivered last week on the Oswald Lutepo case that his sentencing could continue while the State makes application for confiscation of tainted property and other pecuniary orders have excited the legal fraternity.

The Malawi Law Society (MLS) has since applauded this ruling and several others as positive developments in the money laundering law, which was enacted in 2006, but has not been widely invoked.

MLS honorary secretary Khumbo Soko said in an interview earlier this week that the Money Laundering Act, as its shortened title is known, was enacted in 2006, but before Cashgate, it had not been as widely utilised.

Said Soko: “This is most likely not because Malawians were not laundering money, but because of capacity limitations at both investigative and prosecutorial levels. Cashgate cases, however, have made it imperative for the courts to develop our common law around the statute and I must say that the progress that we are making in this regard has been rather remarkable.”

He said the pronouncements of superior courts on any statute are important because they give lower courts, the legal fraternity bar and society at large guidance, as to what Parliament intended when it enacted the law in question.

“This clarity in law is absolutely important. When a law is tested in this fashion, it also gives law reformers very clear indicators on the areas that need fixing it,” he said.

MLS described the Kapindu order as a quality ruling that had provided clarity on what was a murky area of the law.

Kapindu quashed arguments by the Director of Public Prosecutions Mary Kachale that confiscation of Lutepo’s property should precede sentencing after the magistrate’s court in Lilongwe denied the prosecution a pecuniary order in the Wyson Dzinyemba Soko case, because it came after he had been sentenced to seven years for theft and money laundering.

“Under Section 67 of the MLA [Money Laundering Act], where a person fails to comply with a pecuniary penalty order, the court may impose a prison term in default. This makes it clear that the pecuniary penalty order is part of the overall punishment that may be imposed on a convict under the MLA,” Kapindu ruled.

The offence of money laundering attracts a custodial sentence of 10 years if a person fails to comply with pecuniary penalty orders, but it does not remove the potential of the imprisonment, according to Kapindu’s ruling.

Kapindu’s interpretation of sections 35(3), 48(1) and 51(2) of the MLA, means that the court can postpone confiscation of tainted property, but during sentence, should not make any orders of payments such as fines and compensation.

“The convict cannot claim that his/her sentence should be mitigated because a confiscation order has been made or is likely to be made. Where a fine, an order of payment in lieu of confiscation and/or a pecuniary penalty order is made after sentence has already been passed, the court will take into account any punishment it may already have imposed in making these subsequent orders,” Kapindu said.

Similarly, the Supreme Court reversed bail ruling made by the High Court on Cashgate suspects who were ordered to pay large sums of money as cash or non-cash bond.

Among such suspects were Kettie Kamwangala who is facing charges of theft and money laundering K28 million, Ralph Kasambara and Lutepo.

Kamwangala was granted bail upon production of two sureties amounting to K2.5 million and non-cash bond of K50 million, but had to stay in jail for 21 days pending investigations.

It took Supreme Court judge Lovemore Chikopa to reverse the decision, saying it amounted to an effective denial of bail and sanctioning of illegal detention by a court of law.

Since Chikopa’s ruling in January last year, all Cashgate suspects have been granted bail with manageable conditions.

Since trials started last year, there have been eight convictions.

The sentences have been different depending on the court presiding over the case because Soko was sentenced to seven years imprisonment for the theft and money laundering K40 million in the magistrate’s `               court while the High Court sentenced former accounts personnel in government, Maxwell Namata, to eight years for money laundering K14 million.

So far, there are several appeals before the courts seeking the overturning or reduction of sentences. n