Nairobi lawyer arrested after American company defrauded Ksh.182M in fake tender scam

Michael Otieno Owano, who is reportedly the head of Owano Michael & Co. Advocates, was apprehended on Monday at Milimani Law Courts after attending a separate criminal hearing. He is accused of being part of a syndicate that exploited a foreign investor through fraudulent government tenders.

The case stems from a complaint filed by the proprietor of Underground Pipeline Rehabilitation Company, an American-based firm, which alleges it was misled by a ring of scammers, including Owano, into paying millions for non-existent government contracts.

According to the complainant, who was lured to Kenya by one Alvin Alexander, purportedly the CEO of Orion AST Company, a series of meetings were held in Nairobi with individuals posing as government officials. During these meetings, the complainant was presented with three fraudulent tender documents, which seemed to offer lucrative government contracts.

The tenders in question included one for the supply, installation, and commissioning of Area Control Centre and Disaster Recovery System equipment (Tender No KCAA/032/2021-2022), another for the provision of consultancy services for the design, implementation, and maintenance of an Information Management System (Tender No ICTA/RFP/03/2022-2022), and a third for the supply, delivery, installation, and commissioning of Automatic Weather Stations (Tender No MEWNR/T/18/2021-2022).

The complainant was then directed to make payments to several law firms to secure the tenders and work permits necessary for the projects to proceed. 

The total amount transferred was USD 1,617,200 (approximately Ksh.182,743,600). 

These payments were made to four law firms: Owano Michael & Co. Advocates received USD 90,000 for legal fees related to the first two tenders; Ollando Misare & Associates, LLP received USD 30,000 in legal fees, along with USD 262,000 and USD 285,000 for bid bonds related to the third tender; Dennis Onyango & Company Associates received USD 200,200 for work permits for Orion employees; and Ouko Angado Co. Advocates received USD 750,000 for additional work permits for Orion employees.

Following the payments, the complainant claims to have been subjected to months of delays and evasion by the syndicate.

"What followed the payments were months of being taken in circles, with the once hospitable and respectable members of the syndicate blocking contact and foiling scheduled meetings. Devastated, the complainant reported the fraud with the DCI and investigations were launched," saod the DCI.

Detectives tracked Owano, who is no stranger to legal troubles related to fraud. The suspect was arrested and processed for arraignment, although he was later released on cash bail pending the approval of charges by the Office of the Director of Public Prosecutions (ODPP).

Speaking about the arrest, a DCI spokesperson noted, "This case highlights the growing risks that foreign investors face in Kenya. Fraudulent schemes targeting those unfamiliar with local systems continue to thrive, but we are committed to cracking down on such crimes."

The DCI confirmed that investigations are ongoing and that other individuals involved in the scam are being pursued.