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Post Reply: Appellate Court Finds MozzartBet Guilty in Ksh300 Million Fraud Case

<blockquote><div class="quotetitle">Quote from <a class="profile-link highlight-moderator" href="https://lawguide.co.ke/understanding-law/legal-forum/profile/lawyer/">Lawyer</a> on June 20, 2025, 10:01 am</div><div id="pl-6479"  class="panel-layout" ><div id="pg-6479-0"  class="panel-grid panel-no-style" ><div id="pgc-6479-0-0"  class="panel-grid-cell"  data-weight="1" ><div id="panel-6479-0-0-0" class="so-panel widget widget_sow-editor panel-first-child panel-last-child" data-index="0" data-style="{&quot;background_image_attachment&quot;:false,&quot;background_display&quot;:&quot;tile&quot;,&quot;background_image_size&quot;:&quot;full&quot;,&quot;background_image_opacity&quot;:&quot;100&quot;,&quot;border_thickness&quot;:&quot;1px&quot;}" ><div
			
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	<p dir="ltr" data-pm-slice="0 0 []">In a landmark decision, the Court of Appeal has upheld a High Court ruling that found betting firm MozzartBet Kenya Limited guilty of involvement in a sophisticated money-laundering scheme, resulting in the forfeiture of over Ksh300 million (approximately $2.6 million USD) to the state. The ruling, delivered by Appellate Judges Francis Toiyott, Fred Ochieng, and Aggrey Muchelule, marks a significant blow to the betting company and raises questions about the integrity of its operations in Kenya.</p>
<p dir="ltr">The case originated in 2020 when the Assets Recovery Agency (ARA) flagged suspicious transactions involving MozzartBet and a company called Kimaco Connections Ltd. Court filings revealed that MozzartBet used its M-Pesa paybill number (290059) to transfer a total of Ksh256 million to Kimaco Connections’ paybill (311372) over just five days. The transactions ranged from Ksh1.8 million to a staggering Ksh50 million in a single day, prompting the ARA to freeze the funds and launch an investigation.</p>
<p dir="ltr">The ARA argued that the funds, held in three bank accounts (Ksh251 million at Diamond Trust Bank, Ksh50 million at Co-operative Bank, and Ksh2.4 million at NCBA Bank) were proceeds of crime, not generated from MozzartBet’s gambling operations. The agency pointed to the unclear source of the funds and their rapid transfer through a web of accounts, including those linked to MozzartBet’s directors and shareholders, as evidence of a deliberate money-laundering scheme.</p>
<p dir="ltr">In April 2022, High Court Justice Esther Maina ruled that the funds were part of an elaborate money-laundering operation. She dismissed MozzartBet’s claim that the money was used to purchase customized betting software from Kimaco Connections, noting that Kimaco was a shell company incapable of delivering such services. Justice Maina highlighted that Kimaco had filed nil tax returns with the Kenya Revenue Authority (KRA), indicating it was not engaged in any legitimate business. Furthermore, the judge questioned why MozzartBet would pay a third party to procure software from a sister company, Open Skies Connections, owned by one of MozzartBet’s own directors, Emmanuel Charumbira.</p>
<p dir="ltr">Court documents also revealed that some of the funds ended up in the personal accounts of MozzartBet directors, including former MP Musa Cherutich Sirma, Branimir Melentijevic, and Emmanuel Charumbira. The ARA submitted evidence of M-Pesa and bank transactions showing that payments from Kimaco and its associated firm, Pescom Kenya, were transferred to these directors under suspicious circumstances. Justice Maina described a letter from the Directorate of Criminal Investigations (DCI) allegedly clearing MozzartBet as a “decoy,” reinforcing the court’s conclusion that the transactions were fraudulent.</p>
<p dir="ltr">MozzartBet appealed the High Court’s decision, arguing that the funds originated from its legitimate betting operations, which reportedly generated Ksh17 billion in revenue. The company claimed that Kimaco was contracted to supply software and that the ARA’s failure to enjoin MozzartBet directly in the proceedings indicated a lack of evidence. However, the Court of Appeal dismissed these arguments in a ruling on May 27, 2025.</p>
<p dir="ltr">The appellate judges found that MozzartBet failed to explain its financial dealings with Kimaco, which lacked the capacity to deliver the alleged software. They noted that Kimaco’s payments to MozzartBet directors, including invoices worth thousands of dollars to Melentijevic for supposed software services, lacked credible documentation. The judges invoked a vivid metaphor in their ruling: “If it walks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck,” emphasizing the suspicious nature of the transactions. The court concluded that the evidence met the statutory threshold to implicate MozzartBet in money laundering, denying the company protection as an innocent third party.</p>
<p dir="ltr">The ruling has significant consequences for MozzartBet and its leadership. The forfeiture of Ksh300 million is a substantial financial hit for the company, which is already under scrutiny for alleged tax evasion and illicit transfers to foreign accounts. The Financial Reporting Centre (FRC) and the DCI have expanded their investigations, focusing on MozzartBet’s country manager Sasa Krneta, deputy Loncar Koviljka, Branimir Melentijevic, and Emmanuel Charumbira. There are also reports of potential deportation proceedings against the company’s foreign directors, following a petition by the Kenyan Allies Group to Interior Cabinet Secretary Fred Matiang’i in 2022.</p>
<p dir="ltr">The case has also drawn attention to the Betting Control and Licensing Board (BCLB), with allegations of complicity in overlooking irregularities in the betting industry. Critics argue that the BCLB’s failure to regulate companies like MozzartBet has enabled financial misconduct.</p>
<p dir="ltr">MozzartBet has maintained that the funds were legitimate contributions from its shareholders and intended for software procurement. The company has also engaged in public relations efforts, including high-profile donations to health facilities and sports sponsorships, to repair its tarnished image. However, these efforts have been met with skepticism, with critics alleging that the donations, such as medical equipment to Pumwani Maternity Hospital and sponsorships like Ksh20 million to Kakamega Homeboyz FC, are attempts to mask illicit activities.</p>
<p dir="ltr">Public sentiment has turned increasingly negative, with social media platforms buzzing with accusations of MozzartBet manipulating betting results and failing to pay out winnings. In November 2022, the company faced backlash for allegedly altering World Cup betting outcomes, further eroding trust among Kenyan bettors.</p>
<p dir="ltr">This case underscores the growing concern over financial misconduct in Kenya’s betting industry, which has seen rapid growth in recent years. The use of mobile money platforms like M-Pesa to facilitate large-scale transactions has raised red flags, as companies exploit these services to evade Central Bank of Kenya regulations. The ARA’s success in this case may set a precedent for stricter oversight of betting firms and their financial operations.</p>
<p dir="ltr">As investigations continue, the MozzartBet case serves as a cautionary tale for betting companies operating in Kenya. The government’s crackdown on money laundering and tax evasion signals a commitment to cleaning up the industry, but it also highlights the challenges of regulating a sector prone to financial opacity.</p>
<p dir="ltr">For now, MozzartBet faces an uphill battle to restore its reputation and navigate ongoing legal and regulatory challenges. The public and authorities alike will be watching closely as the fallout from this ruling unfolds.</p>
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