Sh12.5M Ghost Salary Scandal: Court Cracks Down on Ex-Homa Bay Clerk and Accomplices
“In my considered view, the 1st Defendant was a beneficiary, an active participant and a co-architect of the fraudulent payments,” the judge said.
In a judgment delivered on October 16, 2026, Justice Benjamin Mwikya Musyoki ordered Otieno, Lilian Achieng Aloo and David Obonyo Mireri to jointly and severally refund Sh12,571,166.50 to the government.
The court also awarded the Ethics and Anti-Corruption Commission (EACC) interest at court rates from the date the suit was filed until payment in full, together with costs.
The commission moved to court to seek recovery of the money allegedly lost through irregular payments made from the Homa Bay County Assembly between December 2015 and December 2017.
The court heard that funds were transferred from the Assembly through a suspense account into a joint Equity Bank account belonging to Achieng and Obonyo. The payments were allegedly disguised as salaries despite neither recipient being an employee of the county assembly.
Evidence presented in court showed that Achieng was a teacher employed by the Teachers Service Commission, while Obonyo worked at Equity Bank’s Homa Bay branch as a Business Growth and Development Manager.
Assembly payroll officials testified that Achieng was not employed by the county assembly, while Integrated Financial Management Information System records did not show payments or invoices in her favour.
The three defendants denied wrongdoing, arguing that the money was payment for services provided by Damila Enterprises, including catering at the funerals of three members of the Assembly.
However, the judge found that the explanation did not account for the full amount in dispute.
The defendants presented documents relating to the alleged catering services valued at Sh7,106,890, leaving Sh5,464,276.50 unexplained.
“In that regard, even if I were to accept that the payments in question went to the alleged services, the Defendants have not explained the difference of Kshs 5,464,276.50,” Justice Musyoki ruled.
The court further found that the documents presented were insufficient to establish that the claimed services had actually been rendered. Key procurement records, including evaluation committee minutes, approvals, tender documents, an approved budget and a procurement plan, were missing.
The defendants attributed the absence of some records to a raid during which they claimed documents were lost, but the explanation did not persuade the court that the payments were legitimate.
The judge placed particular responsibility on Otieno, who was the Assembly’s accounting officer and authorised the payments.
“In my considered view, the 1st Defendant was a beneficiary, an active participant and a co-architect of the fraudulent payments,” the judge said.
He further criticised the former clerk’s role in the transactions, saying: “It is deplorable and ironic that the 1st Defendant participated in fleecing the same institution which has the people’s mandate of overseeing budgets, planning, delivery and execution of the people’s aspirations by the other arm of Government.”
The court concluded that the money paid for services not rendered had to be returned to the government.
“Having found that the 2nd and 3rd Defendants received irregular payments for work not done, it is inevitable I must hold that the same should be restituted to the Government,” the judge ruled.
The judgment adds to previous asset-recovery litigation involving the former county assembly clerk, although the cases concern separate sums and transactions.
