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High Court blocks ‘Cashgate’ recovery

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THE High Court in Lilongwe has dismissed the state’s application to recover stolen property from Cashgate convict Caroline Savala. The court cited late submission of the application for recovery as a major reason for the dismissal.

The Money Laundering Act stipulates that applications must be made within the year of conviction. Savala was convicted on July 17 2015 after pleading guilty to offences of stealing and laundering government money amounting to about K84.9 million.

She admitted to have benefited from the loot with about K4.3 million being her cut. The sentence, pronounced on June 27 2016, handed Savala three years imprisonment for the charge of theft and seven years imprisonment for the charge of money laundering.

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The sentences will run concurrently. The judgment gave the state liberty to commence proceedings for a confiscation order in respect of any property, in accordance with relevant Money Laundering Act sections.

The state subsequently filed an application on October 18 2016, to have the tainted property in the case confiscated.

The state also asked that a financial penalty order be made to recover stolen property from Savala, Leonard Kalonga and Florence Chatuwa in the sum of about K84.9 million.

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The state argued that in the event that there are no assets to satisfy recovery against Savala, she serves no less than 10 years imprisonment.

But Savala challenged the application on the grounds that the application is time barred under the Money Laundering Act. Lawyers for Savala also argued that the respondent filed an appeal before the Supreme Court of Appeal and therefore the state’s application was premature.

They also said an order made pursuant to such application would be unjust and unlawful since the sentence passed on Savala already took into account the fact that there would be no recovery.

The defence went on to say that there was no evidence of the existence of any tainted property as provided for in the Money Laundering Act and a prison sentence can only be imposed under Section 59 if the respondent fails to pay a substituted fine.

In response to the defence’s arguments, the state filed a new application on February 27 2017 to substitute an application that was filed on July 16 2016, which was an error as application made on such a date did not exist. The state rectified the error orally on March 23 2017.

On March 28 2017, the state filed a notice of entry of discontinuance against Kalonga as he is yet to be sentenced for his involvement in a consolidated case. Kalonga pleaded guilty to an offence covering the sum of money for which Savala was convicted of stealing and laundering.

Subsequently, on April 12 2017, the state filed an application for recovery of about K4.3 million that Savala got from the loot.

But Judge Fiona Mwale said by their own admission, state prosecutors failed to take action in time and their delay denied them the opportunity to make the only application that had the potential of enabling the recovery of government money in the case.

“The process for recovering assets for the offences under the Money Laundering Act is provided for under the same act which unfortunately cannot be invoked at this time because the time limits for bringing such an application under that Act had already elapsed when by the time the current proceedings were being brought.

“For this reason, I must at the outset rule that this application can only proceed with relation to property under the charge of theft against the respondent,” Mwale said.

She found that the state has failed to make out a case for stolen money recovery under section 148 of the Criminal Procedure and Evidence Code and the application was accordingly dismissed.

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