Running to stand still: reflections on the cashgate scandal heist in Malawi

Purpose - In September, 2013 following a police tip, a government accounts clerk was found with huge sums of cash amounting to US$300,000 in his car, and a week later, Malawi’s Budget Director (Treasury Official) was fatally shot outside his home. These two incidents unravelled what would later be famously known as the “Cashgate Scandal” that leading to revelations of fraud amounting to US$32 million, an amount representing almost 1 per cent of Malawi’s annual GDP in merely six months. As a result, donors withdrew their annual 40 per cent budgetary support. A lot of people (almost 70) in both public and private sector found with both cash in local or foreign currency were arrested. An independent audit report by Baker Tilly, a British accountancy firm, revealed that the fraud and theft was with such sophistication that cheques were issued to private companies for services that had not been rendered to government. Those cheques were cashed, and money was distributed among several people. Those arrested were charged with offences ranging from corruption, abuse of office, theft, theft by public servant, tax evasion and money laundering. This paper aims to analyse the cashgate scandal. It explores the first conviction of these cashgate case series which also happens to be the first ever conviction on money laundering offence in Malawi. It further explores the law likely to apply to the cashgate scandal case series, the opportunities that have been lost and likely stifling implications on the future of the fight against corruption and money laundering offences in Malawi. All law enforcement actors such as the prosecution, defence and the courts have that duty to clarify and implement the common interests of Malawians, namely, the prescriptive purposes of the law in accordance with the expectations of an approximate process that guarantees attainment of human good, i.e. justice. Design/methodology/approach - This paper presents the desk research of various journal articles and reports on money laundering in general and Malawi. Further, an analysis of the first money laundering conviction is presented. Findings - Malawi is still struggling with enforcement of money laundering offences. Research limitations/implications - There was no quantitative research involved. Further, being the first case for litigation and conviction, not much has come up on Malawi’s money laundering practice. Actually, this is likely to be the first article on money laundering and analysis of the cashgate heist. Social implications - The paper serves as a learning process for future prosecutions. Originality/value - The paper offers a new and novel approach to the fight against money laundering offences and organized criminality in Malawi. Before the Treza Senzani Judgment, Money Laundering Law in Malawi had never been tested before the Courts. Through an exegesis of the Malawi law as regards these offences, the paper adds value to the research and fight against money laundering. It further offers insights into legal interpretation and policy formulation that would enable law enforcement agencies in Malawi to succeed in the fight against such criminality.