Charterhouse Bank in Kenya epitomizes a grave failure of banking integrity, having operated as a conduit for massive money laundering and tax evasion schemes. Despite being a small entity, the bank orchestrated the movement of billions of shillings through fake, temporary, and nameless accounts, often layering illicit funds under the guise of legitimate business activities. Whistleblower revelations uncovered how the bank enabled major retail chains like Nakumatt to evade billions in taxes, exploiting regulatory gaps in a country then lacking robust anti-money laundering laws. This scandal not only caused significant economic losses but also exposed systemic weaknesses in financial oversight and governance, marking Charterhouse as a symbol of corruption and financial crime in Kenya’s banking history.
Charterhouse Bank in Kenya was at the center of one of the country’s largest money laundering and tax evasion scandals, involving the laundering of over $573 million (Sh64.2 billion) through fake and nameless accounts. Whistleblower Peter Odhiambo revealed a network that included major retail chains like Nakumatt and Tuskys, which used the bank to evade billions in taxes over several years. The scandal exposed serious regulatory failures by the Central Bank of Kenya, which overlooked suspicious activities for years despite numerous warning signs. Following regulatory action, the bank was placed under statutory management and eventually liquidated in 2006. The case highlights major lapses in governance, insider corruption, and the exploitation of weak AML laws in Kenya at the time, with lasting implications for financial crime enforcement in the region.
