Former Budget Director Paul Mphwiyo has been arrested by fiscal police in Lilongwe in connection to his alleged involvement in the cashgate scandal.
He is accused of siphoning over K3 billion of public funds from Capitol Hill in Lilongwe.
Mphwiyo’s arrest comes three months after he was fingered out as the mastermind of the theft and money laundering of public funds amounting to K20 billion.
Director of Public Prosecutions (DPP) Mary Kachale in August told High Court in Lilongwe that Mphwiyo was the main architect of the scandal that forced the country’s main donors to pull out.
And cashgate convict, Leonard Kalonga, former assistant director of tourism at Ministry of Tourism also named Mphwiyo as the brain behind the looting of public funds at the Capital Hill.
In his affidavit, Kalonga told the High Court in Lilongwe in August that Mphwiyo was in-charge of cashgate operations, saying he “stressed that there were a lot of players involved in the system.”
“He (Mphwiyo) assured us that he was going to make everything available and he gave details on how he was going to do so, so as not to attract suspicion when it comes to single payments involving
millions ,” reads in part Kalonga’s affidavit.
He added: “He [Mphwiyo] told us to select suppliers who were in the construction industry, to avoid raising suspicions when they were drawing large sums of money”.
Kalonga said per instructions from Mphwiyo he recruited Angella Katengeza’s company, Faith Construction, among others, to share the proceeds of fraud.
Mphwiyo is a victim of the shooting outside the gate of his Area 43 residence in Lilongwe in 2013 when he was budget director in the Ministry of Finance.
Former justice minister Ralph Kasambara, Pika Manondo and McDonald Kumwembe are defending themselves on the attempted assassination of Mphwiyo.
Kachale once told the High Court in Lilongwe that Mphwiyo was key player in the looting Mafioso.
She said ‘Cashgate’ 2013 remains a blemish upon the reputation of Malawi.
“ It was a sinister conspiracy by criminals who betrayed her people in defrauding them of approximately MWK 20 billion. It was a highly organised, in part highly technical and certainly a highly placed raid on the Reserve Bank of Malawi,” Kachale said.
Mphwiyo became the youngest budget director when he was appointed by the Joyce Banda administration but an attempt on his life saw several people who were implicated in his shooting being arrested.
The gun-shot survivor was also arrested in 2014 on charges of money laundering, theft and conspiracy to defeat the course of justice while his wife was charged with money laundering and theft.
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