Kenyan tycoon Julius Mwale and his brother Kaila are facing legal action from American investors who accuse them of defrauding them of Ksh 219.3 million.
The lawsuit, which has been submitted to the United States District Court in the District of Utah, alleges that Julius and Kaila defrauded Mathew and Brooke Shaw.
It is alleged that the Shaws were deceived into believing that their funds would be allocated for geological surveys in the Democratic Republic of Congo (DRC) aimed at developing infrastructure for a battery manufacturing facility.
“The Mwales told the Shaws that the Mwales typically relied on their own assets for investment opportunities of this kind, but that they were allowing a close circle of family and friends, including the Shaws, to contribute upwards of $50 million as outside investors in the project,” court documents showed.
The court in Utah was informed that Julius had guaranteed the Shaws that their financial investment of $1.7 million would be classified as a loan, promising a secured annual return of 20 percent.
Furthermore, Julius indicated that their investment would be integrated into Tumaz and Tumaz, his parent company, which boasts a valuation of $60 billion and the potential to generate returns up to tenfold the initial investment.
However, the Shaws contends that during their visit to Kenya to assess the outcomes of their substantial investments, they discovered they had been deceived into participating in a fraudulent investment scheme.
The Shaws assert that Julius and Kaila made several misleading statements to entice them into financing the projects.
The Mwales purportedly claimed that local farmers near their African initiatives had achieved millionaire status due to the increasing value of land.
They also claimed to have constructed a luxury golf course and rental properties on land contributed by the farmers, which was said to provide the local community with significant income opportunities.
Nevertheless, the Shaws allege that the golf course remains unfinished, and the anticipated income prospects for the farmers have yet to materialize.
“Julius also showed the Shaws the rental homes he claimed to have built to generate revenue for the farmers. The homes were little more than vacant 10×10 concrete boxes with no facilities, “ said the Shaws.
The Mwale’s claimed they had constructed what they described as the world’s largest and most advanced hospital, featuring 5,000 bed, state of the art technology and advanced cancer treatment.
However, the Shaws alleged that it was incomplete, with only a single wing operational which serves as a basic clinic, primarily treating local children.
The Mwales also said they had a team, including Derek William, whom they said was a rocket scientist recruited from Boeing and the owner of KE international.
They also claimed that Christine Allyn, an accomplice, was a former personal assistant to Kofi Annan, the former United Nations Secretary-General
“Derek William, whose actual name is Derek William Knox and Christine Allyn whose actual name is Allyn knox are actually Kaila’s siblings,” said the Shaws.
In response to the Shaws’ request to withdraw their funds in September 2022, they were informed that the repayment would be postponed for a due diligence period of 60 to 90 days.
This timeframe was subsequently extended to 120 business days, establishing a new repayment deadline of March 5, 2023, which was ultimately not met.
Under a loan modification agreement between the Shaws and Kaila, Kaila agreed to repay the sum of $1.7 million in four installments over a span of seven months.
However, Kaila failed to make the final payment of $850,000, even after the Shaws consented to an extension until January 24, 2024, along with an additional fee of $20,000.
The Shaws now want to be compensated.
