Police in the central Malawi district of Kasungu  arrested Sunday Oswald Lutepo, the chief suspect in the systematic plunder of government money, dubbed ‘cashgate’.

This follows Lutepo’s allegations that senior government officials were behind the scandal in which businessmen connived with civil servants and politicians to swindle government through payments for goods and services not rendered to government.

Kasungu Police Prosecutor Rodwell Ziyaya confirmed Lutepo’s arrest, saying “Mr. Lutepo has been arrested for perjury.”

In a scathing exposé published in two leading weekend papers – Malawi News and Weekend Nation, Lutepo – a former governing People’s Party executive member and one of its chief financiers, alleges that he was threatened into implicating some senior government officials in the former Joyce Banda administration while shielding others.

He said he was warned that should he refuse to play along he would be implicated in the shooting of former Budget Director Paul Mphwiyo.

“I was told in no uncertain terms that the government was after the former Minister of Justice, Ralph Kasambara. I was told that I should cooperate to ensure that Ralph Kasambara was implicated in the cashgate cases,” he writes in the letter addressed to Attorney General Kalekeni Kaphale and copied to Chief Justice Anastasia Msosa and Western embassies.

The shooting of Mphwiyo on 13 Sept. 2013 unravelled the scandal. Soon after the shooting, Banda said the youthful technocratic was targeted because he was championing her anti-corruption crusade.

Following the shooting, huge stashes of cash – in Malawi kwacha, US dollars and South African rands – started showing up in unimaginable places like car trunks, under pillows or in baby dolls.

An audit by the British audit firm Baker Tilly revealed that 13 billion Malawi kwacha (about US$30 million) was looted in the scandal.

At least 70 suspects, including Lutepo, were arrested and are currently in court answering fraud and corruption charges.

Lutepo, in the highly-circulated letter, alleges that the initial arrangement was that he would be a state witness against senior public Officers “who government believed were responsible for the massive plundering of public resources christened cashgate.”

He continues: “In mid-December, 2013, I was summoned to meet Hon. Fahad Assani (the Justice Minister) at his rural home in (the central district of) Nkhotakota. At the meeting, the minister warned me against linking cashgate to the Head of State (former president Joyce Banda), her family and/or the (then governing) Peoples Party. He claimed that my silence was instrumental in the 2014 presidential campaign.”

When contacted by the media, Assani laughed off Lutepo’s allegations, saying: “Lutepo was trying to pre-bargain for a lesser charge; these are just his imaginations.”

Attorney General Kaphale acknowledged receipt of the letter but refused to discuss its contents.

Meanwhile, Western donor nations and agencies suspended some US$150 million in budgetary support for Malawi in reaction to the scandal, the worst financial scandal to hit Malawi in its 50 years as an independent country.