18 September 2011

Kenya: Banks Lose Sh145 Million in Two Months

Police are investigating the loss of nearly Sh145 million stolen from banks by fraudsters in the last two months.

The criminals, police say, are technology-savvy as they use computer technology and the internet to steal from the banks. (READ: Woman's agony after account drained dry)

Police reports seen by the Nation show besides banks, other financial institutions and big companies have also lost huge sums of money.

In one of the cases Sh10 million was stolen from Dyer and Blair Investment Bank. In another, Co-operative Bank reported Sh5.9 million was stolen and CFC Stanbic Bank has also lost Sh47 million.

Remain at large

In all three cases, the culprits remain at large. But in a case involving loss of Sh4.9 million from Barclays Bank, police have arrested two employees who they are preparing to arraign in court.

Fifty-five cases have been heard in court on the stolen cash. Mueni Muthoka was jailed for 18 months for stealing Sh4.4 million from Barclays Bank, out of which Sh3.1 million was recovered.

A separate case saw CFC Stanbic lose Sh28 million after five people who had been charged for stealing the money were acquitted by court. The court freed them for lack of evidence.

In a separate case, Barclays Bank lost Sh53 million after Mr Stephen Maina Gichuhi, who had been charged with stealing Sh69 million, was acquitted. Sh16 million was recovered.

The court freed him saying, "the charges were not supported by evidence adduced."

Another case involving theft of Sh2.5 million from Bank of Africa, Geoffrey Kundu was sentenced two-and-half years in prison.

The Gulf African Bank also lost Sh38 million and Rashid Mwakauli was charged with three counts. He was jailed for two years for two charges and freed on the other charge.

The same bank lost Sh6.1 million in a separate case in which Mr Nathan Mulwa was acquitted.

South Nyanza Sugar Company also lost Sh8.5 million in a case involving Bank of Baroda and Kamili Packers Ltd, which is still under investigation.

Forgery and embezzlement

In total, 136 cases of fraud were reported to police in the two months and involved Sh295,969,805, which was reported stolen and Sh152,895,256 has since been recovered.

The money was lost mainly through credit card fraud, electronic fund transfers and transacting using stolen cheque leafs. Forgery and embezzlement by bank staff was also cited.

Police believe the amount reported reflect a small portion of real losses suffered since banks sometimes prefer internal disciplinary measures in cases involving employees.

In December last year Sh500 million disappeared from major financial institutions.

In another pending court case, Mr Geoffery Githaiga is charged with stealing Sh240,778 from his employer, Equity Bank. The case is scheduled for hearing on October 31.

Copyright © 2011 The Nation. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.