Kenya: 19 Officials Charged in Sh14bn Sacco Scandal Over Alleged Decade-Long Fraud

NAIROBI — Nineteen individuals have been arraigned in connection with a suspected Sh14 billion fraud scheme involving a major Savings and Credit Cooperative (Sacco), in a case that has once again spotlighted governance and accountability risks within Kenya's cooperative sector.

Detectives from the Directorate of Criminal Investigations (DCI) brought the suspects before the Milimani Law Courts following investigations triggered by a complaint from the Sacco Societies Regulatory Authority, which raised concerns over alleged financial irregularities and possible embezzlement of members' funds.

According to investigators, preliminary findings point to a long-running scheme in which Sacco officials allegedly manipulated loan records between 2012 and 2021, resulting in fictitious loans amounting to more than Sh13.48 billion.

"The investigation unveiled a web of deceit, where Sacco officials acted in concert, blatantly violating their fiduciary duties."

"They manipulated financial records, irregularly transferred members' funds, unlawfully disbursed loans, and failed to account for significant amounts entrusted to their care."

A second alleged scheme involved the creation of a shadow investment cooperative used to channel about Sh750.7 million into questionable land and investment transactions in Kitengela.

The suspects;comprising both former and current Sacco officials,face multiple charges including conspiracy to defraud, fraudulent accounting, and failure to maintain proper financial records.

The court heard that the alleged actions were coordinated over several years, raising questions about internal controls and oversight mechanisms within the institution.

The accused, however, denied all charges when they appeared before the Milimani Law Courts and were released on a bond of Sh200,000 each with one surety.

The development come on the back of massive losses by Kenya Union of Savings and Credit Co-operatives (KUSCCO) last year where a government sponsored PwC forensic audit found that the body lost on account of embezzlement by officials.

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