An accountant has been arrested for allegedly masterminding a fraudulent scheme that caused a savings and credit cooperative society (Sacco) to lose more than Sh16 million.
Detectives from the Banking Fraud Investigation Unit (BFIU) nabbed the man after conducting investigations into the matter.
According to a statement released by the Directorate of Criminal Investigations, the suspect, a former accountant at the Sacco, is accused of authorising cheque transactions using members’ accounts in collusion with external accomplices.
Investigators say the fraudulent activities were carried out in phases. The Sacco initially lost Sh6,852,166 through suspicious transactions. Further investigations uncovered additional fraudulent dealings amounting to Sh9,161,000, bringing the total loss to Sh16,013,166.
Detectives established that the suspect conspired with a businessman, who is also a director of a construction company, to siphon funds from the Sacco.
Fraudulent cheques were allegedly processed and cleared before the money was diverted into accounts belonging to the businessman and other unsuspecting Sacco members.
“A total of 58 cheques were fraudulently issued, cleared, and deposited into accounts belonging to the businessman and other unsuspecting members,” the DCI said in a statement.
Forensic analysis reportedly linked forged withdrawal slips directly to the suspected mastermind, revealing how portions of the funds were siphoned off after being credited into various accounts.
Investigators further established that the cheques used in the transactions were never recorded in the Sacco’s official cheque ledger, pointing to a deliberate attempt to conceal the fraud.
The scheme is believed to have involved manipulation of internal financial controls, allowing the suspect to authorise payments without triggering immediate detection.
Authorities say the use of unsuspecting members’ accounts complicated the paper trail and delayed discovery of the irregularities.
On January 17, 2026, the businessman suspected to have collaborated in the scheme was arrested and later presented before court to face charges related to the fraudulent transactions.
On February 14, 2026, detectives arrested the alleged mastermind. He is currently in custody undergoing processing pending his arraignment in court.
The DCI, through its Banking Fraud Investigation Unit, reiterated its commitment to cracking down on fraud within financial institutions.
“The Directorate of Criminal Investigations, through its Banking Fraud Investigation Unit, remains resolute in its commitment to combating fraud within financial institutions through comprehensive intelligence-led investigations to ensure that all individuals involved in such deceptive acts are held fully accountable for their actions,” the statement read.
The case highlighted growing concerns over internal fraud within cooperative societies, which play a significant role in providing credit and savings services to millions of Kenyans.
Authorities have urged financial institutions to strengthen internal controls and conduct regular audits to safeguard members’ funds.
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