In a major bust, detectives from Kenya’s Directorate of Criminal Investigations (DCI) have apprehended eight individuals accused of defrauding Safaricom’s popular overdraft service,
Fuliza, of over Ksh.500 million. The suspects, reportedly operating a sophisticated fraud ring, orchestrated the theft over several months between 2022 and 2023.
The group was arrested after months of investigation led by the DCI’s Banking Fraud Investigations Unit (BFIU), which discovered a series of unusual financial activities tied to the Fuliza service.
Among the arrested were seven men, all aged between 24 and 30, who were captured in a rented apartment in Nakuru’s Kiamunyi neighborhood.
The alleged ringleader, Peter Gitahi, was detained separately in Kitale, Trans-Nzoia County. According to sources within the DCI, the fraud ring relied on generating fake identity card numbers to register multiple SIM cards, allowing them to take out Fuliza loans which they had no intention of repaying.
Investigators found a trove of fraudulent Safaricom and Airtel SIM cards in their possession, pointing to a systematic scheme to exploit Kenya’s leading mobile money platform.
This investigation began in August 2022 after Fuliza’s management noticed a dramatic increase in loan uptakes, especially from new users.
The number of new Fuliza accounts surged in January 2022, with over 123,000 mobile numbers joining the platform and taking out loans.
However, soon after borrowing, these numbers were either switched off or abandoned, and all attempts to trace the account holders went cold.
The BFIU, suspecting a coordinated operation, initiated a thorough probe which eventually led them to the suspects.
The DCI statement further revealed that Gitahi, the suspected mastermind, may have had unauthorized access to Kenya’s National Registration Bureau database, which he allegedly used to generate fake identity card numbers for the SIM registrations.
He then reportedly sold these fraudulent SIMs to his seven accomplices, who used them to secure loans from Fuliza, repeatedly borrowing until reaching maximum credit limits before abandoning the SIMs.
To bolster their scheme, the suspects reportedly followed a careful borrowing pattern. Initially, they borrowed and repaid small amounts, steadily building favorable credit scores that allowed them to increase their borrowing limits.
Once the SIM cards achieved their maximum loan potential, the group would make one final large withdrawal and discard the SIM card.
The DCI also noted that, in some instances, these SIM cards were registered as M-Pesa agents, enabling the suspects to deposit their loaned funds directly into personal bank accounts, disguised as business transactions.
This operation proved lucrative for the group, who allegedly used the stolen funds to acquire luxury items and assets.
Authorities have since impounded two brand-new Subaru vehicles, a Toyota Mark X, a Toyota Probox, and two motorcycles purchased with the illicit proceeds.
The arrests also uncovered a variety of equipment linked to the fraud, including 14 specialized “mobicom” devices for registering new M-Pesa SIMs, six laptops, over 40 mobile phones, seven routers, and a vast collection of Safaricom SIM cards.
Additional evidence included over 1,000 Safaricom subscriber registration forms, 200 ATM cards from major banks, vehicle sale agreements, and other documents, all pointing to an elaborate scheme.
The DCI has stated that the suspects’ methodical approach and attention to detail suggest a sophisticated understanding of Kenya’s mobile money ecosystem.
By exploiting weaknesses in the SIM registration process and taking advantage of Fuliza’s loan disbursement system, the fraud ring was able to evade detection for months.
Kenyan authorities are now working closely with Safaricom and other financial institutions to strengthen security measures against similar scams, as the case underscores vulnerabilities in digital financial services.
The suspects are expected to face multiple charges, including fraud, identity theft, and unauthorized access to personal data.
Authorities are also investigating whether other syndicates could be using similar tactics, as this case highlights the ongoing challenges Kenya faces in securing its mobile banking systems.
How is it possible that 6 Kalenjin boys defrauded Fuliza of Ksh. 448 million? Hii ni system ya majambazi! pic.twitter.com/kQLZURX3dr
— Cornelius K. Ronoh (@itskipronoh) November 14, 2024
