Senior Credit Bank managers stationed in Westlands Branch, Nairobi have been linked to a complex 1.5 billion money laundering scheme. The branch manager Nancy Kung’a and operations manager Esther Kariuki have been mentioned.
According to the allegations, the two have been working together with businessman Alfred Mola in the scam.
In the whistleblower letter dated 14/12/2022 and addressed to the Director of Criminal Investigations (DCI), Banking Fraud Investigation Unit (BFIU), Nairobi’s County Criminal Investigations officer, EACC, and Credit Bank headquarters, five accounts have been listed for having been used in the fraud scheme in the last one and a half years.
Accounts mentioned in the letter; Pefam Construction Limited (0061007000126) Westlands, Pefam Construction Limited ( 0091007317) Eldoret, Decimeg Construction Company Limited( 0061012000003) and Destiny Sprinkles Limited ( 0061006000348).
As per the whistleblower, have received suspicious funds from transfers to other persons and business accounts. The monies received have been withdrawn from Credit Bank Westland’s Branch in cash or through inward cheque payments to accomplices.
The letter claims more than Sh1.5 billion has been transacted through the mentioned accounts.
It goes on to demonstrate how the branch has been a loose end to facilitate cash payments which have been subsided by the branch manager and the operations manager for a cut of 10 percent per transaction.
The 10 percent cut has been paid in cash, Mpesa or cash to the account of the branch manager’s brother and her daughter’s account below. These are Joel Kung’a (0061019000313) and Chantal Marissa Pande (0061019000675) respectively.
The operations manager deducts the 10% cut, and cash is taken to a black Subaru KDH 001K. This is a daily routine. At times these funds are collected by the driver to Molasses further clarification from the tellers,” the letter details.
The businessman Mr. Mola is served from the branch manager’s office where everything else unfolds. “Cash is paid by tellers and packed in a black bag by the operations manager and taken to the manager’s office.”
The branch manager Nancy Kung’a has developed a 5 bedroomed mansion in Kisumu and a brand new Toyota Harrier KDK 250 L allegedly from fraud proceeds of these funds and support from Alfred Mola.
We make reference to the transactions of 17.09.2022 to prove the 10% cut. The following amounts Ksh 3,800,000 were paid to Alfred Mola and a cut of 10% 380,000 paid to Chantal Marisa Pande 0061019000675,” it states further.
From these, four accounts were paid Sh 950,000 each and these are Pefam Construction Limited, Alfred Mola, Decimeg Construction Company Limited and Destiny Sprinkles Limited which got an extra Sh 430,000 payment.
The staff wants the investigative agencies to investigate the source of funds in the account of Joel and Chantal and seek to establish if they are the ones in charge. As they seek to have investigations hastened, there’s suspicions that the officials are colluding with investigating officers to go slow on the case.
This is not the first time that the bank has been linked to fraudulent activities, in 2020, the Deputy Director, Head of Offences Against the Person Department at the Office of the Director of Public Prosecutions (DPP) Jacob Ondari ordered an investigation against Credit Bank CEO Betty Korir over alleged banking fraud.
This was after a whistle-blower associated her with money-laundering offences and illegal acquisition of property.
Ondari said in a previous letter dated May 20 seen by Kenya Insights that it was a serious complaint touching on the fraudulent acquisition of property and conflict of interest and money laundering.
The CEO is reported to have used another company to access the funds from China, which were cashed out in suspected circumstances disguised as a business loan.
The CEO is a lawyer by profession and received her appointment letter as CEO in 2017. Previously she had served as the head of Credit and deputy CEO. She had previously worked for Triodos Bank in the United Kingdom.
Credit Bank is a third-tier lender partly owned by former Finance Minister Simeon Nyachae. Top shareholders are Nyachae’s Sansora Group with a 14.96 percent stake, followed by Sanama Investment (14.34 percent), Ketan Morjaria (9.88 percent) and Jay Karia (8.61 percent).
The former cabinet minister’s wife Grace Nyachae sits on the boards of Credit Bank, Sotik Tea Company Limited and Sansora Group.
Grace served as Mzee Kenyatta’s secretary at State House in 1969.
His son Leon Nyachae sat on the boards of Credit Bank and Sansora Group and was his alternative director at Kenindia where Sansora owned a 7.9 percent stake.
Kenya is categorized by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.
Kenya remains vulnerable to money laundering, financial fraud, and terrorism financing. It is the financial hub of East Africa and is at the forefront of mobile banking. Money laundering occurs in the formal and informal sectors, deriving from domestic and foreign criminal operations. Criminal activities include transnational organized crime, cybercrime, corruption, smuggling, trade invoice manipulation, illicit trade in drugs and counterfeit goods, trade in illegal timber and charcoal, and wildlife trafficking.
Cases of internal fraud in banks have seen many Kenyans lose their depositors’ money and the CBK no longer takes such matters easily. To protect the interests of the depositors, institutions found guilty of any banking fraud are slapped heavily with fines dealing a blow to their reputation while risking a bank run.
Such cases must investigated to the end and results made public for the public’s interest and safety assurances.
Last month, nominated Senator Tabitha Mutinda petitioned the government to probe various banks on allegations of fraudulent activities.
In a statement to parliament, Mutinda asked the Standing Committee on Finance and Budget to probe the allegations.
Mutinda asked the committee to investigate allegations of fraudulent withdrawal of funds from accounts belonging to customers at various Kenyan banks.
She also asked the committee to explain measures that have been put in place by the Chief Executive Officers (CEOs) of various banks adversely mentioned in frauds involving customer accounts.
“The Governor of the Central Bank of Kenya (CBK) and the Head of the Banking Fraud Investigations Department should stem such activities that cast aspersions on the bank’s security systems,” she said.
The legislator wants the committee to outline the actions put in place, if any, by banks where similar allegation shave been raised before.
She said it will ensure customers who may have lost their monies in such fraudulent activities are compensated.
