Nineteen suspects linked to an alleged Sh14 billion Sacco fraud scheme have been arraigned at the Milimani Law Courts following investigations by the Directorate of Criminal Investigations.
The suspects, said to be former and current officials of a Sacco, were charged over what investigators described as a sophisticated financial fraud involving fictitious loans, manipulation of records, and diversion of members’ savings.
According to the DCI, the investigations began after the Sacco Societies Regulatory Authority filed a formal complaint seeking investigations into alleged embezzlement and financial misconduct within the cooperative institution.
DCI Uncovers Multi-Billion Fraud Scheme
Detectives attached to the DCI Headquarters Investigations Bureau launched inquiries that later uncovered what the agency termed as a coordinated fraud scheme carried out over several years.
“The investigations established that the officials acted in concert while blatantly violating their fiduciary duties,” the DCI stated.
Investigators allege that the suspects manipulated financial records, irregularly transferred members’ funds, and unlawfully disbursed loans while failing to account for billions of shillings entrusted to the Sacco.
According to detectives, the fraud involved two interconnected schemes that allegedly caused massive financial losses to members.
Fictitious Loans Worth Sh13.4 Billion
The first scheme reportedly involved manipulation of loan disbursement records between 2012 and 2021.
Investigators claim the suspects created fictitious loans amounting to more than Sh13.4 billion, allowing funds to be siphoned from the Sacco through fraudulent transactions.
The DCI says the suspects allegedly exploited their positions within the institution to approve irregular loans and conceal the transactions through falsified accounting records.
The case has raised fresh concerns over oversight and accountability within Kenya’s Sacco sector, which handles billions of shillings belonging to ordinary wananchi.
Sh750 Million Allegedly Lost Through Fake Investments
The second scheme reportedly involved the establishment of an investment cooperative society allegedly used to divert Sacco funds under the guise of land acquisition and investment opportunities in Kitengela.
According to investigators, more than Sh750 million is believed to have been misappropriated through the investment scheme.
The DCI claims the suspects used the investment entity as a vehicle to channel members’ savings into unauthorized ventures without proper approvals or accountability mechanisms.
Authorities say the alleged fraudulent dealings continued for years before regulators detected financial irregularities and sought criminal investigations.
Suspects Face Multiple Charges
The 19 accused persons now face several charges, including conspiracy to defraud, stealing by directors or officers, fraudulent false accounting, obtaining credit by false pretences, and failure to maintain proper books of accounts.
Others were also charged with operating non-core investment businesses without statutory approval.
All the suspects pleaded not guilty when they appeared before court on Tuesday.
“The court granted each suspect a bond of Sh200,000 with one surety ahead of the next mention scheduled for June 22, 2026,” the DCI confirmed.
DCI Warns Sacco Officials Against Fraud
The investigative agency said the case highlights growing concerns over financial crimes targeting cooperative societies that millions of Kenyans depend on for savings and credit facilities.
“The DCI remains steadfast in its commitment to dismantling complex financial crime networks and protecting millions of hardworking Kenyans who rely on Saccos as pillars of economic empowerment and financial security,” the agency stated.
The DCI further warned Sacco officials against abuse of office and misuse of members’ funds, emphasizing that those found engaging in fraudulent activities would face the full force of the law.
Kenyans Urged To Monitor Their Savings
The agency also encouraged members of the public to remain vigilant and report suspicious financial dealings within Saccos and other financial institutions.
Investigators advised Sacco members to actively monitor the management of their savings and demand transparency and accountability from officials entrusted with handling their funds.
According to the DCI, financial fraud within cooperative societies not only affects individual savers but also undermines confidence in institutions that play a key role in Kenya’s economy.
Kenya’s Sacco sector remains one of the country’s biggest drivers of financial inclusion, especially among low and middle-income earners who rely on cooperative societies for loans, savings, and investment opportunities.
The DCI also encouraged whistleblowers with information on financial crimes to report anonymously through its toll-free hotline and WhatsApp reporting channels.