The Directorate of Criminal Investigations has uncovered a high-level syndicate of suspected fraudsters believed to have obtained close to Sh500 million through Safaricom-provided loan service.
Safaricom, through Fuliza's overdraft service, enables customers to complete their MPESA transactions even when they do not have enough funds in their M-PESA account.
The giant telco allegedly lost the money in a well-coordinated scheme by eight suspects based in Nakuru and Trans-Nzoia counties.
Seven of the suspects were arrested at an apartment in Kiamunyi, while the suspected mastermind was arrested in Kitale, Trans-Nzoia following an operation by officers.
The suspects, aged between 24 and 30 years old, were found in possession of thousands of Safaricom and Airtel SIM cards.
Detectives said the suspects were using fraudulently generated identity card numbers to register the SIM cards before proceeding to borrow money through the application.
Investigations were launched after a report was filed to the Banking Fraud Investigations Unit (BFIU) in August 2022, after Fuliza managers detected an unusual spike in Fuliza loan uptakes.
"The uptakes were way above their performance scale and the borrowers were not repaying the loans," DCI said.
Sleuths from BFIU said in January 2022, over 123,000 new mobile phone numbers opted into Fuliza and took up loans.
Thereafter, the SIM cards were either fraudulently vacated or switched off and efforts to reach the customers turned futile.
Further investigations established that the SIM cards had been registered fraudulently by one of the suspects.
Detectives believe he had access to the National Registration Bureau database, where he developed falsified IDs used in the fraud.
Preliminary investigations indicate that after developing the numbers and registering the lines, he would sell them to his accomplices based in Nakuru who would then perpetuate the fraud.
Further, detectives found out that some of the cards had been registered as Safaricom agents where the borrowed funds would be deposited to personal bank accounts belonging to the individuals, disguised as M Pesa float.
"The suspects would initially borrow money and repay thereby improving their credit scores until the SIM cards achieved their limits when they would borrow for the last time before disposing of the SIM card," DCI said.
The Directorate added that one ID would be used to register five SIM cards.
The suspects in Kiamunyi, had, through the alleged fraud, bought two brand new Subarus, a Toyota Mark X, a Toyota Probox and two motorbikes.
Detectives recovered 14 mobicom phones used in registering M Pesa user SIM cards, six laptops, over 40 mobile phones, seven routers and assorted Safaricom lines.
They also found over 1000 Safaricom subscribers' registration forms, over 200 ATM cards from all major banks and car agreements among other exhibits.
Detectives are currently interrogating the suspects for more insights into the fraud before arraigning them in court.
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