Exposed: An elaborate cash printing cartel

BY STANDARD ON SUNDAY REPORTER

A major cash counterfeiting scandal has taken root at the lakeside city of Kisumu, with dealers claiming connection to high-profi le politicians churning out paper money that passes for genuine legal tender worth millions of shillings.

The exposure follows a two-month long dramatic but dangerous investigations by The Standard on Sunday, with the help of a well placed contact in Kisumu County. Kisumu has also morphed into a key transit and distribution hub for the counterfeit money to Uganda, Tanzania and South Sudan.

The dealers are organised into elaborate cartels controlled by very powerful people in government.

A Senator from Rift Valley and a second-term MP  from Nyanza are allegedly among those behind the illegal trade. To prove their claim, the money merchants showed our team separate photos they took with the Senator and the MP. “A very influential tycoon of Asian origin” who operates a clandestine control office near the Kisumu Aga Khan Hospital area controls the cartel, according to our sources.

“Cash counterfeiting is a grave economic crime, in fact in some of the developed countries it is next to treason. This is a crime against the people and the state,” reacts an alarmed Mwalimu Mati of Mars Group-Kenya. 

Mati warns of a dangerous spill over effect, pointing out that if people eventually lose confidence in their currency, the functioning of the country’s national economy will be affected very negatively, if not stalled altogether.

Noting that Kisumu “is only but a circulation point”, Mati warns of dire economic consequences in the very near future for the entire country.

After months of patience working closely with some two senior operators involved in the deal, during which period we tried to win their confidence, The Standard on Sunday team penetrated the cartel.

What might shock many, as our team observed, during the money-making process at some desolate and isolated pub in Migosi Estate, is that some of the materials used, including plates, ink and papers pre-marked with serial numbers, bear inscriptions of the official money minting firm, De La Rue.

Real ‘product’

And the dealers are very confident about their “product”: “Ours is not ‘fake’ money, but real money that can pass any test at the banks or anywhere,” one of them, code-named Musa, openly bragged. 

Indeed, we managed to bank three 1,000 shilling notes of the processed currency on Thursday that passed the test at a leading bank on the Kakamega-Kisumu Road.

The curious feature about the money is that all the notes printed by the dealers are dated July 16, 2010, which our source says is the latest batch released by De La Rue firm.

“Our printouts are genuine, including the serial numbers. The only difference is the printing location,” claims one of the dealers in a recorded conversation. 

Our sources claim to have contacts at De La Rue, with one of the dealers, known only as Kim, boasting that his father is an employee at the firm. Two other dealers, who claim they are former De La Rue, employees, who hinted that their internal contacts at the firm are on hefty retainers.   

We were, however, unable to independently authenticate the De La Rue trade mark labels on the printing materials or confirm claims of employees of the firm being linked to the illegal trade. We were also unable to reach De La Rue for an official reaction.

Nonetheless, the mere mention of this firm – rightly or wrongfully – sends shivers down the spine of Kisumu Town MP, Ken Obura. The politician is particularly disturbed that the money syndicate seems to be having its way in the county.  

“I am worried by the fact that these crafty cash dealers have chosen Kisumu as their operation and distribution zone,” he says.    

Part of the money printing takes place along Old Kibos Road in Migosi Estate, in Kondele and Car Wash area towards Kibos town centre. Two of our meetings with the dealers took place at Kibao Inn, a desolate and quiet place, hardly visited by patrons. We witnessed printing of the money in one of the closely guarded rooms downstairs.

Conceding that the vice is rampant, a senior police officer at Kondele Police Station confessed knowledge of the existence of the cartels. He even showed The Standard on Sunday samples of some of the printing material and fake money in their possession.

“We have the major cartel, and several small ones of individuals trying to make the extra coin. The operations are very secretive but we have occasionally managed to storm the crime scenes and secured some evidence, including printing materials,” he said.

These cartels are tightly knit and vicious and are feared to eliminate anyone who dares expose their activities. This is the danger that The Standard on Sunday team nearly found itself in. At some point, the dealers got suspicious upon noticing we were taking pictures using a mobile phone. Later that night, strangers confronted this writer as he walked to his hotel room, and threatened him with death if he did not drop the story. We reported the incident at Kondele Police Station.  

Before the confrontation, The Standard on Sunday team witnessed 10 boxes in the dealers’ hideout, which they claimed had Sh10 million. But because we were skeptical, they opened one of the boxes in which they said had Sh1 million shillings. We even touched the neatly packed cash, but were unable to verify the exact amount. Over the last week alone, they claim to have released over Sh50 million.

The cash is majorly released to Uganda, Tanzania and South Sudan economies, through avenues that our source declined to divulge. The bulk of the amount is released to the key players, the two influential politicians and the Asian tycoon. Smaller amounts of the same are released locally at night, mainly in discotheques and nightclubs. Kondele, with over 20 nightclubs on a stretch of just one kilometre, is a key target area.

Vicious cartels     

Other locations with congestion of nightclubs and pubs include Manyatta, Kibos and Otonglo area. Banks have not been left behind, with latest complaints from customers that they are losing their earnings and savings through ATMs, some of which are now spewing fake money.

Mati warns that even the dealers bragging about printing “genuine counterfeits”, will have the quality of their fake cash drop down. The net effect of this, he explains, is that the poor people as mama mbogas who deal in hard cash, and not plastic money, will be most hit.