Revealed: How criminals mint cash using phantom cheques

Beware of FRAUD: Criminals secure blank cheques for various banks which they use to withdraw money

It is Christmas Eve, and there is an atmosphere of good cheer around. Business is booming in Mombasa. Although Mohammed Abdi has no real attachment to Christmas, the infectious excitement has mellowed him out even as he hurriedly leaves his business premises and walks to the nearby mosque. As he does this, he switches off his phone.

Unknown to Mohammed, his movements are relayed to a shadowy character, some 500 kilometres away in Nairobi. The vultures are circling and have been physically and electronically tracking him.

When they strike, it is with lightning speed and military precision.

The moment he switches off his phone, upon entering the mosque, all his calls are diverted and directed to a phone being manned by an impersonator who with some degree of success can mimic him.

As he bows down in prayer, another man, a complete stranger not known to him goes to a micro-finance institution on Kenyatta Avenue in Nairobi.

The man says he is Mohammed. He has a national identity card to prove it. He purposely moves to a specific counter manned by a stone-faced teller who casually glances at the cheque and asks whether the drawer’s account has money.

Phone call

She then fills out some paperwork, and makes an obligatory phone call to the Mombasa businessman, who is in deep prayer in Mombasa. The phone is answered by the impostor who confirms that the cheque the micro-finance is about to pay is genuine.

Upon getting this confirmation, the teller feeds wads of notes into the currency counter which gives the total as Sh960,000.

With a flourish, she deducts Sh28,800 as her commission and is about to hand the amount to the bearer of the cheque but pauses and dramatically deducts another Sh10,000, which she puts in currency counter and invites the check bearer to confirm. Unseen eyes monitor the cheque man as he emerges from the building and eases into a waiting car to a joyous reception of back patting and wild laughter. Christmas to this gang of thieves has come a few hours early but it will take about a week for the crime to be detected.

Welcome to the underworld where a gang of highly specialised criminals can wipe out a company’s bank account and spend all the millions before the owners realise that they have been robbed.

After weeks of investigations, the Saturday Standard has infiltrated one of the gangs that operates in Nairobi. Their kingpin, who spots a prophetic goatee and shaves his head clean has agreed to meet us. He thinks he is talking to a messenger desperate to steal cheques from his employer, a Chinese who has a warehouse on Mombasa Road. Musa Mwago, the ring leader does the casual background check on us. In a community of fraudsters, identities and names are meaningless, for criminals acquire and shed off old names and aliases as easily as a chameleon changes its colours.

Like a street preacher who is just about to pounce on a new convert, Musa whips out a phone from his pocket and fiddles with it as he rattles out his narrative. 

“We ate this money in December. The amount, its not a small matter. Imagine Sh900,000 in one clean sweep. It is enough to keep me going until the next hit,” he says.

Triumphantly, he demonstrates his expertise.

On the screen of his phone there is a picture of the cheque worth Sh964,000. And with a sadistic smile, he explains how Mohammed discovered the loss of his money in mid-January this year. “He was so mad that he fired all his employees. He repeatedly counted all the leaves in his cheque book and there was none missing. He swore that he had not written the cheque but when he was shown a copy by the bank, he was confused. The bank produced call logs and voice recordings to prove that he had even approved payment of the cheque,” Musa adds.

Apparently, the businessman had issued a cheque to one of his suppliers in Mombasa and had trusted his messenger to take to the bank. However before banking it, an employee photographed it.

The conniving employee dispatched the image to Musa in Nairobi, who triggered a series of events that ultimately left the Mombasa tycoon poorer by almost Sh1 million.

Single leaf

And the master speaks: “Once I received the cheque, I contacted my man who works in a printing firm that is entrusted with making cheques in Nairobi’s River Road. He wanted a down payment of Sh40,000 upfront for a single leaf.” 

“Our man uses a special ink which is magnetisable (commonly known as magnetic) ink or toner.” 

Using the special ink which costs Sh60,000 a litre, according to Musa, the underworld cheque printer then deftly inserts the bank code, cheque number and drawer’s details on the blank cheque.

All these details were borrowed from the image of the cheque submitted by Mohammed’s accountant in Mombasa. The new cheque was however given new serial numbers just to confuse the account holder.

Then Musa solicited the services of one of the two masters in the city. This was a 60-year-old Kiragu who makes a living from forging signatures.

For his signature on the cheque, Kiragu was paid Sh1,000 for the five-minute job. On a good day he can sign about 10 cheques. His charges are pegged not on cheques but on the number of signatures on a leaf. If the signature is complex or of a famous person, it may cost as much as Sh10,000. His kingdom extends from Nairobi’s CBD, Kiambu, Thika to achakos. He always has 10 pens of different sizes and colours, and his terms of payment are strictly cash. Musa then went to River Road where his contacts procured a new generation identity card bearing Mohammed’s names although the picture was that of the impostor. “On December 24, last year, I and my team were at Wabera Street in Nairobi waiting for the signal from Mohammed’s accountant in Mombasa. Once he told us that his boss had entered the mosque, we moved swiftly,” Musa said.

A mobile telephone expert was tipped and aptly ‘hijacked’ Mohammed’s line just as an impostor strode in the bank and presented the cheque.

A call was made to Mohammed’s line to verify whether he had issued the cheque.

Another impostor, who had even mastered Mohammed’s manner of speaking spoke to the bank as the victim’s calls had been diverted to his line.

As a sign of goodwill and appreciation, Mohammed’s accountant was paid Sh250,000 for his role. The other conspirators got Sh150,000 each. Three members of the gang contributed Sh10,000 each, which was paid to the phone expert for his role in diverting Mohammed’s call to facilitate the theft.

Kenya Bankers Association CEO Habil Olaka said printing of cheques is a controlled activity and only accredited printers can do it. “I have not received any complaints of cloning but we do regular checks with the appointed printers to ensure they maintain high standards and controls. We have eight accredited printers,” Olaka says.

Despite the fact that inspection teams tour printing firms, criminals have infiltrated the trade and often secure blank cheques for various banks which they use to defraud unsuspecting account holders.

A bank manger who requested anonymity because of the sensitivity of the matter explained how replica cheques were used to even pay taxes by some crooked traders.

“Cloning of cheques is prevalent. We however do not talk about it to strangers because this can undermine the trust Kenyans have on banks. Some of these criminals have even perfected the art of making fake bankers drafts which they use in coning traders,” he said.

Metrolinks Director Steve Odero, whose firm handles private investigation and debt collection said he has dealt with cases of cheap cloning where people lost millions to strangers after being betrayed by their colleagues.

When we called the Bank Fraud Investigations Unit boss, Komesha Abdala, he said his unit had the mandate to deal with this category of crime.