DCI detectives arrest 8 suspects in connection with Sh500m Fuliza fraud

DCI headquarters along Kiambu road, Nairobi. [File, Standard]

Detectives of the Directorate of Criminal Investigations (DCI) have arrested eight suspects believed to be behind a Sh500 million fraud on Fuliza overdraft service.

In a statement on its Twitter page, DCI said the detectives uncovered a high level syndicate where scammers obtained close to Sh500 million through a popular mobile phone platform supported by mobile communication service provider, Safaricom.

"The service provider through its Fuliza overdraft service where customers can complete their MPESA transactions even when they do not have enough funds in their M-PESA account, lost the money in a well coordinated scheme by eight young men based in Nakuru and Trans-Nzoia counties," the statement read in part.

According to DCI, the eight suspects who were found in possession of thousands of Safaricom and Airtel SIM cards were using fraudulently generated identity cards numbers to register the SIM cards before proceeding to borrow money through the application.

"Detectives began investigations into this well choreographed fraud after a report was filled to the Banking Fraud Investigations Unit (BFIU) in August 2022, after the managers of the fund detected an unusual spike in Fuliza loan uptakes that were way above their performance scale and the borrowers were not repaying the loans," the statement read.

According to sleuths from BFIU, over 123,000 new mobile phone numbers opted into fuliza and took up loans in January 2022. Thereafter, the SIM cards were either fraudulently vacated or switched off and efforts to reach the customers turned futile.

"It is after further investigations that detectives realized that the SIM cards had been registered fraudulently by one of the suspects, who is suspected to have access to the National Registration Bureau database, where he develops falsified identity numbers used in the high profile 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, the detectives uncovered that some of the lines had been registered as Safaricom agents where the borrowed funds would be deposited to personal bank accounts belonging to the individuals, disguised as Mpesa float," the statement read.

DCI further said that 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 the SIM card.

"One identity card would be used to register 5 lines in the daring SIM scam perpetuated by the young men, aged between 24-30 years. The suspects who live large in an apartment at Kiamunyi, have through their craft acquired 2 brand new Subarus, one Toyota Mark X, a Toyota Probox and two motorbikes for their ease of movement.

During the operation, the detectives recovered 14 mobicom phones used in registering MPESA user SIM cards, 6laptops over 40 mobile phones, 7 routers, assorted Safaricom lines, over 1000 Safaricom subscribers registration forms, over 200 ATM cards from all major banks, car agreements among other exhibits. Detectives are currently interrogating the suspects for more insights into the high level fraud before arraigning them in court." Read the statement.