Detectives from the Banking Fraud Investigation Unit in Kenya have recently unveiled an intricate cheque fraud scheme that has inflicted substantial financial losses on a local Sacco, which is a savings and credit cooperative organization. The investigation has led to the arrest of a former accountant associated with the Sacco, who is suspected of authorizing fraudulent transactions by misusing members' accounts. The total loss attributed to this fraudulent activity is reported to exceed Sh16 million, with the operation evidently executed in multiple phases.

The investigative findings suggest that the scheme involved the irregular issuance and clearance of 58 suspicious cheques. Initially, a sum of Sh6.8 million was reported lost, followed by an additional Sh9.1 million, indicating a systematic approach to stealing funds from both the Sacco and unwitting members. The police have characterized this elaborate operation as a result of both internal manipulation of Sacco accounts and collusion with external parties, raising concerns over the internal controls and oversight within such financial institutions.

With the suspect currently in custody, investigators are continuing to follow leads to uncover any other individuals involved in this fraudulent activity. This case highlights the ongoing challenges of managing financial fraud in cooperative societies and underscores the necessity for stricter regulatory measures to protect members’ savings and ensure the integrity of such institutions against internal and external threats.