Nineteen suspects linked to an alleged Sh14 billion Sacco fraud scheme have been arraigned at the Milimani Law Courts following investigations by the Directorate of Criminal Investigations (DCI) into one of the country’s largest suspected financial scandals involving a savings and credit cooperative society.

The suspects, comprising former and current Sacco officials, were presented before court after detectives uncovered what investigators described as a sophisticated and long-running fraud operation involving fictitious loans, manipulated financial records and illegal diversion of members’ funds.

Probe launched after regulatory complaint

According to the DCI, investigations began after the Sacco Societies Regulatory Authority (SASRA) formally requested an inquiry into allegations of financial misconduct and embezzlement within the Sacco.

Detectives from the DCI Headquarters Investigations Bureau reportedly launched immediate investigations that exposed what authorities described as a coordinated scheme by officials acting in breach of their fiduciary responsibilities.

Investigators allege the officials manipulated financial records, irregularly transferred members’ funds, unlawfully disbursed loans and failed to account for billions of shillings entrusted to the institution.

Fake loan scheme worth billions

The investigation reportedly uncovered two major interconnected fraudulent schemes.

The first allegedly involved manipulation of loan disbursement records between 2012 and 2021, resulting in fictitious loans amounting to approximately Sh13.48 billion.

According to investigators, Sacco officials allegedly created and processed ghost loans over nearly a decade, causing massive financial losses to the institution.

Sh750 million land investment scandal

The second scheme allegedly revolved around the illegal formation and operation of an investment cooperative society used as a front to divert Sacco funds.

The DCI claims officials misappropriated more than Sh750 million under the guise of land acquisition and investment projects in Kitengela.

Authorities say the investment entity operated outside approved statutory frameworks and was allegedly used to siphon members’ savings.

Suspects face multiple charges

The suspects include Christopher Kahuno, Samuel Ndungu, John Kimani, James Kamau, Patrick Kimando, Francis Kamau, Benson Mwangi, Paul Wathika, Geoffrey Kamau, Duncan Chege, Francis Wachiuru, George Mwihia, Daniel Lee, Joseph Gachunga, Boniface Muthama, Rosemary Njeri, Edward Duncan, Lucy Njambi and James Mutaiga.

They face multiple charges, including conspiracy to defraud, stealing by directors or officers, fraudulent false accounting, obtaining credit by false pretences, failure to maintain proper books of accounts and operating non-core investment businesses without statutory approval.

Court proceedings

Appearing before the Milimani Law Courts, all 19 suspects pleaded not guilty to the charges.

The court granted each accused person a bond of Sh200,000 with one surety.

The matter is scheduled for mention on June 22, 2026.

DCI vows crackdown on financial crime

The DCI said it remains committed to dismantling complex financial crime networks targeting ordinary Kenyans who rely on Saccos for savings, credit and economic empowerment.

Authorities noted that the case highlights growing concerns over governance failures and accountability gaps within some cooperative societies.

The scandal is expected to renew scrutiny on financial oversight mechanisms within Kenya’s Sacco sector, which millions of Kenyans depend on for personal savings, loans and investment opportunities.

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