Financial Watchdog Flags Sh600 Million Sham SHA Payments

Investigation exposes massive fraud ring as 45 hospitals accused of siphoning public funds through ghost claims

Kenya’s Social Health Authority finds itself at the centre of a deepening financial scandal after the Financial Reporting Centre uncovered questionable payments totalling Sh558.6 million to 45 hospitals suspected of operating as conduits for looting public coffers.

The damning probe report, seen by Kenya Insights, reveals a sophisticated scheme where health facilities with dormant bank accounts suddenly became recipients of millions of shillings from the Social Health Insurance Fund and Primary Health Care Fund between October 2024 and July 2025, only to see the money vanish through suspicious cash withdrawals and mobile money transfers.

The revelations come as the Office of the Director of Public Prosecutions last week approved charges against multiple health facilities and their directors in what is shaping up to be one of the biggest healthcare fraud cases in recent memory.

Five suspects are already in custody pending arraignment today, with the DPP having directed that facilities and their directors face multiple counts including conspiracy to commit a felony, fraudulent alteration of information, cheating, and acquisition and use of proceeds of crime.  

The investigation has exposed a troubling pattern where the same individuals control multiple facilities, primarily concentrated in Mandera, Kisii, Bomet, Nairobi, Bungoma, Kakamega and Garissa counties.

In several instances, different hospitals share the same physical address and directors, raising red flags about their legitimacy as active healthcare providers.

Topping the list of questionable recipients is Chelymo Medical Center Limited in Bomet, which received a staggering Sh85.2 million despite records showing the account only began receiving funds exclusively from SHIF in February 2025.

The facility, registered in March 2016 and licensed as a private Level 4 medical centre, saw no activity from diverse sources typically associated with genuine healthcare operations such as payments from individual patients, insurance companies, or medical suppliers.

In Mandera County, the web of deceit becomes even more intricate.

Eagle View Medical Services Limited, incorporated only in May 2025, Gallant Hospital incorporated in December 2024, and Dherkale Diagnostic Centre all operate from the same building on Gallenia Plaza along the Rhamu Mandera road.

The facilities are controlled by brothers Adankulla Ahmed Hassan and Abdirahaman Ahmed Hassan, with Adankulla serving as sole director of Dherkale.

Between March and June 2025, Eagle View received Sh17.2 million from both SHIF and PHCF, all unsupported by documentation, while Dherkale pocketed Sh5.5 million.

Health CS Aden Duale.

Investigators found that Sh4.85 million was transferred directly to Abdirahman’s personal Equity Bank account, with the rest withdrawn in cash.

When contacted for comment, Adankulla dismissed the allegations, demanding that queries be submitted in writing to designated facilities.

“Refrain from false allegations,” he warned via WhatsApp, promising that “all the allegations will be substantiated.”

But perhaps the most brazen case involves Filmre John Okeiga, who controls three hospitals that collectively received Sh90.1 million.

His Filyne Chima Hospital Limited, incorporated only in March this year, opened a bank account at Cooperative Bank on the same day and subsequently received Sh12.2 million exclusively from SHIF with no other income streams.

More concerning is how Okeiga’s Westlife Hospital, which received Sh59.2 million, utilised the funds.

Investigators discovered that instead of medical supplies or staff salaries, the money went towards a Sh1.5 million cash withdrawal, Sh9 million transferred to a law firm for property purchase, and Sh5.99 million and Sh2.99 million for buying a house and car respectively.

Another Sh2.25 million was described in bank records as “birthday expenses, house chores and credit card payments.”

The third facility, Eastlife Hospital Limited, received Sh18.6 million in what investigators described as “a spike in funds” inconsistent with normal hospital operations.

The money was used to purchase land and transferred to an account operated by Boda Boda Stages Investment.

Equally troubling is the involvement of government employees in the alleged fraud. Stella Moraa Misati, listed as a Ministry of Health employee, appears as one of two directors of Summit Medicare Chepilat Limited, which received Sh12.3 million from SHIF.

Two other directors of facilities under investigation are employees of Hema Hospital in Kisii, raising questions about insider facilitation of the scheme.

The Financial Reporting Centre’s analysis paints a picture of special purpose vehicles created specifically to drain public funds. Mahnaz Nursing Home Limited in Mandera, which received Sh12.6 million, showed no activity related to genuine hospital operations such as salary payments or transactions with medical suppliers.

Instead, funds were withdrawn in cash and transferred to directors’ personal accounts.

The Directorate of Criminal Investigations Banking Fraud Unit is now pursuing directors of the implicated facilities for fraud, embezzlement of public funds and obtaining money by false pretences through fictitious claims payments.

Among the facilities facing prosecution are St Mark Orthodox Hospital in Vihiga County and its two directors, as well as Jambo Jipya Medical Clinic in Kilifi County and seven of its employees.
The charges follow inquiry files submitted by both SHA and the Kenya Medical Practitioners and Dentists Council.

This scandal strikes at the heart of President William Ruto’s Universal Health Coverage agenda, which has already faced significant teething problems since the transition from the National Hospital Insurance Fund to the Social Health Authority system.

The fraud threatens to undermine public confidence in a system meant to provide affordable healthcare to all Kenyans.

Health Cabinet Secretary Aden Duale has previously warned that healthcare providers whose information is used to defraud SHA will be held personally liable, with facilities being surcharged to recover funds already paid out on false claims.

SHA Headquarters in Nairobi.

In August, SHA suspended 40 facilities over fraudulent claims, including duplicated maternity claims, fabricated clinical records and unqualified staff approvals.

But the Financial Reporting Centre’s findings suggest the problem is far more extensive and systematically organised than initially thought.

With 1,188 files at various stages of investigation according to the DCI, the Sh558.6 million flagged so far may represent only the tip of the iceberg.

As arraignments begin and more suspects are apprehended, Kenyans are left wondering how fake facilities managed to infiltrate a government healthcare system, who facilitated their accreditation, and how many legitimate patients were denied care while billions were siphoned through ghost claims.

The scandal also raises uncomfortable questions about oversight mechanisms at SHA, particularly how facilities with no history of medical services or those freshly incorporated could begin receiving millions in public funds without triggering immediate red flags.

For ordinary Kenyans struggling to access quality healthcare under the new SHA system, news that hundreds of millions meant for their treatment has been stolen by briefcase companies adds insult to injury.

The full extent of the damage to both public finances and the healthcare system itself will only become clear as investigations continue and more suspects are brought to book.

What remains certain is that this latest scandal has dealt another blow to the government’s healthcare reforms, with the very institutions meant to save lives now accused of being vehicles for grand theft.