Sh386 Million Heist: How a Rogue Equity Bank Employee Siphoned Cash to 8 Firms in Just One Month

A court case has revealed how a rogue Equity Bank employee siphoned Sh386.5 million in one month through unauthorized transfers to eight companies.

The illegal cash transfers to Ubahashi Traders Limited, Calabash Adventures Limited, Jahnur Investment, Kariye Investment, Flowerish International, Kariye Salah Ali, Hotho Investments, and Sasa Pay Trust took place between May and June 2024 but have only now been disclosed.

In court filings, Equity Bank stated that the employee, who has since been dismissed, illegally transferred Sh386,500,320 between May 17, 2024, and June 14, 2024.

Upon discovering the fraud, the bank reported the matter to the Banking Fraud Investigation Unit of the Directorate of Criminal Investigations (DCI) and rushed to court to freeze the accounts of the eight firms as investigations began.

In its application, Equity Bank sought to freeze the accounts of Ubahashi Traders Limited (up to Sh207,720,020), Kariye Investment Limited (Sh85,740,300), Calabash Adventures Limited (Sh32,000), Flowerish International Limited (Sh11 million), Kariye Salah Ali (Sh6 million), Hotho Investments Limited (Sh93.04 million), and Jahnur Investments Limited (Sh18.5 million). The bank also revealed that Sasa Pay Trust had requested a lien over Sh26.5 million, but the amount transferred to the company was Sh88 million.

The companies that received the funds, however, opposed Equity Bank’s application to freeze their accounts, attempting to present their side of the story.

In affidavits sworn by Mohammed Hashi Adan, Kariye Salah Ali, Mohamud Mohamed Arab, Abdirashid Mohammed Hassan, and Mohammed Sahil, the companies claimed they were primarily engaged in the import business and often collaborated to raise required amounts in US dollars.

They stated that they were approached by a man named Geoffrey Kiragu, who identified himself as a property agent and claimed to have significant funds to convert into US dollars. The companies were to receive the funds in their accounts, remit them to Geoffrey, and earn a commission.

In their defense, the companies said they only later discovered the money was stolen from Equity Bank and claimed they were unaware of its origin. They argued that they were innocent parties to the case and that freezing their accounts would unjustly harm their businesses. They also noted that they had assisted the police in arresting Geoffrey and should not be penalized.

Additionally, the companies clarified that the money did not come directly to their accounts but passed through various entities before reaching them.

Equity Bank urged the court to grant the freezing orders, arguing that the companies had refused to return the Sh386,500,320 transferred to their accounts. The bank also pointed out that the companies were not licensed to transact in foreign exchange, as required by the Central Bank of Kenya, and warned of a significant risk of losing the funds if the orders were not granted.

High Court Judge Alfred Mabeya ruled in favor of Equity Bank, noting that the defendants had not denied receiving the funds from Geoffrey. The court applied the doctrine of tracing, which establishes that even though the money was not transferred directly from the bank to the defendants’ accounts, it passed through other entities and ultimately ended up in their possession.

“In the present case, at a prima facie level, the record demonstrates that the plaintiff’s funds were successfully traced to the defendants’ accounts. This, combined with the defendants’ admission of receiving the money, establishes an arguable case,” the judge said.

“Regarding the risk of dissipation of funds, there is no assurance that the defendants will refrain from withdrawing or depleting the funds once the freezing orders are lifted. Money is a fluid commodity that can disappear by the stroke of a pen. The court finds that the plaintiff faces a significant risk of losing the money if the orders sought are not granted,” Justice Mabeya added.