Staff indicted in recent $2.1 million Equity Bank Kenya fraud

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The news: 

  • One of the staff members of Equity Bank Kenya has been said to have collaborated with other criminals to defraud the country’s biggest lender of up to $2.1 million. 
  • Techpoint Africa reported findings from the preliminary investigations that revealed that KSh 179.6 million ($1.3 million) was paid out fraudulently to the 551 bank accounts and mobile money wallets between April 9 and 15, 2024. 

Per a detective close to the investigation who spoke to Techcabal, an employee of the Kenya-based Equity Bank transferred money from accounts to several bank accounts and M-Pesa lines. 

Questions about how the insider managed to pull off the fraud revealed that the yet-to-be-named Equity staff reportedly installed malware in the bank’s main system to avoid detection. 

So, by the time the bank would notice any unusual activity in its system, $2.1 million had already been sent out to multiple accounts, with some account holders having already withdrawn the funds.  

Last week, we reported that the bank had restricted all accounts that received the stolen funds and had apprehended 19 suspects connected to the incident. 

New reports, however, indicate that the number of arrested suspects has gone up to 59, and some people have been granted bail. It’s unclear if or when they’ll be charged in court. 

The fraudulent transactions, which saw Safaricom receive KSh 63 million ($478,360) and KSh 39 million ($296,015) sent to eleven commercial banks, not only cost Equity Bank millions of dollars but also exposed the vulnerability of the East African nation”s banking system.

While some recipients have refunded the money, others still need to be claimed. Equity continues to work closely with Safaricom, and the other banks follow the movement of the funds to recover them.

Investigations are ongoing, and the Directorate of Criminal Investigations is tracking down other suspects who are still at large using mobile phones.

The victim, Equity Bank, and the Central Bank of Kenya (CBK), the country’s financial regulator, have yet to state anything since the first report on the fraud. 

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Reports suggest that bank employees collaborating with criminals to defraud customers is not a new scam in Kenya, but many go unreported because they fear damaging their reputation and losing customers.