Eight Students Granted Bail in KES 449 Million Fuliza Loan Fraud Scheme Case

In a recent development, a court in Nairobi has granted cash bail to eight individuals accused of participating in a fraudulent scheme that involved stealing KES 449 million from a local bank using a sophisticated Fuliza loan scam.

The suspects, who are students from Egerton and Laikipia universities, were charged with several crimes, including conspiracy to defraud Safaricom PLC of KES 449 million between July and August of 2022. They were also charged with computer fraud, unauthorized access to computer data, computer service interception, and money laundering.

According to the charge sheet, the suspects used their mobile phones and laptops to hack into Safaricom's Fuliza system and create multiple accounts using forged identity cards. They then used these accounts to apply for Fuliza loans ranging from KES 50,000 to KES 100,000, transferring the money to other accounts before withdrawing it through agents.

Fuliza is a mobile overdraft service offered by Safaricom that enables customers to complete MPESA transactions even if they don't have sufficient funds in their M-PESA account.

The Banking Fraud Investigations Unit (BFIU) detected the scam in August 2022 after fund managers observed an unusual surge in Fuliza loan uptake, and borrowers were not repaying the loans. Detectives traced the suspects to various locations in Nairobi, Nakuru, and Nyeri counties, where they seized several mobile phones, laptops, SIM cards, and identity cards used in the scam.

The suspects requested a reduction in their cash bail from KES 1 million each, citing their dependence on their parents for support as students. While the prosecution did not oppose their request, they asked for strict measures to prevent the suspects from interfering with witnesses or evidence.

The case is scheduled for pre-trial directions on February 27.