Financial Crime World

Headline: Kenyan Investigative Agencies Probe Over $600 Million in Suspected Illicit Funds: Corruption, Fraud, and Cybercrimes Top the List

Wednesday, February 21, 2024

Kenyan authorities have identified and investigated more than $600 million in suspected ill-gotten gains from various financial crimes over the past three years. The Financial Reporting Centre (FRC) reveals that these proceeds, approximately Sh86 billion, were derived from offenses such as corruption, fraud, and cybercrimes.

Flagged Cases and Prosecutions

From July 2021 to July 2023, the FRC flagged over 6,700 cases of suspected illicit cash amounting to Sh86 billion. Of these, approximately $3 billion (Sh46.1 billion) was prosecuted. This raises concerns about potential money laundering.

Predicate Offenses

Corruption and economic crimes were the leading categories of predicate offenses, with Sh39.7 billion in proceeds:

  • Corruption and Economic Crimes: Sh39.7 billion
    • Bribery
    • Unexplained Wealth
    • Embezzlement
    • Abuse of Office

Fraud and Forgeries

Fraud and forgery crimes ranked second in terms of value generated, with $2.11 billion (Sh28.7 billion) in proceeds:

  • Fraud and Forgeries: Sh28.7 billion

Other Financial Crimes

Other financial crimes generated significantly lower values but collectively contribute to the financial crime landscape:

  • Tax-Related Crimes: Sh12.7 billion
  • Money Laundering: Sh17.4 billion
  • Minor Offenses: Sh3.29 billion
    • Cybercrime
    • Drug dealing
    • Human trafficking
    • Wildlife crimes

The Financial Crimes Landscape and Vulnerabilities

The Financial Reporting Centre’s National Risk Assessment Report identified corruption and economic crimes as the leading proceeds-generating predicate offenses in Kenya. These crimes often utilize the banking sector to carry out their fraudulent activities due to public confidence.

Susceptibility to Money Laundering

Banks processed suspicious transaction reports worth Sh5.6 billion in the three-year period. Criminals attempt to evade detection by depositing funds in tranches below the reporting threshold and maintain innocent appearances by leaving the accounts untouched.