The large sums of fake foreign currency seized by the police in recent months have raised concerns on whether Nairobi could be turning into a base for transnational fake cash cartels.
The February 27 discovery of a cache of largely fake foreign cash amounting to Sh32 billion in a residential house in Ruiru town, 26km north-east of Nairobi, followed a series of similar cases in the past few years.
Ms Nancy Muthoni Muchori and Mr Joseph Munyao Kamandi were arrested in the operation by officers from the Special Crimes Prevention Unit, and are facing charges of “forgery, possession of papers of forgery and obtaining money by false pretence”.
The detention of the duo followed last October’s arrest and prosecution of a Chadian male national, his son and their Kenyan accomplice on suspicion of being in possession of about Sh1 billion in counterfeit dollars and euros — the latter used in 19 of the 28 members of the European Union.
The fake cash haul, which led to the arrest of Abdoulaye Tamba, his son Abdalla and their Kenyan driver Anthony Mwangangi, in upmarket Nairobi’s Westlands, added to the queue of foreigners arrested on allegations of dealing in counterfeit foreign money.
In June 2018, the High Court in Nairobi condemned a Niger and Cameroonian nationals to 10 years in jail for possession of an estimated Sh110 billion in counterfeit currency.
The two were also in possession of tools for making fake bank notes. The trial took two-and-a-half years, following the foreigners’ arrest in Nairobi’s Diamond Park II in 2016.
The two, Mohammed Sani from Niger and Cameroonian Ousman Ibrahim Bako, had been arrested after police found them with the fake dollar and euro notes, money printing machines, cutters, scanners, five safes, two computers, chemicals, masks and foil paper.
Two other suspects were arrested at the Jomo Kenyatta International Airport (JKIA) in October 2016 with fake Sh267 million euro notes in 500 bills on their way to Dubai.
Inadequate information on the number of fake bank notes in circulation in Kenya, analysts say, makes it difficult to establish the impact it is having on the economy.
“When you look at where the money is being circulated…, that’s where things fall down in the Kenyan context. The problem is there has not been an in-depth study on what the value of fake cash is and how much is in circulation,” Patricia Rodrigues, an East African-based research analyst for London-headquartered consultancy, Control Risks, said in a recent interview.
The Central Bank of Kenya (CBK), the custodian of Kenyan money, said it does not usually comment on cases involving counterfeit foreign currency.
“We believe that the fake foreign currencies are not usually circulated in Kenya and we don’t comment on foreign currency because it’s not our money being counterfeited,” a director at CBK who did not wish to be named said.
Mobile money
Counterfeit bank notes remain a top form of fraud for the increasingly growing mobile money and bank agents in Kenya.
A survey by the CBK in June 2017 suggested 97 per cent of the fraud faced by mobile cash agents involved fake notes, especially the Sh1,000 and Sh500 notes.
The survey, based on 2015 data, showed that mobile agents, largely dealing in Safaricom’s M-Pesa, have become a key target for fake cash printing syndicates with 24,562 cases reported in that year.
Ms Rodrigues said Kenyan law enforcers are more focused on violent crimes such as robbery than white-collar crimes, making the vice take longer before being noticed.
“White-collar crimes don’t rank highly in an economy such as ours. There’s less of an investment in upgrading the investigative services for such crimes.
“There’s also perhaps collusion between the criminals and people within the law enforcement,” she said.
The CBK, in an annual report for the period ending June 2017, acknowledged the possibility of a transnational fake currency ring in Nairobi and the region.
“CBK and other East African Community (EAC) central banks held a joint meeting with the Eastern Africa Police Chiefs Cooperation Organisation (EAPCCO) in September 2016 to develop strategies for enhancing the fight against counterfeit crime, one of the emerging transnational crimes,” the CBK says in the report.