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Four Kuscco ex-officials charged with fraud, theft
From right: Top officials of Kuscco George Ochola, David Magutu Mwangi, Jackline Atieno Omolo and Mercy Muthoni Njeru at the Milimani law courts on February 13, 2025, over theft of Sh82.8 million.
Photo credit: Richard Munguti | Nation Media Group
Four former officials of the Kenya Union of Saving and Credit Cooperative (Kucco) have been charged with stealing Sh82.8 million from the firm even as security agencies intensified a manhunt for other suspects implicated in a Sh13.3 billion fraud.
Jackline Atieno Omolo, a former Kuscco legal officer, was on Thursday jointly charged with George Magutu Mwangi (former national chairman), George Ochola Owino (former finance manager), and Mercy Muthoni Njeru (head of radio project)Â before Milimani senior principal magistrate Dolphina Alego.
They denied the charges, including theft by directors or officers of a company, conspiring to defraud, money laundering and uttering a false document.
The four were charged that on diverse dates between October 2022 and April 2022, jointly with others who were not before the court, they conspired to steal by diverting money totalling Sh 82,826,000 property of Kuscco for the purchase of a land parcel in Nairobi.
Their arraignment came as officers from the Directorate of Criminal Investigations (DCI) reportedly intensified a search of other suspects implicated in the fraud at Kuscco.
The four who appeared in court were arrested on Wednesday night, barely two days after the DCI was handed a 208-page report of a forensic audit by PricewaterhouseCoopers (PwC) for investigations.
The PwC report shed light into the extent of shady financial dealings at Kuscco that included cooking of books to declare phantom profits while making large unexplained withdrawals.
Kuscco's former managing director, George Otieno Ototo, who was also extensively mentioned in the report alongside other key officials, was yet to be arrested by the time of going to press, with police saying they were still tracing him. DCI is acting on the PwC report that was handed to them by the Ministry of Cooperatives.
The prosecution said the Sh82.8 million allegedly stolen was part of the proceeds of crime received from Kuscco and believes the four entered into a land sale agreement to conceal the nature, and source of the money.
The PwC audit revealed that Kuscco, which used to receive billions of shillings from savings and cooperative societies (saccos) for investments, had its 2022 cooked financial accounts backed and signed by external auditor Alfred Basweti of Omenye and Associates.
However, it emerged that Mr Basweti had died long before and Kuscco officials forged his signature.
Mr Owino, Ms Omolo, and Ms Njeru were arrested within Nairobi while Mr Mwangi was arrested in Mathira, Nyeri county.
Bail application
The ex-officials, excluding Mr Ototo, denied the charges and have been remanded at Muthaiga Police Station until Tuesday next week when they will find out if their bail application will be granted or denied. Mr Ototo has been summoned to appear in court on the same date for plea taking.
The Kuscco fraud left the entity with assets of Sh5.2 billion against liabilities of Sh17.7 billion liabilities, sinking the organisation that operated without a regulatory watchdog into Sh12.5 billion insolvency.
Kuscco started in 1973 as a lobby for saccos but later established five subsidiaries, paving the way for it to start taking deposits, issuing loans as well as building and selling houses.
