Impersonator charged with Sh3 million shares fraud
An individual impersonating various registered shareholders has been charged in court as part of a scheme that attempted to defraud investors and their respective stockbrokers of shares worth Sh3 million. PHOTO | SHUTTERSTOCK
A man impersonating various registered shareholders has been charged in court with attempting to defraud investors and their respective stockbrokers of shares worth Sh3 million.
Patrick Musau Munguti has been charged with stealing and fraudulently selling shares of KCB, Equity Bank, Standard Chartered, Bamburi Cement, Absa, Co-operative Bank, Nation Media Group, Centum and Kengen all valued at Sh1.864 million at stockbroker SBG Securities.
The fraud scheme is alleged to have taken place on diverse dates between January 11, 2023 and February 16 with the respective shares, which amounted to 70,500 units belonging to Michael Mugo Nguithi.
Additionally, Munguti has been charged with impersonating Gideon Mugambi Mworia on July 10 and 15 with the goal of stealing 60,000 Safaricom shares from Sterling Capital Limited in Westlands.
“Patrick Musau Munguti, on the 14th day of July 2023 at Sterling Capital Limited, in Westlands within Nairobi County with the intent to defraud or deceive, knowingly uttered a national identity card number in the name of Gideon Mugambi Mworia without lawful authority,” reads the police charge sheet presented in court on Wednesday.
The Safaricom shares had a valuation of Sh1.14 million at the time.
The accused has also been charged with several counts of forging the identity cards (IDs) of a number of other shareholders with the view of assuming their respective identities in the fraud scheme.
The stolen identities include the forging of IDs belonging to Charles Kibicho Kariuki, Odongo Rispa Achieng and Isaiah Kubai Mitu, Jonah Mwangi Ndirangu, Jonah Mwangi Ndirangu and James Ngatia Muguiyi.
Others are Francis Wamukota Wangusi, Iganatius Muguiyi Muturi and William Gitiche Tatua.
According to the charge sheet the crime was perpetrated jointly with others ‘not before court’ implying the fraud was perpetrated by a group of individuals working in cohorts.
While the charge sheet does not describe how the crime was perpetrated, a capital markets insider told the Business Daily that the scheme which is common practice around the world seeks to take advantage of weak know your customers’ rules within stock brokerage to defraud both dealers and shareholders.
Forged national identity cards will for instance bear the picture of the perpetrator while retaining other details of the original.
Meanwhile, fraudsters usually access information on shareholders including the volumes of shares held and the respective stockbrokers through illegal means including the infiltration of trading systems/hacking.
A fraudster will cash in from the illegal sale of shares by enforcing payments through manual means such as cheques.
