Three Family Members Convicted in Ksh113 Million Kisumu Fraud

The Office of the Director of Public Prosecution Headquarters in Nairobi

A Kisumu court has convicted three relatives over a fraud case involving Ksh113.2 million from a wholesale distribution business.

Senior Principal Magistrate Fatuma Rashid found the accused guilty on all six counts presented by prosecutors, according to the Office of the Director of Public Prosecutions (ODPP).

The case involved customer payments and wholesale goods allegedly diverted between October 2020 and July 2021.

How the Money Was Diverted

Court proceedings revealed that one of the accused worked as an accountant at the affected company.

Prosecutors said the accountant manipulated the business's accounting system to create false transactions and hide missing funds.

Evidence presented in court showed that customer payments were allegedly redirected to bank accounts and mobile money accounts associated with the other two accused.

The payments were reportedly sent to those accounts instead of the company's official accounts.

An audit report and forensic examination of documents established that Ksh113,227,529 could not be accounted for.

Court Rejects Defence Argument

Witnesses who testified included company employees, customers, bank officials, forensic examiners and investigators.

Their evidence detailed how the transactions were allegedly carried out and how the missing funds were concealed.

The defence argued that the transactions were legitimate business arrangements, but the court rejected that explanation.

The magistrate found that the evidence demonstrated a coordinated scheme to defraud the company and conceal the proceeds.

The court also found that the two other accused participated in theft and money-laundering activities linked to the diverted payments.

Sentencing Set for October 29

The three accused were convicted of conspiracy to commit a felony, money laundering, and acquiring or possessing proceeds of crime.

The former accountant also faced additional charges relating to theft and fraudulent accounting.

The court scheduled sentencing for October 29, 2026, after delivering its verdict.

The case adds to other fraud matters involving relatives, including a mother and daughter arrested in Karatina in August over alleged land fraud involving property valued at approximately Ksh40 million.