The name of the Chairman of Betting Control and Licensing Board (BCLB) Anthony Kimani has featured prominently as one of the key masterminds of the online mobile banking and gamble fraud targeting to siphon money from financial institutions.
The culprits are believed to collude with employees of the financial institutions to manipulate the largely malfunctioning IT systems and then share the loot.
Investigations have shown bank staff work in cahoots with account holders, mostly from the Nairobi Business Centre Branch along Ngong Road, who take advantage of the system to net decent amounts from the bank through gambling activities on the credit card that are mostly performed at night.
Kimani is implicated in a case in which Cooperative Bank lost more than Sh115 million after freezing his account for being overdrawn.
He operates Account Number 01109127579300 at the Nairobi Business Centre Branch.
His account had already Sh 18 million of which he withdrew Sh 14milion. However, the Bank realized that the money did not belong to him.
The bank lost Sh 14 million and in total it lost Sh 115 million which was siphoned by seven other customers in 2011 who are not named in the suit.
When his account was frozen after investigators unearthed the fraud, Kimani sued the bank. The frozen account was holding Sh 4.8 million.
Effectively, the well networked chain of online-gambling fraud scheme only requires to possess a mobile phone, a bank account and a bit of gambling to steal.
More shocking is a revelation before High Court judge Fred Ochieng that Kimani was only using a mobile phone to siphon the money and carry out online gambling.
His account was connected to M-banking and thus he could operate it remotely on his mobile.
The court noted that Kimani opened the account as a savings in which it was expected that he ought to have been having more inflows than outflows.
But when he was asked about it, he said that the purpose of the account was to simply to gamble.
He however never cashed in any wins, meaning he might have drowned the Sh 14 million to the betting world.
The relationship between Kimani and the lender involved debiting (remove an amount of money) his account with the amount of money which he had paid out to various gambling sites.
However, the bank’s system had malfunctioned of which the fault prevented the lender from debiting the account. Although the system was not picking up debits, the credits were being received from a different route.
Edwin Karuri, an investigating manager with the bank told the court that on May 7, 2011 he commenced investigations which revealed that for eight months debits totaling to Sh 115, 869, 566 were transacted by seven customers on their credit cards, had not been debited to their respective accounts.
The investigations revealed that between October 2010 and May 6, 2011 transactions emanating from gambling sites were not being recognized by the Bank master software.
According to the investigator, the investigations unearthed that the seven opened the accounts at one branch and the same day and they were all introduced by one of the bank’s employees.
“The revelation led to the suspicion that the bank employees were aware of the malfunction in the bank’s system, and had encouraged customers to take advantage of the system,” he testified.
Karuri also said that all the transactions were being carried out when the bank’s main operating software for banking was offline, having being switched off at the close of the day. All the debits were in relation to internet transactions relating to gambling.
He added that Kimani used to carry out his transactions at night.
But the judge found the claims to be untrue, saying that gambling on the internet was not prohibited then and thus there was no reason why the he would have needed to keep his activities a secret.
Both the bank and its customer lost, as the judge dismissed the case by him and at the same time declined to order that he refunds the Sh 14 million.
Justice Ochieng ruled that the bank ought to blame for failing to stop the bleeding of the account immediately it was noticed.
“By failing to act appropriately and in a timely fashion, the bank negligently contributed to the continued debiting of an account which did not have requisite funds to meet such debits,” the judge ruled.”
Interestingly, Kimani walked away with Sh 14 million but his account remains frozen after the court declined to grant his prayers to have it back.
The Sh 4.8 million remained with the bank even though the bank lost Sh 115 million in total from the transactions.