Flamboyant businessperson - this is a term the Kenyan media allocated specifically to wealthy individuals whose source of money is either shady or unknown.
Young people in the country picked this up and now as security expert George Msamali would tell Kenyans.co.ke, we are living in dangerous times and the youth are in trouble.
On July 19, 2021, a tweep Chief Jambaz shared how the youth were lured into the fast money scams and how easy it is to fall prey to this vicious business.
The business popularly known as "wash wash" among young Kenyans was commonly known as investment fraud. These are deceptive practices that scammers use to lure unsuspecting victims to invest in their schemes.Over Ksh 37 billion fake currency seized on May 4, 2021.
Scammers or as commonly referred to in Kenya as "wash wash guys" present false and misleading information or fictitious opportunities and they may ask a victim to invest in precious metals such as gold and diamonds, stocks, bonds, notes, commodities, currency or even real estate.
Kenyans from all walks of life have found themselves on the brink of bankruptcy after being duped to join the wash wash criminal enterprise. Speaking to Kenyans.co.ke, Andrew (not his real name) disclosed that he lost over Ksh1 million in a Ponzi Scheme.
A Ponzi scheme is when a fraudster obtains money from new investors and uses it to pay purported returns to earlier-stage investors, rather than investing or managing the money as promised. The scheme is named after Charles Ponzi, a 1920s-era criminal who persuaded thousands to invest in a complex scheme involving postage stamps in the USA.
Andrew narrated how he was duped to invest in the forex trading scam. He was recruited with promises of high returns, which he eventually found out, were from funds remitted by new recruits who were joining through referrals.
A relative approached him in 2019 and the scammers had assured him that if he invested he would earn 20 per cent of his initial investment.
He invested Ksh297,000 in March 2019 and he was paid as agreed. However, he explained that he did not read his contract with the company which already has an ongoing case in court.
"I invested Ksh297,000 and they told me they were doing forex trading. I was promised returns of 20% of my initial investment each month and so in March 2019, I gave them the without reading well the contract. Then the trouble started in August when I couldn't withdraw the cash and I wasn't the only one with complaints," Andrew stated.
"Later I learnt that they were getting more people on board and they would use that money to sort us out. So the earlier you joined the better because you would earn. I was even recruiting others because they had said there's a commission to be earned," he added.
But trouble started when Andrew and others who had invested in this fake business were unable to withdraw their money. "They told us they were having challenges with withdrawals and then all of a sudden everyone in the office disappeared we could not reach them on phone either," he recounted.
Andrew and other investors came together and filed a complaint with the police and the case is still ongoing in court.
Another young person John (not his real name) also narrated how he was duped over Ksh600,000 he invested in a Ponzi Scheme. He was told about the investment group by a person he trusted and he decided to invest in it. He admitted that the company's directors were very flamboyant and moved around in high-end vehicles.
"I had some cash to spare and they were offering 1.4 percent of your initial investment as daily returns. I invested Ksh675,000 and I told them to compound it and it got to around Ksh1.25 million and they started paying me daily," John stated.
Since the directors wanted to earn their trust they showed them their licenses and they would organize frequent trips for their stakeholders at luxury hotels in the city and even plan out of town getaways. From September 2019 to November the group was paying John as agreed.
However, by the end of the year, the company started telling their investors that they were having trouble with money held in various banks and they could not access it. At some point, he learnt that one of the directors had been flagged for fraudulent activities.
"The regulatory body CMA had a problem with these guys and they had assured us that they had followed the right process and obtained all the necessary licenses. So to manage us and calm temperatures they took us for another retreat in a very posh country club outside the city.
"Here they came with a lawyer and the directors tried to show us that there was a new team and they had restructured the company. but one of the Directors was just not straight forward and my gut was telling me something was is off but other investors seemed convinced so I decided to walk with the majority," John explained.
He realized that this was not just a Ponzi Scheme but it was also an Offshore scam that was duping Kenyans living abroad. He and a smaller group of stakeholders had demanded to be paid during the retreat and two days after they came back the company deposited cash into their accounts.
"We asked how they were planning into paying us as agreed and two days after they paid us. I realised that it was because other people were wiring them money. Kenyans overseas were sending money and they were using it to pay us and continue that vicious cycle," he added.
However, after this John and other investors never got a cent from the scammers. They realized that the offices which were located in the Karen suburbs were closed down and their calls were never answered. They moved to the DCI to report the matter and they were advised to first obtain an OB from the Muthaiga police station.
Authorities promised to track and arrest the perpetrators but nothing has ever happened to the cons. John noted that he suspects authorities obtained money from the directors of the company and the matter was settled.
Security expert George Msamali told this writer that the biggest reason the business is flourishing is that perpetrators never face the full wrath of the law. He also noted that when people come out to report these people they get threatened.
Msamali also noted that a number of politicians and flamboyant businessmen in the city trace their road to success in this illicit business.
"There is no punishment and this is a motivation for young people to join this world of criminality and make money because they see their peers flaunting the latest high-end cars and live in the best estates in this city. Also, the people who are conned are the who is who in the country and the perpetrators go scot-free," the security expert stated.
He explained that the cons identify people who are easily convinced and people who want to make quick cash. Msamali further noted that there are many types of was wash businesses in the city and some have made national news but Kenyans still never learn.
"Dirty money in the economy comes from common people who they swindle and foreigners who come in with all these stories of selling gems which are fake stones. Someone will be shown the real stones at first but the ones you buy are fake."
"Law enforcers are also involved and when you seek justice they will ask for money. The court process is tedious and expensive and the culprits will be realized on bond and they start threatening people," he stated.
Msamali explained that since the law has failed to protect victims it has become a dangerous game since a mafia of executioners has now been formed and victims prefer to take the law into their own hands by getting some of these fraudsters executed.An example shared by the DCI as a work of scammers luring Kenyans before stealing their data.criminal shabaab steal arrest suspect scam
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