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Pyramid scheme victims go to court seeking Sh4 billion pay
What you need to know:
- The schemes were styled as limited liability companies, trusts, sole partnerships, businesses, welfare association, non-governmental organisations, foundations, ventures, investments, micro-finance groups and savings and credit societies, among others.
- Given the fact that they had a nationwide operation, their victims are spread in all the counties in Kenya except in Wajir and Garissa.
Attract more people - The government had also ordered that the monies held in the various bank accounts, where the victims had deposited it, be transferred to the CBK.
Victims of collapsed pyramid schemes want the government compelled to pay them more than Sh4 billion they invested in the organisations a decade ago.
Lawyer Wanyiri Kihoro for the 26,249 people said most of the 257 outfits that defrauded wananchi a total of Sh4,152,008,342 in 2006 were registered within a very short time after vetting for authenticity by the Attorney-General, the Ministry of Co-operative Development and Marketing, or Ministry of Gender, Culture and Social Services.
The schemes were styled as limited liability companies, trusts, sole partnerships, businesses, welfare association, non-governmental organisations, foundations, ventures, investments, micro-finance groups and savings and credit societies, among others.
“Armed with this registration, the operators of the funds opened a number of bank accounts under false pretences of paying high returns on deposits made with them. They approached the petitioners, who were misled and deposited various sums of money in a number of accounts opened in banks and financial institutions,” said Mr Kihoro.
He said government officers in the institutions and ministries, neglected their duties as public servants.
Mr Kihoro said this exposed the petitioners to losses, when officials authorised registration of the outfits, which became defunct after perpetrating the fraud.
Given the fact that they had a nationwide operation, their victims are spread in all the counties in Kenya except in Wajir and Garissa.
Attract more people
The case could attract up to 60,000 victims spread all over the country who lost money in the controversial scheme.
“The fraudulent national operation was brought to an end by an order made by CBK and directed to the banks and other financial institution, that the accounts operated by the outfits be closed.
This confirms the responsibility of the government institutions, in preventing what happened from the beginning,” said Mr Kihoro.
The government had also ordered that the monies held in the various bank accounts, where the victims had deposited it, be transferred to the CBK.
“For the last eight years, the money lost by the victims has been held by the CBK and it is believed has earned a considerable compound interest. This case has been filed to compel the government to refund the victims,” said Mr Kihoro.
