Suspect in forex trade scam faces extradition from US

A suspect who fled to the United States after defrauding investors of millions of shillings could soon be brought back to stand trial.

Joshua Muthee Kiura, 29, is accused of perpetrating the fraud under the guise of an online forex broker. He had promised investors returns of up to 10 per cent per month on any investment above a million and eight per cent on anything between Sh100,000 and Sh1 million.

The Office of the Director of Public Prosecutions in April agreed with investigations by the Directorate of Criminal Investigations (DCI) and advised that the DCI obtain a warrant of arrest so that extradition proceedings can start.

DCI boss George Kinoti said the delay in getting the arrest warrant has been caused by the scaling down of court activities in line with regulations on containing the coronavirus. Execution of warrants of arrest was among the services suspended by the Judiciary at the beginning of April.

“The investigation file is ready. Once we obtain the warrant of arrest we shall also be contacting the US authorities as guided by the Mutual Legal Assistance Treaty to bring him back to face charges,” Mr Kinoti said.

The investigators have also obtained a statement from Mr Kiura’s sister, who told them that her brother said he was going to live with friends in Alabama, US. The last time she spoke to him, she said, he was planning to relocate to Washington, DC.

Mr Kiura had obtained tens of millions of shillings from unsuspecting Kenyans while claiming that he would invest in the online forex market to earn interest on behalf of the investors. To entice more clients to buy into his scheme or existing clients to invest more, he would ensure that for at least the first three months, the interest was paid right on time and in full.

Timothy Mugunde, a businessman in Siaya, lost Sh2.3 million to Mr Kiura, who has since gone silent on him. Japheth Kaeke Musyoka, also a businessman, lost Sh9 million to the suspect.

“I had resigned from my job to start a business. I handed to him (Mr Kiura) all my benefits on the promise of good returns,” Mr Musyoka said.

Another investor, Elijah Gakuya, says he lost more than Sh500,000 to Mr Kiura. A number of complaints from the public led the DCI to investigate.

Information obtained by the Sunday Nation shows that as soon as the investors deposited cash into his bank account at Standard Chartered Bank, he would withdraw nearly all the amount in a series of Pesalink and M-Pesa transactions.

For instance, Mr Mugunde deposited Sh2.2 million on January 15, 2019.

On the same day, Mr Kiura made an M-Pesa transfer to his phone of Sh10,000. He then made three Pesalink transactions — two for Sh800,000 and one for Sh700,000.

Other than being possibly charged with the offence of obtaining money by false pretences, Mr Kiura could also face the charge of conducting online forex brokerage services without a licence from the Capital Markets Authority (CMA).

CMA last week told the Sunday Nation that investors who trade through unlicensed entities and lose money have no recourse to them.

“If cases are brought to our attention and we establish there are crimes that may have been committed, we engage the criminal investigation and public prosecution agencies to follow-up such matters,” the authority said.