Some people argue that Kenya has become a favoured operational point for international money laundering syndicate, due to its well-developed economy, modern banking systems and fairly developed IT systems. However, it has been established that money laundering scam is continent wide.
A suspected international money laundering syndicate involving Chinese nationals has been operating in Nairobi targeting businesses.
What has happened is that the Chinese national and the Kenyan businessman have simply engaged in money laundering and tax fraud.
The scam involves credit cards believed to have been stolen or cloned from leading companies in China.
How it operates is simple: A Chinese lands into the country with multiple credit cards belonging to one or several leading companies operating in either mainland China or Hong Kong.
They then approach a Kenyan business owner, preferably those whose daily turnover is in hundreds of thousands, and whose clients prefer to pay using credit or debit cards.
These business people could be owners of establishments, such as high-end hotels and luxury resorts, whose main clientele are foreigners who prefer using plastic cash as opposed to hard cash.
such businessmen or establishments operate point of sale terminals — which are usually portable machines issued by local banks depending on the volume of their transactions.
The electronic devices are used to process card payments at retail locations and they accept all card types and prints receipts.
The foreigners in the syndicate run a credit card loaded with cash on these machines purporting to be purchasing goods or services rendered by the Kenyan business — yet in actual sense they end up buying nothing.
In a matter of minutes, the money will reflect in the firm’s accounts. But in reality, no actual business — that is purchase of goods and services — has taken place. Interestingly, most of the amounts entered supposedly for ordinary goods are huge.
After running the credit card, the Kenyan businessman then leaves his POS machine with the Chinese as collateral. When the money hits the account, the Kenyan businessman then withdraws it and shares it with the Chinese getting the bigger share.
For example, if the Chinese had run the card for Sh1 million, he will be given back Sh600,000 while the Kenyan businessman remains with a cool Sh400,000 for his troubles.
The nation newsrooms has seen a receipt of such a transaction that took place on September 11, 2018 at 2.16pm involving a popular shoe store on Kimathi Street and a Chinese identified in the receipt as Lin Zhi Ke.
Transaction details indicate that the Chinese bought shoes worth Sh250,000. However, our sources say no such purchase took place.
Our sources say that the Chinese had made two previous “fake” purchases at the same store of Sh750,000 each, bringing his total purchases in a span of two weeks to Sh1.75 million.
Based on the 60:40 ratio, the Chinese went home with Sh1,050,000 while shoe dealer made a cool Sh700,000 in a fortnight without selling a single pair of shoe.
The so-called Mr Lin Zhin Ke, is said to have quietly slipped out of Nairobi and gone back to China to “refill” his cards. He is thought to be the head of one of the six groups of suspected foreign criminals running money laundering schemes in Nairobi.
How can the electronic fraud be stopped?