The KUSCCO scandal has shaken Kenya’s financial sector, exposing a web of corruption and mismanagement that has left the Kenya Union of Savings and Credit Co-operatives (KUSCCO) insolvent and its members’ savings at risk.
At the center of this scandal are four main suspects whose actions have not only tarnished their reputations but also raised serious questions about accountability in the cooperative sector.
The suspects, George Magutu Mwangi, Mercy Muthoni Njeru, George Ochola Owino, and Jackline Pauline Atieno Omolo, were arrested on February 13, 2025, and face multiple charges, including conspiracy to defraud, theft by company directors, and making false document.
George Magutu Mwangi, the former chairman of KUSCCO, is one of the key figures in this scandal.
Once a respected leader in the cooperative movement, Magutu’s reputation has been severely damaged by allegations of his involvement in the misappropriation of KSh 13.3 billion.
According to the forensic audit conducted by PricewaterhouseCoopers (PwC), Magutu and his co-accused allegedly used their positions to siphon funds, falsify financial statements, and manipulate accounts to cover their tracks.
The audit revealed that financial statements were even signed by a deceased auditor, highlighting the extent of the fraud.
Mercy Muthoni Njeru, the head of the radio project at KUSCCO, and George Ochola Owino, the former finance manager, are also deeply implicated.
Njeru and Owino are accused of conspiring with Magutu to steal KSh 82.8 million, which was allegedly used to purchase property in Nairobi.
Their roles in the scandal have exposed how individuals entrusted with managing members’ savings abused their positions for personal gain. The charges against them include stealing by directors and making false documents, further cementing their fall from grace.
Jackline Pauline Atieno Omolo, the former legal officer, completes the quartet of suspects. Her involvement in the scandal has raised questions about the legal oversight within KUSCCO.
As someone responsible for ensuring compliance with laws and regulations, Omolo’s alleged participation in the fraud has severely damaged her professional reputation.
The court has also summoned George Otieno Ototo, the former managing director, who is expected to face charges alongside the four suspects.The fallout from this scandal has been devastating for KUSCCO and its members.
The forensic audit revealed that 247 Saccos deposited KSh 24.8 billion into KUSCCO, of which KSh 12.5 billion is now unaccounted for. The mismanagement and theft have left the umbrella body insolvent, with little hope of recovering the lost funds.
The suspects’ actions have not only ruined their own reputations but also eroded trust in the cooperative sector, which is meant to empower ordinary Kenyans through savings and credit.
Their reputations are now synonymous with fraud and betrayal, and their actions have left a trail of financial ruin for thousands of Sacco members. The KUSCCO scandal is a cautionary tale about the need for stronger oversight and accountability in Kenya’s financial institutions.
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