Big names in pyramid scam

By Peter OpiyoBig names were mentioned in Parliament over the get-rich-quick pyramid schemes that collapsed with Sh34 billion belonging to Kenyans and drove at least 20 people to suicide.The wife of Trade Minister Amos Kimunya, former State House aide Stanley Murage and Boundaries Review Commission Chairman Andrew Ligale are among big names linked to the pyramid schemes.Dr Bonny Khalwale (Ikolomani, New Ford-K) also named former Cabinet Minister Njeru Ndwiga, former diplomat Mary Odinga, a Dr Ndamwe, and Mr George Donde as some of the individuals behind the schemes.Mr Mithika Linturi (Igembe South, Kanu) also linked Mr Kimunya’s wife to the scam and asked Cooperatives Minister Joseph Nyagah to confirm whether the Government was protecting them from investigation.The two MPs argued that nine people who had been summoned by the Francis Nyenze-led taskforce investigating the matter declined to testify because the State was protecting them.Though Mr Nyagah admitted that several names had been mentioned before the taskforce, he declined to get specific, saying he is yet to receive the report and thus could not pre-empt its contents."I don’t have the specifics, but in the next two weeks I’ll be able to know. Many names have come up in the public hearings, but once the report is out I’ll be able to know," Nyagah told the House.Issuing a ministerial statement in Parliament, Nyagah said the taskforce has identified 169 pyramid schemes, adding that 16 were later registered as co-operative societies to escape the dragnet.Mischief discovered"Luckily, my officers discovered the mischief and they were stopped.They (the firms), however, went to court and we are defending our action," Nyagah added.The taskforce, Nyagah said, interviewed directors of the pyramid schemes to verify information gathered from the public, and also visited relevant ministries in search of facts. It is compiling a report and would hand it over to the minister in a fortnight, he added.Nyagah told MPs that pressure arising from the loss of billions forced him to act, saying about 20 people have committed suicide after losing their fortunes.When the schemes collapsed in 2007, some victims turned to the Kenya Anti-Corruption Commission (Kacc) for help but according to the law, the anti-corruption commission deals with public agencies or officials and is not mandated to pursue private individuals or institutions.The investors were advised to seek alternative redress in the courts, where the wheels of justice turn painfully slowly.Depositors were encouraged to deposit their money and "harvest" after a short period with interests of up to 300 per cent.High returnsThe masterminds started paying monthly interest rates of between 10 and 16 per cent. This means that someone who invested Sh100,000 would earn at least Sh10,000 a month from their investment. Those who invested Sh1 million would earn at least Sh100,000 a month in interest. For the scheme to survive, the masterminds and the initial beneficiaries spread word about the high returns, drawing in new investors whose money is used to pay interest and attract even more investors.Buoyed by the apparent good returns, many Kenyans took loans or sold assets to invest in the schemes that later crumbled like a pack of cards. Many are in debt or serious financial distress.Yesterday, Mr Danson Mungatana (Garsen, Narc-K) and Mr John Mbadi (Gwassi, ODM) questioned the measures the Government was taking to protect Kenyans from such fraudsters.But Nyagah said the report of the taskforce would be used to seal loopholes in the industry.

Big names in pyramid scam

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