Three police officers including a senior one were Tuesday arrested in Busia town with fake money.
The officers included Director of Criminal Investigations Officer serving in Bungoma County.
Kahindi, a superintendent of police had travelled from his work station in Bungoma with the juniors for a mission to “clean” the fake 415 leaves of 100 US dollar bills when they were intercepted.
Police said they had been tipped off the officers were carrying fake cash when they stopped the three who were travelling a saloon car.
The suspects were arrested by colleagues who seem to have had a prior brief on the mission before striking.
The officers recovered 41,500 fake US dollars (Kshs 4.3million) and Sh2, 000 fake Kenyan currency from the DCIO’s pockets. This was after they were ordered at gunpoint to lie down.
The three were interrogated until late in the night to establish the source of the fake money. The two juniors said they were asked by their senior to accompany him to Busia and did not know his mission.
The two officers were armed at the time of the incident, but the DCIO did not have a weapon.
Director of Criminal Investigations George Kinoti said he had sent a team from Nairobi to Busia to take over the investigations into the incident.
The DCIO and his accomplices were released from police custody Wednesday morning pending the outcomes of the probe.
He was told to hand over to his deputy and wait for a verdict of the investigations.
This comes amidst reports of increased circulation of fake currency in the country ahead of the deadline for demonetisation.
Last week, three men were arrested in Machakos for being in possession of fake 1,000 new notes of Kenyan currency.
Police say the fake currencies are now in circulation in major towns as syndicates shy from operating in Nairobi.
Two weeks ago, police recovered several US dollars and Euro fake papers, which were in different stages of manufacturing near Coptic Hospital along Ngong Road.
Pedestrians using the feeder road spotted some of the papers splashed on the roadside and collected few before calling the police.
Police from Kilimani visited the site and collected the papers before driving to the station. They established that US$640,000 (Sh66.3 million) fake papers were ready for distribution to the market while US$2.4 million (Sh249 million) were in the final stage of formation.
There were also 2,350 fake Euros and 15 litres of washing chemicals in powder form.
In May this year, nine suspects were arrested in Kilimani area and fake Sh190 million (US$1.9M) recovered from them.
This came two days after another group of seven was nabbed with fake Sh300 million in a house in the same area.
Police investigations show counterfeit banknotes remain the top form of fraud for the increasingly growing mobile money and bank agents in Kenya.
In its annual report for the period ending June 2017, the Central Bank of Kenya (CBK) acknowledged the possibility of a transnational fake currency ring in Nairobi and the region.
“CBK and other East African Community (EAC) central banks held a joint meeting with the Eastern Africa Police Chiefs Cooperation Organisation (EAPCCO) in September 2016 to develop strategies for enhancing the fight against counterfeit crime, one of the emerging transnational crimes.”
This comes at a time when CBK is conducting demonetisation. The deadline for the exercise is September 30 and the bank regulator says there will be no extension.
So far, banks have collected more than 100 million pieces of old Sh1,000 notes out 217 million pieces that were in circulation when the demonetisation was announced, CBK Governor Dr Patrick Njoroge said.
CBK announced on Madaraka Day it was withdrawing the old notes in a bid to counter counterfeits, corruption and money laundering.
During the demonetisation period, individuals exchanging less than Sh1 million of the old notes and non-account holders were instructed to exchange them through the currency centres, CBK branches and commercial banks.
Bank customers and non-account holders having an excess of Sh5 million are required to get CBK’s approval.
The old generation banknotes will be worthless papers from October 1, 2019. There have been cases where fraudsters have been making fake notes to gain during the demonetisation period.
To beat the threat, banks and other handlers were asked to be cautious when handling the new notes.