How Kenyans Lost Ksh1.4 Billion in Agribusiness Deal Promising 340% Returns

The Financial Reporting Center has revealed ongoing investigations into a greenhouse investment scheme where several Kenyans lost close to Ksh1.4 billion.

In its report covering 2024, the center detailed that an individual (whose name was withheld owing to the investigations) created five companies and marketed greenhouses as an investment opportunity.

Those seeking to invest were encouraged to invest Ksh380,000 with a promise to make 340% (Ksh1.29 million) in 3 years.

To make the deal enticing, the scammer also partnered with a real estate company, and investors were promised that the returns could be used to purchase homes.

"The individual also partnered with a real estate company for the purpose of investors channeling their greenhouse returns towards the purchase of homes discounted at 15%," read the report in part.

"The investors were also required to market the product to earn more returns. None of the investors was given a legal document towards ownership of the greenhouses."

In the end, the scammer collected Ksh1.4 billion, indicating that slightly over 3,600 investors put their money in the scheme.

The government agency reported that some of the investors received part of their returns, but along the way, the majority of the investors failed to get back their money and the promised returns.

"The funds were utilized through immediate cash withdrawal. The initial investors who deposited funds at the start received returns; however, subsequent investors did not get any returns. The cheques issued as payment for the return of investment were dishonoured.

"At the time of the investigation, the accounts operated by the individual had 283 dishonoured cheques," the center added.

Here are some of the red flags that investors missed, and you can look out for them from such investment opportunities.

Promise of unrealistic high returns

The scheme lured investors by promising 340% returns over just three years. This offer exceeds standard market returns in agriculture or real estate.

Such exaggerated profits are a red flag in fraudulent investment schemes, often used to attract large volumes of unsuspecting investors quickly.

Recruitment-based earnings structure

Investors in this case were required to market and recruit others to the scheme in order to earn additional returns.

This mirrors some pyramid schemes, where the focus is less on the product or service and more on bringing in new money through fresh participants.

Lack of regulatory oversight

The entire investment model, despite involving large sums and public participation, was not registered with any official regulator such as the Capital Markets Authority (CMA).

This lack of regulation left investors with no legal protection or oversight.

Suspicious banking activity

The individual behind the scheme received over Ksh1.4 billion in multiple deposits into personal bank accounts. These deposits were often of similar amounts, hinting at structured payments from numerous individuals.

This pattern is typical in fraudulent schemes where perpetrators attempt to avoid detection by anti-money laundering systems.

Unexplained source of income

There was no clear explanation for how the promised profits would be generated from greenhouse farming. Investors were expected to trust vague, sophisticated explanations of returns, without receiving transparent or audited financial projections.

A lack of clear, legitimate revenue sources is a major warning sign.

Complex business model

The scheme was presented as a combination of agriculture (greenhouse leasing) and real estate (discounted home purchases), all operated through a network of five companies owned by one individual.

The model was intentionally elusive, which made it easier to deflect scrutiny and difficult for investors to verify the legitimacy of their investments.