The directors of 45 hospitals are under investigation on suspicion of fraudulently pocketing over half a billion shillings in a spam of nine months since October last year to July this year from the Social Health Authority (SHA).
A confidential intelligence report sent to the Directorate of Criminal Investigations (DCI) has termed the facilities as special purpose vehicles created to corruptly siphon SHA money as they did not receive finds from any other sources during the period of the investigation.
A majority of the owners of the suspected hospitals located mainly in Mandera, Wajir and Kisii; some who are as young as 25, transferred all the money suspected to have been obtained fraudulently through fictitious claims from SHA withdrew all the cash or used it to purchase assets like luxury cars and houses.
The rest, who are doctors in public hospitals or employees of the Ministry of Health have been recommended for investigation on suspicion of unethically referring patients to their private facilities for personal financial gain
This is as thousands of patients across the country continue to suffer after being turned away from receiving medical attention due to cash flow stress caused by low SHA settlement rates by the government to private facilities that are not well connected or refuse to part with bribes.
“Between October 2024 and July 2025, the entities received a combined total of Sh558,641,803.34 from the Social Heath Insurance Fund and Primary Healthcare Fund,” says the intelligence report from the Financial Reporting Centre (FRC) which was sent to the DCI on September 2.
“Notably, these accounts only received funds from SHIF and not from any other sources pointing to probable use to siphon funds from SHIF as special purpose vehicles,” says the report.
The FRC is an independent body whose principal objective is to assist in the identification of the proceeds of crime and combating money laundering, terrorism financing and proliferation financing.
“You may wish to investigate whether the hospitals and medical centres are involved in fraud through receiving funds from SHIF,” FRC Director General Saitoti told his DCI counterpart Amin Mohammed.
Yesterday, DCI Amin did not confirm receipt of the intelligence report which was submitted to his office on September 2 and neither did he tell us the status of investigations.
A number of the hospitals in the list forwarded to Amin have however already been suspended from receiving SHA payments, an indicator that investigations are gathering pace. Those suspended and are on the FRC list include Filyne China Hospital, Westlife Hospital, Kotiende Medical Centre and Selcare Health Services.
According to FRC in its recommendations, the directors of the suspected institutions should be investigated for among other crimes embezzlement of public funds, fraud and obtaining money by false pretenses.
Among the red flags which the FRC noted in the operations of the suspected hospitals is the fact that their bank accounts were only receiving money from SHA and not from any other sources like cash, MPESA or other medical insurance schemes.
“This is suspicious because it is not practical that all the patients who visited the facility were covered by SHIF,” FRC has noted in several of the flagged hospitals suspected of money laundering.
Others were newly registered medical facilities without any online presence or had dormant bank accounts until they suddenly began receiving huge cash deposits from SHA or received money from the state-owned health insurance without supporting documents.
According to sources, a few of the facilities which received up to Sh85 million during the period in question have since had their accounts frozen or have been degazetted while the rest are still in operation unaware that they are under investigation.
Among the hospitals under investigation, 21 are located in Mandera, 11 (Wajir), six (Kisii), three (Migori) while Homabay, Bomet, Nairobi and Garissa have one hospital each under investigation.
Chelymo Medical Centre in Bomet is according to the data from FRC suspected to have received the highest amount of fraudulent cash during the period under investigation. Between February 2 and June 19, the hospital received a total of Sh85 million solely from SHA. Apart from this being unusual, the hospital “did not provide supporting documents for the transactions despite bank follow ups.”
In Kisii, three hospitals owned by one Filmre John Okeiga received a total of Sh90 million between January and June this year, an anomaly described by investigators as a sudden spike in receipt of huge amounts of cash to new bank accounts.
Westlife Hospital for instance Sh59 million between January 1 and June 19. It’s sister hospital Eastlife Hospital received Sh18 million between January 14 and April 22 while Okeiga’s third facility Filyne China Hospital received Sh12.2 million from SHA within a span of one month from May 16.
While this does not look weird at a glance, the fact that Filyne China which does not exist physically was registered on March 17, just two months before the transactions started is what raised eye brows.
Additionally, an assessment of bank accounts operated by the three hospitals owned by Okeiga show expenditures that are not usually related to hospital services. For instance, Westlife sent Sh9 million to Machira and Mukiri for the purchase of property. It also spent Sh2.3 million on birthday expenses, Sh5.9 million for the purchase of a house and Sh2.9 million for buying a car.
Still in Kisii, BFN and Trenya Hospitals have been flagged for receiving Sh5.3 million and Sh20 million during the period of the investigation without credits from other sources at all. On receipt all the money was transferred to bank accounts or Mpesa wallets belonging to the directors.
On the other hand, Summit Medical Care which is located at Chebilat, along the border between Nyamira and Bomet which received Sh12 million has been flagged because all the received money was withdrawn in cash below the reporting threshold of Sh1 million.
Additionally, FRC noted that one of its directors works for government presenting a possible conflict of interest. The hospital is owned by Shem Onduso and his wife Stella Misati who is also the sole signatory of its bank account at Cooperative, Keroka branch.
Until it suddenly began receiving millions of shillings from SHA, the hospital which was registered in May last year had been getting small credits ranging from Sh100 to Sh4,000 since its inception.
“Further, Stella Moraa Misati has been employed by the Ministry of Health as a medical laboratory technologist which may suggest she is conflicted by operating a hospital,” said FRC.
In neighbouring Migori and Homabay; Bware Complex which is barely two years old received Sh17.5 million between February and June this year, Kotiende Medical Centre (Sh9 million), Sayayi Hospital (Sh3 million) and Bwana ni Mwema Medical Centre (Sh46 million).
According to FRC, Bware Medical Centre did not provide any supporting documents for the Sh17 million it received despite numerous follow ups from Equity Bank while Kotiende’s director Kennedy Odiwor withdrew the entire Sh9 million received by his hospital through his Mpesa account.
“It is possible, the company is a briefcase company created to siphon SHIF funds,” said FRC of Bware Medical Centre.
Sayayi Medical Centre and Bwana ni Mwema Medical Centre are both owned by Caleb Marwa, a young doctor who graduated in 2017 and works for the Migori County Government. The two hospitals jointly received Sh49 million between November last year and June this year.
While this is not unusual, detectives have pointed out that Sayayi’s Cooperative Bank account was started receiving millions of shillings from SHA just 10 days after the account was opened on April 4 this year. Additionally, all the cash was withdrawn through Marwa’s Mpesa account and though cash withdrawals.
A similar pattern happened with all the Sh46 million that was received by Bwana ni Mwema Medical Centre. When contacted Dr Marwa became agitated and told us to get something better to do.
“You guys should look for better stories to write about instead of looking for smoke where there is none,” he said.
In Mandera, where the SHA payment fraud is suspected to have happened the most, 21 hospitals are under investigation for fraudulently receiving a total of Sh148 million.
Top on the list is Shamaal Hospital which received Sh35.2 million between October last year to June this year. Investigators suspect that the hospital’s two directors Ali Abdi and Khalif Yusuf have a conflict of interest. Dr Ali works for the Mandera Hospital where Yusuf is the chair of the board.
“Dr Ali’s dual role as a county employed medical professional and co-owner of a private hospital within the same region suggests a potential conflict of interest. His business partner Yusuf is the sole director of Mandera Drug Mart, a pharmaceutical company which receives payments from various hospitals across northern Kenya,” said FRC.
“Khalif’s ownership of a pharmaceutical distribution company that appears to be a key supplier to healthcare facilities within the same region possibly under the influence of his business partner presents a heightened risk of preferential treatment,” noted FRC.
The FRC also flagged North Karsa Nursing Home which received Sh4.4 million, Eagle View Medical Services (Sh17.2 million), Derkhale Medical and Diagnostic Centre (Sh5.5 million), Bogso Nursing Home (Sh6.2 million), Berisamat Medical Centre (Sh3.8 million) and Busbus Medical Centre (Sh6.1 million) within the same region.
The six facilities were flagged after they were found to have received the millions of shillings in their accounts from SHA and not any other source between January and June this year. Hospitals primarily receive money from different sources.
Even more interesting is the fact that all the money was withdrawn through Mpesa by the directors of the facilities immediately it hit their accounts. Additionally, some of the hospitals like North Karsa, Gallant and Derkale did not provide any supporting documents for the received funds.
Still in Mandera Ayale Nursing Home received Sh17.8 million which was all withdrawn by its 31-year-old director Mohammed Amin Ahmed through the counter at Equity Bank. Ruweida Nursing Home received Sh2.5 million between May 16 and 17 June. This was just three months after the hospital was registered on 11 March by Ruweida Ali Oke, a 25-year-old man.
“The money was withdrawn using rapid cash withdrawals,” noted FRC.
Other facilities in the county which received suspicious deposits from SHA include; Lagkaro Medical Centre (Sh9.4 million), Munaza Nursing Home (Sh1.4 million), Manal Medical Centre (Sh7.4 million), Ibdulmajah Nursing Home (Sh5.2 million), Borehole 11 Nursing Home (Sh5.8 million), Lambar Nursing Home (Sh2.3 million), Mahnaz Nursing Home (Sh12.5 million, Summer Spring Nursing Home (Sh5.2 million) and Kalalio Nursing Home (Sh3.4 million).
All these had a similar pattern of having dormant accounts which suddenly began receiving a lot of money from SHA. Some like Manal and Mahnaz are run by directors who also work for the count government of Mandera as doctors.
In Wajir, Wajir Bora Medical Centre received Sh12.8 million, Sheletey Nursing Home (Sh13.4 million), Wajir Medical Nursing Zone (Sh5.8 million), Almo Nursing Home (Sh9.2 million), Second to None Hospital (Sh9.9 million), Al Rayan Family and Childcare (Sh3.2 million), Al Naim Medical Clinic (Sh8.1 million), Baren Hospital (Sh6.1 million) and Rasmal Medical Centre (Sh8.7 million).
Others which receives suspicions amounts during the period in question are ADC Nursing Home (Sh4.3 million), Tulatula Nursing Home (Sh4.9 million), Leheyley Medical Centre (Sh5.5 million) and Eldas Health Centre (Sh8.6 million)
In Nairobi Selacare Health Services which is located in Pipeline Estate and which has since been banned from receiving payments from SHA received Sh10 million between March and June this year. All the money was withdrawn from Sidian Bank through small transactions by Rose Njeri.
“She insisted that all the funds were for payment of staff,” noted FRC.
