Activist Shad Khalif has urged citizens to consider holding US dollars amid mounting concern over the impact of a major Minnesota fraud scandal, part of which has been linked to real estate investments in Nairobi.
Federal authorities in the United States are probing what prosecutors describe as an extensive fraud scheme in Minnesota that exploited federally funded child nutrition and aid programmes, including the Feeding Our Future initiative.
Investigators say the scheme involved lucrative reimbursements based on inflated or fraudulent claims for meals never delivered to children, and has led to dozens of indictments and convictions.
Several defendants are reported to have diverted stolen funds into property and luxury assets abroad, including in Kenya.
Court documents show some proceeds were used to purchase stakes in Nairobi developments, apartment buildings, and land in Mandera County, with investigations estimating that tens of millions of dollars were laundered into Kenyan real estate.
The Minnesota case has involved federal agencies such as the FBI, IRS Criminal Investigation and US Postal Inspection Service, all working to trace and seize assets linked to the fraud.
Reacting to the situation, Khalif warned that the scandal could influence diaspora remittances and foreign exchange stability in Kenya.
“If you have savings, it’s about time to start converting them into USD because we don’t know how the USD/KES rates will swing with the whole Minnesota fraud fiasco expected to affect diaspora inflows,” he said.
Diaspora remittances are a key source of foreign exchange for Kenya’s economy, and any perception of disruption or heightened scrutiny could affect market confidence.
Khalif’s remarks have sparked debate on social media, with some calling for calm and others urging heightened vigilance among savers and regulators as the US probe continues.