Bank busts Shs8 billion pension scam

 

By  CHRIS OBORE

In Summary

Fraud scheme was discovered after one of the bank employees, who had been approached by the fraudsters to facilitate the withdrawal of the money, blew the whistle at Ntinda branch of the bank.

KAMPALA- Stanbic Bank has bust an inside fraud syndicate in which the schemers attempted to siphon at least Shs8.6 billion of pension money stashed away on fake accounts in the bank.

Sunday Monitor has established that government officials handling pension money collude with some bank officials to open several accounts through which money is deposited as payment to pensioners who actually do not exist, commonly known as “ghosts.”

In the Stanbic Bank case, the email trail among bank staff, copies of which Sunday Monitor has seen, shows that the fraudsters succeeded in withdrawing some money in other branches before the bank blocked the accounts.

The fraud scheme was discovered after one of the bank employees, who had been approached by the fraudsters to facilitate the withdrawal of the money, blew the whistle at Ntinda branch of the bank.

A staff, who blew the whistle, says in an email to the Stanbic bank Chief Executive Philip Odera, that there were more than 200 suspicious accounts through which the fraudsters had intended to steal at least Shs8.6 billion public funds deposited as money for pensioners.

After the arrest of one of the suspects who had gone to withdraw the money at the Ntinda outlet, the Branch Manager, Ms Josephine Nalumansi Kasozi, wrote to the bank headquarters and alerted them of the scam.

“There is a fraudster who has been arrested at Ntinda branch. He attempted to withdraw Shs25 million using a deposit slip on a/c-9030001862587 for account name N ORWOTHO. This is a dollar account with a balance of about $25,000. The home branch is Garden City. More details will be availed by the security officer copied herein,” reads Ms Nalumansi’s email to Mr Arthur Kiwanuka, at Stanbic Bank headquarters in Kampala.

She received a response from another bank official, Mr Frank Kiiza, who said: “Hi Josephine, Clayton in copy of this mail is running with the case and will provide the required details. Thank you.”
Bank sources said although the fraudsters were handed over to police, the bank never followed up the case. The bank’s risk specialist who handled the matter left under unclear circumstances.

Mr Odera declined to comment on the matter when Sunday Monitor contacted him. He referred us to Mr Fred Mugisha, the bank’s spokesperson whom he said would brief him later.
Mr Mugisha feigned ignorance of the matter.
“What you are telling me is news. We do not have such accounts; those are allegations from a whistleblower,” Mr Mugisha said.

He, however, admitted “there was an attempt and the fraudsters were arrested”.

Later, Mr Mugisha called Sunday Monitor, saying: “Fraudulent accounts always happen. The moment the bank gets to know, we block them.” He said the fraudsters arrested in Ntinda “wanted to withdraw money from some doctor’s account. The doctor is based in South Africa; he (fraudster) wanted to draw money from a genuine customer’s account. The case is in court and we can’t disclose details”.

According to audio recordings accessed by Sunday Monitor, the fraudsters reveal how they were directed to contact one Levi Malinga, the relationship manager for executive banking, to assist them in withdrawing the money on promise to give him “good benefits” for his services.
“We have already withdrawn from Entebbe Branch,” one voice of a fraudster is heard.

After the arrest of the fraudsters, they threatened to kill the banker, Mr Malinga who blew the whistle. Sunday Monitor was unable to contact Mr Malinga but according to the email exchanges within the bank, Mr Malinga reveals that the bank turned against him after the saga and he now fears for his job and life.
In an email to the CEO, Mr Malinga says: “Fraudsters approached me early this year and wanted me to assist them take away the money that was in accounts held in various branches. And they told me the accounts were more than 200 and gave me some of them which I forwarded to FCC.”

“Before I reported to FCC, I consulted all stakeholders and some people had advised me not to report. However, with the love for my job and the bank, I went ahead and blew the whistle, leading to the arrest and confiscation of the fraudulent accounts and the bank was able to save huge sums of money from being stolen although still the fraudsters managed to beat us and took some money,” he adds.

Mr Malinga petitioned Mr Odera to intervene because he was being asked to sign a performance contract yet he had been a star performer receiving awards of recognition.
But since the threats to his life started, Mr Malinga said he had been shuffled from one branch to another, which affected his performance rate.

A source in the bank headquarters said Stanbic Bank employees fear performance improvement contracts becau

He says his immediate supervisors had come hard on him on performance yet they were aware of the threats to his life and his request to be put in a position where he does not come face to face with clients was rejected.

Mr Mugisha, however, says performance contracts are a standard bank procedure for everyone but Mr Malinga “must have not performed to the expectations of his current managers”.

Asked why the bank seems not to protect Mr Malinga for blowing the whistle against fraud, Mr Mugisha said: “Moving him from one branch to another was to protect him on his request. There are many things the bank does to protect staff.”
Since May 7, when the fraud was averted, Mr Malinga has been moved to Fort Portal, Gulu and now Lira branches.

ATM fraud: How bank staff stole my money

She walked into the bank to pick her money and proceed with her retirement project. She walked away in shock and despair.

The big chunk of the Shs11.4million in the account had been taken leaving only Shs3 million. She had never withdrawn her savings for one year.

“I went to the bank to check on the account because I didn’t use the money in it. I wanted to use it to continue with building,” said Ms Chota Margaret Muraa.

Ms Chota, who has just retired from Ministry of Health, had prepared for life outside office work. She started a business in Adjumani District. She also invested part of her savings in building a high-rise house. She completed only the ground floor which MTN hired. The Shs5 million MTN paid to her in rent was deposited on her savings account.

Fraud
“When the MTN put the money on my account last year, I left it because I wanted to invest it in the building. On September 22, I went to the bank to check and withdraw the money and resume construction, the money had been withdrawn two weeks earlier,” Ms Chota narrated.
Ms Chota said she contacted the branch manager and demanded a full statement.

“The statement showed that some money had been withdrawn from my account the same time as I was talking to the manager,” she said. The manager asked for three days to give her feedback on what could have happened.

“They told me my money had been withdrawn using an ATM card printed at Stanbic Bank Kabwohe branch,” Ms Chota said. Kabwohe is in western Uganda while Adjumani is in West Nile, northwest of Uganda.

According to the statement certified by Stanbic Bank Adjumani branch, the first transaction on the account was done on September 10 this year with a withdrawal of Shs700,000 using an ATM at Kabwohe branch.

On September 11, Shs200, 000 was withdrawn and another Shs500, 000. On September 12, the bank charged the account Shs10, 000 as management fees. But on September 14, another Shs400, 000 was withdrawn at an ATM in Wandegeya, Kampala and on the same day, another Shs100, 000 was picked from Ntinda Branch.

On September 15, Shs95, 000 was first withdrawn at Kabwohe and on the same date Shs605, 000 was also withdrawn at the same place. The next day, Shs700, 000 was withdrawn at an ATM in Ishaka also in western Uganda. From September 17 to September 22, Shs700, 000 was being withdrawn daily from the account both in Kabwohe and William Street in Kampala.

Stanbic Bank spokesperson Fred Mugisha said: “Our fraudulent staff printed a card and withdrew the money. The bank is going to refund Chota’s money because it was withdrawn fraudulently

He said the bank would discipline the staff involved by either suspending or dismissing them.
Mr Mugisha said two other staff had been dismissed for having printed a card and given it out fraudulently.

But Ms Chota is unsettled. “Will they really pay back my money; I hope they are not going to complicate my life. I have just retired and have all my accounts in Stanbic Bank.” She says her trust in the banking system has diminished.

“I shouldn’t be made poor at my age yet I had planned my life after work,” she said.

se they have often been used as a basis for dismissal.
“My performance came down because I was living in fear for my life where I could not freely walk on the streets and look for sales. All the time I would imagine someone would shoot me following a gun attack on me by fraudsters that was foiled in Kireka,” reads the mail.