21 January 2004

Mozambique: BCM Fraud: Ramaya Blames the Computer

Maputo — Testifying before the Maputo City Court on Wednesday, former bank manager Vicente Ramaya, accused of designing the fraud that led to his employers, the Commercial Bank of Mozambique (BCM), losing 144 billion meticais (14 million US dollars, at the exchange rates of the time) in 1996, based much of his defence on an alleged fault in the bank's computer system.

Ramaya managed one of the BCM's first fully computerised branches, in the Maputo suburb of Sommerschield, and he told the Court that the computer gave the staff headaches right from the start - particularly when it came to distinguishing between normal and guaranteed cheques, which is a key issue in the fraud case.

Between 26 March and 9 August 1996 a total of 67 fraudulent cheques for huge sums were deposited in accounts opened at the Sommerschield branch by members of the Abdul Satar family and their associate Yasser Mahomed.

The cheques were drawn on accounts held in provincial branches of the BCM which contained virtually no money at all (and in one case had even been closed down). Yet Ramaya treated the cheques as good, and the money was credited to the Satar accounts - quickly leaving again as hard cash.

Ramaya said the cheques were credited because they were guaranteed, and a guaranteed cheque is as good as cash. Yet the bank's computer records show that the cashiers entered all the cheques into the computer as normal ones.

The codes are different: for a normal cheque, the operator should key "00" and for a guaranteed cheque "10". Ramaya's argument is that, despite the computer evidence to the contrary, all the cheques were really guaranteed, and the computer was defective.

He claimed that, for large amounts, the computer failed to recognise the "10" code, and regarded all cheques as normal. He admitted that no such problem happened when tests were run on the computer immediately before the branch opened in late 1995, but claimed that was because the dummy run had been for small amounts.

Ramaya said he had repeatedly talked to the two computer technicians temporarily stationed at the branch, Judite Ngoenha and Neves Correia, about the alleged problem, but they were never able to solve it. Every month, from April to July 1996, he complained to his superiors, he claimed. He even said he had threatened to resign over the issue.

"The problem was known to the structures of the bank. I never hid anything", Ramaya said. "For cheques of 500 million meticais and above the computer always had problems".

The prosecution, however, notes that there were large guaranteed cheques that the computer dealt with properly. Indeed, the only indisputably guaranteed cheque where the problem is known to have occurred was one for 300 million meticais, for the legitimate air transport company, STA. The prosecution suspects that the problem with this cheque, issued towards the end of the fraud, was deliberately manufactured, in a late attempt to make the computer look unreliable.

Further evidence that the fraudulent cheques were not guaranteed is that the computer deducted commission from many (but not all) of them. But guaranteed cheques pay no commission at the receiving bank, because they have already paid at the issuing branch. Where commission (of 1.5 per cent) is really paid is on a normal cheque that the client wants to have cleared more rapidly than usual.

Again Ramaya, confronted with evidence that the cheques could not have been guaranteed, blamed the computer. The charging of commission was just another computer glitch.

One might have thought that, if he really faced a serious computer problem, Ramaya would have welcomed the presence of trained computer specialists. But no - he said Nguenha and Correia stayed at Sommerschield much longer than normal, and he found this highly suspicious. "I think they were part of the fraud", he declared. "Only after the fraud had begun did they leave the branch".

Since the computer was not crediting the cheques to the accounts, "We had to find other ways of giving the money to the clients", said Ramaya. That meant manually overriding the computer, and only two people in the branch - himself, and deputy manager Ligia Pires - had the clearance to do that.

Ramaya's evidence flatly contradicts that given by the other former Sommerschield workers to the court earlier this month.

Pires said she didn't know anything about the supposed problem with the "10" code. She said she never experienced any problems with the computer (except when the system crashed because of a power cut).

Pires continued to work at the Sommerschield branch from the time Ramaya was suspended, in early September 1996, up until June 1997. She said that throughout these ten months there was no problem with depositing guaranteed cheques, with computer glitches and the "10" code. "Nobody ever mentioned it", she said.

Likewise Virginia Chavanguane, who worked in the Sommerschield treasury. She said she knew nothing about a computer anomaly with the "10" code until after the fraud.

As for the three cashiers who gave evidence, they said they were unaware of any problem with how the computer handled cheques - until Ramaya told them, or until members of the Satar family complained that the money was not in their accounts. None of the cashiers thought this was a serious problem, and they said that Ramaya never called any meeting to discuss it.

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