• Suspect drew cash 40 times in five days
• Money withdrawn from unopened accounts
Behind the ministry of Public Service pensions swindle is a tangled trail of stunning forgeries, complicities and fictitious bank cash withdrawals and payments of billions of shillings. Detectives' accounts describe a frenzied rush to draw billions of shillings within hours of being deposited.
In one instance in 2011, The Observer has been told by a detective familiar with the investigation, Peter Sajjabi, the general secretary of the East African Community Beneficiaries Association (EACBA), drew money 40 times from Cairo International bank between November 11 and November 15, taking Shs 2.5bn in that period alone.
Christopher Obeyi, the former principal accountant in the ministry of Public Service, and Sajjabi, are accused of withdrawing at least Shs 145bn, purportedly to be paid out to pensioners, according to an ongoing police investigation. In some instances, Sajjabi is said to have withdrawn the money before opening accounts, which further confirmed that the syndicate operated with the full knowledge of some staff at Cairo International bank, where the accounts were opened.
The Auditor General's special investigation, which covered the period between October 2009 and September 2012, was meant to ascertain where the fraud was committed and who was responsible. It is suspected that about Shs 169bn was lost through dubious payments, including to a ghost law firm that was paid Shs 15bn.
Obeyi, who is once again in detention, faces several charges of forgery and causing financial loss. On top of that, the police on Wednesday started investigating claims that he connived with other people to cause the payment of over Shs 1bn to fictitious claimants through the Administrator General's office.
According to investigations, the ministry of Finance would send money to Cairo International bank. One or two days later, an account would be opened and on the same day, Sajjabi, now back in detention as well, would be introduced as one authorised to withdraw money on behalf of the beneficiaries. Sajjabi would then return the next day to withdraw the money.
This would happen after Sajjabi had purportedly been introduced by the beneficiaries to withdraw the money on their behalf as the general secretary of the EACBA. However, the police discovered that the letters of introduction and authorisation for Sajjabi to withdraw the money were forged. Once the transactions were completed, a source at the bank said, Sajjabi would walk to the underground parking, where the bank staff would stuff the cash into his tinted car.
"If you look at all the pay slips, Sajjabi didn't sign anywhere. If he had been authorized by the pensioners like he claimed, he should have produced his identity card as well as that of the pensioners and then signed on the pay slip," a detective said. "However, that didn't happen, which showed a weakness on the bank's side. As it turns out, the top managers knew something."
It was also discovered that in some cases, the introductory letters for opening accounts in Cairo International bank were made after the money had been withdrawn from the accounts. For example, introduction letters to open 18 of the 29 accounts where payment requests were honoured on January 17, 2011 were made after this date.
The schedule in the Auditor General's investigative report shows, for instance, that Jackson Atiku was paid Shs 56m on January 17, 2011. However, on January 20, 2011, Sajjabi introduced Atiku to open an account with Cairo International bank and on the same day he (Sajjabi) was introduced to withdraw money on Atiku's behalf.
The following day, January 21, 2011, Sajjabi returned to withdraw the money. On this particular day, Sajjabi made seven withdrawals of Shs 56m, Shs 70m, Shs 60m, Shs 79m, Shs 58m, Shs 57m and Shs 68m. The day before, Sajjabi using the same method, had made six withdrawals of Shs 57m, Shs 74m, Shs 64m, Shs 58m, Shs 60m and Shs 55m. In total, Sajjabi withdrew Shs 1.9bn in January 2011.
In July, Sajjabi withdrew Shs 550m in just eight installments. The busiest period, however, was in November 2011 when Sajjabi made 40 withdrawals between November 11 and November 15 worth Shs 2.5bn. The scheme goes as far back as 2010, and according to the police, the schedules generated were traced to the computer of the ministry's IT Manager, Francis Lubega, but generated by Obeyi.
"These schedules contained lists of pensioners that were not verified and/or assessed by the relevant sections of the ministry of Public Service and did not exist in the ministry's data base," Auditor General John Muwanga noted.
The schedules were later submitted to the ministry of Finance with a covering letter, usually signed by Obeyi and Jimmy Lwamafwa, the Permanent Secretary in the ministry of Public Service. The investigation also discovered that Obeyi would submit soft copies of the schedules for payment of gratuity to the IT section of the ministry of Public Service to encrypt and forward to the Uganda Computer Services department in the ministry of Finance.
After that, the payment schedules would be processed by the Treasury and then sent to Bank of Uganda for payment. The investigation also discovered that Sajjabi and his cartel used the weaknesses in the pension scheme system to cream off at least Shs 169bn over a long period. It was discovered, for instance, that there was no internal audit of all pension files before any payments were effected in the absence of a Commissioner for Compensation.
"In the absence of adequate information on the files, it is difficult to conclude on the genuineness of the pensioners. Management should review pension processes to ensure that only files with adequate documentation are processed and paid," the Auditor General's office concluded.
Nine of the suspects in the pension scam have been remanded to Luzira prison until Thursday when they return for hearing of their bail application. They appeared before the anti-corruption court yesterday and denied charges of abuse of office, causing financial loss, embezzlement, and conspiracy to defraud.
The suspects are Jimmy Lwamafa, the permanent secretary in the ministry of Public Service; Kiwanuka Kunsa, the director of Research and Development; Christopher Obeyi, the principal accountant; and David Oloka, the senior accountant.
Others are Francis Lubega, the information systems analyst; Stephen Lwanga, the accounts assistant; Peter Sajjabi, the EACBA chairman; Ssentongo Ishaka, the assistant manager of operations, Cairo International bank; and Rahama Nakigozi, the compliance officer, Cairo International Bank.