24 February 2013

Uganda: Stanbic - How Staff Swindled Sh1 Billion

A spell of questionable cash withdrawals within hours and days of one another from what were long known to be dormant accounts raised eyebrows within the high echelons of Stanbic bank and triggered a police hunt.

A racket involving the bank's staff had stolen more than Shs 1bn using false identities. So far, 14 bank employees have been arrested and many more suspects are at large, the police say. The Observer has learnt that at the beginning of February, Stanbic bank managers filed a complaint with the police after learning that previously idle accounts had suddenly become active and money had been withdrawn.

According to the police, the swindled money was meant to pay pensions for former government workers who owned accounts in the then Uganda Commercial bank (UCB). The Observer has learnt from sources familiar with the investigation that the lid on the grand theft was lifted between July 2012 and December 2012 when formerly dormant accounts suddenly became active with deposits and withdrawals.

The most hit bank branches included Corporate Branch, Kampala; City Centre, Kikuubo; Hoima, Lyantonde, Mpigi, Moroto, Apac and Busia. Some tellers and bank managers of these branches have been arrested. When the idle accounts suddenly became active, Stanbic bank management decided to keep a tab on them until enough incriminating evidence was gathered.

The plot

Government would pay the pension money directly to the Stanbic bank accounts of its former employees. Police is still investigating the exact amounts dispatched, but government allocates billions of shillings annually to pension. The Stanbic staff involved in the scheme, the police say, would get the names of the inactive accounts or those belonging to the dead.

The staff would then connive with people on the outside and urge them to claim to be holders of the inactive accounts. The impostors would demand to reactivate the accounts. In the process of reactivation (which requires one to produce identification), false identity details of the impostor would be carefully introduced in the banking system, enabling the impostor to withdraw the money.

In other incidents, accomplices would be coached by the bank staff and they would demand to change their personal account details such as signatures or report loss of ATM cards. Identity details would then be changed with the knowledge of the branch supervisors. The false account holders would then be briefed on how the money would be withdrawn and at what intervals, and how it would be shared.

Stanbic bank staff would then process bank books and in some instances ATM cards to ease the withdrawal process. With the paperwork in place, the false account holders would then withdraw the money. The police have so far discovered that the fake account holders went to particular tellers, who were working in collusion with their supervisors or branch managers whose job it was to authorise the withdrawals.

"It means that the tellers and bank managers were aware of this scheme," a police source told us. The money would then be shared amongst the staff involved and the purported account holder.

What alerted the Stanbic bank management was the money trail, which they observed for some time before making the alarm. It was noticed that money credited to hitherto inactive accounts was being withdrawn almost immediately. For example, in Lyantonde, the bank swung into action when someone claiming to be a former employee of the ministry of Labour came to collect his pension.

On interrogation, it was discovered that the would-be pensioner was actually an impostor. Police have also discovered that some of the bank's tellers directly withdrew money from the inactive accounts. The scheme is not too dissimilar from the one in the ministry of Public Service where identities of genuine pensioners were altered and more than Shs 169bn withdrawn by an impostor.

Asked to comment on the matter, Police spokesperson Judith Nabakooba said she couldn't as investigations are still ongoing. On his part, Fred Mugisha, the Stanbic bank communications manager, said they await a report from the police.

"In the meantime, the staff involved in the incidents continue their suspension until the matter is disposed of, using our internal mechanisms. Those found guilty will be terminated," he told The Observer on Saturday.

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