MTN staff, cleaner and mobile money agent get 9 years for fraud

Former MTN staff as they were being sentenced to nine years imprisonment over fraud at the High Court in Kampala on April 27. PHOTO BY ABUBAKER LUBOWA

What you need to know:

On April 27, 2015, the Anti-Corruption Court in Kampala convicted six of the nine MTN staff for illegally accessing the company’s mobile money system and transferring over Shs3 billion to various MTN Agent lines and later shared the booty. ANTHONY WESAKA attended the court session and brings you the highlights of the judgment by the head of the Anti-Corruption Court, Justice Paul Mugamba. The judge’s findings and observations have been edited

KAMPALA- Forty prosecution witnesses (PWs) testified. They are named as PW1-PW40.
The case for the state is that on January 25, 2013, a sum of Shs3,150,000,000 was transferred from the MTN Dispute Account in seven equal installments of Shs450,000,000 each to MTN Agent lines by fraudulent means.

A detailed explanation was given regarding how the mobile money system operates, by PW2 in particular. It was stated that the system operates in an external environment which involves banking and agents as well as subscribers on one hand.
On the other hand is the internal system called fundamo specifically for mobile money. Within fundamo there is the bank control account and the dispute account. A deposit is made by an agent on an escrol account in Stanbic Bank.

That deposit is then electronically synchronised into fundamo through the dispute account and onward to the intended beneficiary. It was prosecution evidence that what comes through the fundamo system and gets out is influenced by virtual cash, floats.
It is the prosecution case that what happened on January 25, 2013, was loss which occurred when the dispute account was debited. The loss was to MTN consequently.

Money moved to subscriber accounts
The prosecution said the money which went into Agent lines was later transferred to a total 138 subscriber accounts and that it was withdrawn in cash or tokens.

Immediately this was detected by the system which was closed and investigations commenced. It is prosecution case that whatever left the dispute account on the occasion comprises the money allegedly stolen.

Exhibit P.21 shows journal transactions which happened pertaining to this case between 10:21:25am and 10:27:20am on the stated date. The agent accounts involved were Ari Telecom and Phone Accessories Ltd on line 0772201316, Ari Telecom and Accessories Ltd on line 0772201317, Ari Telecom and Accessories Ltd on line 0772201318, Tyra Enterprises Limited Rubaga on line 0772102087, Wesley Investments Ltd Rhino Camp Arua on line 0772100889, Rukungiri District Employees Co-operative SACCO Rukungiri on line 0772101427.

The Dispute Account was on the occasion debited and Shs450,000,000 was transferred to each of the lines, bringing the total amount deducted to Shs3,150,000,000.

The prosecution led evidence to show that the journal transactions in issue were carried out using a computer which belonged to MTN and was located in the recreation centre.

It was not in contention which computer it was which generated the journal transactions alluded to.
None of the accused persons was arrested in the course of committing the offences alleged against them. The prosecution arrested them subsequent to the transactions and assembled what evidence there was linking them to the charges.

Evidence against Serunkuma
Regarding Serunkuma, evidence was adduced by PW4 that Serunkuma gave a flash to Ayebare who would insert it in one of the computers on the 9th floor and obtain some information. PW4 testified that Serunkuma paid money to Ayebare amounting to Shs600,000. It was his evidence that on January 27, 2013, Serunkuma made the final payment of Shs500,000.

On his part PW20 testified that between January 25, 2013 and February 2013 he recovered US$11,500 from Mariam, sister to Serunkuma. PW20 could not recall the exact date but he said it was at Central Police Station (CPS).

On his part, PW21 stated that he recorded a charge and caution statement from Serunkuma on February 2, 2013. In that statement Serunkuma admits to have participated in the fraud together with Magombe, Segujja, Matovu and Kauma.

The forensic report, PW32 alleged that Serunkuma sourced a key logger which was used to capture information from the computer on floor 9.

It was his allegation also that Serunkuma co-ordinated the exercise using Kauma and Ayebare at different stages. PW34 testified that he found Serunkuma at home in Bwaise with a black Nokia phone, single line. There were several MTN numbers in the phone and it was his finding that Serunkuma had sent Shs50m to Kulaba using the same phone.

He took Serunkuma to Kisugu Police Station. PW34 added that on February 1, 2013 Serunkuma admitted to have stolen some of the money and kept it with a girlfriend. The girlfriend could not be traced but Serunkuma’s sister, Mariam Semwanga, brought with her US$11500 she said she had received from his girlfriend.

It was his evidence Mariam produced the money after Serunkuma called using his phone which was being kept by PW33 at the time. It is PW34’s further testimony that it was PW39 who handed over the Nokia phone recovered from Serunkuma to the storeman following its recovery by PW33 on February 3, 2013.

The messages were taken in picture and handed to him. He stated also that when Serunkuma’s home at Bwaise was searched, nothing was recovered but that Serunkuma helped police track Kulaba down.

Evidence on Magombe
Evidence concerning Magombe was given by PW17 who stated that in December 2012, he received some money in an envelope from Magombe’s brother. He said he did not count the money but it was meant to pay for windows which were ordered by Magombe’s sister. He handed over the money when he was arrested and told to surrender it to police.

He added that he was made to sign a statement which police had not read back to him. PW20 testified that when he carried out investigations he discovered the registered agent for the company purportedly registered by Magombe to be someone else, one Paul Wasike. On his part PW29 stated that he recorded a charge and caution statement from Magombe.

In the statement Magombe admitted involvement and mentioned Serunkuma, Segujja, Matovu and Kauma as others he acted with in the fraud.

PW32 in his report stated that Magombe was a beneficiary of the money lost in the fraud. The evidence of PW34 is that he and PW39 were led by Magombe to the workshop of PW17 at Kiwatule and that afterwards PW17 picked money from a metal box and handed it to PW40 from police. A search certificate was made to this effect and the amount received was Shs4,000,000.

Segujja pinned
PW1 testified that Ssegujja had earlier served as area sales representative for MTN and that he ceased to be so employed after his arrest by police. PW11 stated that Segujja had picked PW11’s laptop at Ntinda from the car of Kauma on 7th September 2012. The laptop had been in the car together with an MTN mobile money Agent kit for Wesley Investments Ltd.

Segujja did not pick the kit according to the evidence. In his evidence PW20 stated that he interviewed PW26 who said he got tokens from Segujja on the January 25, 2013.

Of the Shs4,500,000 he received, he was to retain Shs500,000 and hand over the rest to one Sebagala for onward transition to Segujja. PW25 stated that he recorded a charge and caution statement from Segujja on February 6, 2013.

In the statement Segujja admitted he was involved in the fraud together with Serunkuma. The evidence of PW26 was that he used to work with Segujja in the field in Kotido and that on January 25, 2013 he received Shs4,500,000.

He said Segujja called him on phone number 0782702227. He said of the money he received he kept Shs500,000. He said he sent the Shs4,000,000 through Sebagala to Segujja.

It was his evidence that his communication with Segujja was in English, a language he said he understood but could not speak. The forensic report PW32 made mentions Segujja as a beneficiary of the fraud and that he used various mobile phone agents. PW32 said he got this information from PW20.

He stated that in the call data record, the number 0782357507 was in handset 356995041977140 and that Segujja had with him line 0772201317 belonging to Ari Telecom and Phone Accessories Ltd. PW32 did not retrieve the line belonging to Ari Telecom and Phone Accessories from Segujja.

He had no evidence to show correspondence between Matovu and Segujja or one Stephen Opiyo. It was the evidence of PW34 that Segujja led them to the home of Matovu in Kikumbi. On February 4, 2013 Segujja led PW34, PW39 ,PW40, and PW33 to his house where Shs4,000,000 was recovered under a television stand.

PW19 testified that on January 26, 2013 Matovu gave her Shs29,600,000 to convert into Pound Sterling. She went to the forex exchange at Lugogo where she exchanged the Uganda currency for £6900. She handed that money and receipts at her home to PW33.
PW28 recorded a charge and caution statement from Matovu. In the statement Matovu implicated himself and Kauma. In the forensic report PW32 cites Matovu as one of the beneficiaries in the fraud. PW34 stated that details of Matovu’s whereabouts were given to police by Segujja.

Matovu admits
On January 31, 2013 Matovu admitted he had stolen money which he had kept with his girlfriend Ainembabazi Shavin (Shs30m) and Shs20m with another girlfriend Tamasha Namirembe.

Shavin had exchanged the money into pounds sterling and had cash £6900. Shavin led police to Kifampa, Salama Road, where that money was recovered.

When the other girlfriend, Tamasha, was interviewed she admitted Matovu had given her Shs20m which she kept at her mother’s house at Namugongo. It was found in a pillow up in the ceiling. In all Shs19m was recovered on the occasion.

Kauma tracked hacking computers
Regarding Kauma it was the evidence of PW3 that he reversed the CCTV Camera recordings at MTN Towers and that he saw in the footage a woman who was with Oketcho in the Recreation Centre.

The time shown on the recordings was 10.30am on January 25, 2013. It was stated by PW7 that Kauma was an employee of NFT Consult and that she had been recruited in February 2011 as a Records Assistant at MTN but that owing to gross misconduct her employment at MTN was terminated in November 2012.

Evidence was given by PW9 that he received a call from Kauma on December 15, 2012 and that following the call she got a Shs300,000 loan from PW9 which she paid back on January 5, 2013.

It was the evidence of PW9 that Kauma confided in him and disclosed her plan to hack the MTN system.
Evidence given by PW11 was that on September 7, 2012 he left his laptop and a mobile money kit for Wesley Investments Limited in Kauma’s car after he picked them from his house.

Later, Kauma handed over cash Shs8.6 million to him to keep. He kept it until the next day when his sister Jennipher Ichuma requested him, on phone, to take the money to Plot 77 Yusuf Lule Road, opposite Garden City. He said he handed over to police Shs8.1 million.

Following a search of Kauma’s room she was arrested and taken away. PW11 was asked to pay Shs2 million to secure bond for Kauma.

It was the evidence of PW20 that he reviewed the CCTV footage and saw Kauma on camera. In the footage Kauma entered the MTN Recreation Room from the left. He said he saw Kauma and Oketcho move first to the fourth computer.

It was his evidence the time Kauma operated the computers was the same time money was moved in the seven transactions.

He testified that Kauma admitted to having participated in the fraud but said she was forced to do so. PW20 added that Kauma rang her brother afterwards asking him to take the money received to Plot 77 Yusuf Lule Road.

The brother produced Shs8.1 million. It was his evidence when they watched the CCTV footage, police was not present. The evidence of PW32 was that he identified Kauma on video footage as she moved to different computers.

PW32 stated that he recovered Shs8,120,000 from Kauma’s brother and that Shs300,000 was taken to him by PW12 on January 26, 2013, saying he had received it from Kauma. In the charge and caution statement Kauma made she implicated herself as well as Serunkuma, Magombe, Segujja and Matovu.

Oketcho worked with Kauma
Prosecution evidence against Jerome Jackchar Oketcho (A6) given by PW3 was that he reversed the CCTV camera at the MTN Tower and that on camera he saw Oketcho with a lady and that the two moved to different computers.
The evidence of PW27 is that he recorded a charge and caution statement from Oketcho on 4th February 2013. The statement bears names different from those of Oketcho. A Jackson appears in the statement.
The statement makes no admission to involvement. PW32 testified that he wrote the forensic report and that he recognised Oketcho in the footage. He stated that Oketcho authorised access to the Recreation Centre to the person who posted the transactions in issue.

Kulaba involved in past frauds
Prosecution evidence against Joshua Kulaba was given by PW20 who stated that Kulaba was a mobile money agent and owned an agency known as Extra Link.

There was no proof of that, however. PW32 said Kulaba was a beneficiary of the fraud. In his report PW32 stated that Kulaba was a trade development representative employed by an agency but assigned to MTN.

The report alleges Kulaba was involved in past frauds and that he received money from Serunkuma through mobile money agent line 0772201317 in the name of Ari Telecom and Phone Accessories Limited.

PW34 testified that he was in the company of other detectives when he went to arrest Kulaba on February 4, 2013 and that Serunkuma, who was with them , assisted them locate Kulaba who was alleged to have received Shs50,000,000.

All Kulaba had on him when arrested was a black Itel phone. Numbers in the phone corresponded with those Serunkuma’s phone. Kulaba disclosed he had thrown other lines in River Nile. He said also that he had withdrawn Shs4 million which he had used up and that the system was blocked before he could withdraw more. PW34 was definite Serunkuma was the person who helped trace Kulaba.

Ayebare, the errand boy

Prosecution evidence regarding Ayebare by PW3 is that he saw a video footage of a cleaner in the corridor on the 9th floor MTN Towers.

Ayebare was not involved in any transaction. Evidence was given by PW4 who said that in January 2013, he introduced Ayebare to Serunkuma to carry out some errands at MTN Finance Department.

He said Ayebare was to insert a flash in the computer for information and return it to Serunkuma. Payment for that service was agreed at Shs600,000. Ayebare worked together with Harriet Namazzi.

He said it was not possible for a cleaner for one floor to access another floor except where one stood in for another. He said it is normal for a worker to report for work at 5.20am.

It was his evidence the floor is accessed by lift while the offices are entered using access cards. The evidence of PW20 was that at the time in issue, the doors at MTN Towers were faulty and that it was possible then to access an office by just pushing the door. PW25 testified that he recorded a charge and caution statement from Ayebare on February 2, 2013. In the statement, Ayebare implicates himself and Serunkuma.

It was the evidence of PW32 that Ayebare used the fire exit door to access the 9th floor.

Case against Nasejje

Prosecution evidence given against Nasejje by PW7 shows that she was recruited by NFT as Trade Development Representative and she had worked for MTN and Ezee-money respectively.

This ended when she was arrested. PW10 testified that on January 4, 2013 Nasejje went to MTN Ntinda offices and picked lines for Ari Telecom and Phone Accessories Ltd. She first produced receipts from the bank indicating due payment and her identity. The receipts were respectively for Shs1 million and Shs82,000 .

The print out data showed that the staff number 0772712179 of Nasejje which was allocated to her communicated with Nakyole Ruth’s number 0784281828.
The evidence of PW32 was that Nasejje was a signatory to Ari Telecom and Phone Accessories Limited. In his testimony PW34 said Nasejje had signed for three lines which were all used in the fraud.

Segujja acquitted
In Count 1 there is the charge of embezzlement. As noted earlier, the charge is against Segujja. To prove the charge the prosecution has to prove the accused was employed by the complainant, MTN.
The prosecution should prove also that the accused stole the property of his employer, MTN. There must be proof that the property was received by the accused on behalf of the complainant and that such receipt was owing to accused’s employment with the complainant.

It is alleged by the prosecution that Segujja on January 25, 2013 embezzled Shs3,150,000,000 belonging to MTN. It was never contested that Segujja worked for MTN at the time material to this case.

That is all there was regarding alleged receipt of money. There is no indication where the money came from, whose money it was or when it was he received it. The charge of embezzlement has not been proved by evidence on record.

The gentlemen assessors in their joint opinion advised me to find the prosecution has not proved the charge in count 1 against Segujja. I agree and acquit Segujja on Count 1.

The accused

Nine accused persons are indicted in this case
Edrisa Sserunkuuma: Count 2, 3, 5 & 6
Joseph Joshua Magombe: Counts 2, 3, 5 & 6.
Daniel Segujja: Counts 1, 3, 5, & 6
Henry Edgar Matovu: Counts 2,3,5 and 6
Irene Kauma: Counts 2, 3, 4 and 6
Jerome Jackchar Oketcho: Counts 2, 3, 4 & 6
Peter Ayebare: Counts 2,3,4,5 & 6
Joshua Kulaba: Counts 2, 3, & 6
Mary Nasejje: Counts 2 & 3