On almost a daily basis, banks suffer fraud or attempted fraud sometimes orchestrated by bank staff.
Fraud in banks remains one of the most guarded secrets of any financial institution. This is the reason why financial institutions continue to suffer the same as they attempt to shield the public from getting to know.
In almost all commercial banks, frauds only happens with the hand of an insider. Fraudsters usually work with collaborators within the bank to help them execute their mission.
However, when fraud hits Bank of Uganda which supervises commercial banks, then the situation needs urgent attention.
In order to raise money, government through Bank of Uganda usually sells treasury bills with a specific maturity period, varying from 91 days to 364 days. Treasury bills are risk-free short term debt instruments regularly issued by government through Bank of Uganda to the public.
When Bank of Uganda announced it was selling treasury bills, Mukasa, a bank account holder was one of the people who decided to invest money in treasury bills to earn extra money.
Unknown to Central Bank officials, Mukasa had other ulterior motives. He deposited Shs285 million to his Uganda Commercial Bank (UCB), Bwaise branch account to buy treasury bills. Mukasa later paid BoU via two cheques amounting to Shs285m.
Two BoU officials made sure they held the cheques which enabled Mukasa withdraw the money. When Bank of Uganda tried to cash Mukasa’s cheques through his UCB Bwaise branch account, there was no money on the account.
Mukasa worked his way to Bwaise, withdrew the money from his account and when UCB tried to debit the account, cheques bounced.
When the cheque bounced, then Bank of Uganda Governor, Charles Nyonyitono Kikonyogo ordered an investigation. Desperate to find the fraudster, the governor staked Shs5m to whoever would give the bank information leading to the arrest and prosecution of the fraudster.
Kikonyogo tasked the anti-fraud unit in Bank of Uganda, a renowned team of police detectives attached to the bank at the time, to bring the culprits to book.
“There was almost nothing to kick-start the investigations with save for the cheques that had bounced. However, the money staked by the governor gave us a good start,” recalls a detective who handled the case.
The detectives found that everything that had been used to open the account in UCB Bwaise branch was fictitious, including names and address, save for the account holder’s passport size photograph.
According to the detectives, they had to work with contacts in downtown Kampala to find Mukasa. Bank fraudsters know each other and it’s easy to know who committed a fraud if you have money.
“I approached a known bank fraudster and I showed him the passport photograph of Mukasa and I requested for his assistance to arrest Mukasa. He offered to show him to me at an agreed fee,” says the detective.
The two agreed to meet later that evening and they headed to Mukasa’s hangout. The informant led the detective to Elliot Bar in Nakulabye on Hoima road where Mukasa was a regular patron.
The detective sat with his informant for a drink that evening, with the man sipping on his beer as the teetotaler detective drunk soda.
“According to the contact, Mukasa usually reached at the bar at 10pm. He passed by every day of the week. I just sat patiently and waited for my target to come. Since I did not know him I had to trust my contact,” says the detective.
“At five minutes past 10pm, Mukasa walked into the bar and my contact tapped me. Mukasa’s features fitted the passport size photograph he used when opening the account,” says the detective.
Fortunately this time round, Mukasa appeared to be in a hurry, he ordered for a couple of beers put them in a polythene bag and headed for the door.
Conscious enough not to lose contact with him, the detective followed him outside. As Mukasa jumped into a special hire taxi, the detective followed him on a motorcycle.
Mukasa drove to Kasubi and branched off towards Kawaala, made a few turns before stopping at a gate.
“In about 10 minutes we caught up with him. He entered the gate, we rode past his gate. I used the cover of darkness to see which house he had entered. I could not confront him alone, so I called for backup,” the detective says.
By the time other police detectives arrived, lights were out, it was all quiet. The detectives opened the gate and entered and headed for the balcony. Two of the detectives remained in front of the house and two others went to the back.
“I had heard the lady wake up the man telling her Obusajja buze (the men are hear) get your clothes and run. The lady threw her husband’s (suspect) trousers over the perimeter wall and they landed right in front of the detective. Since it was dark I stood next to the pawpaw tree,” he says.
“I collected the clothes and put them away and I waited for him (Mukasa), as he stealthily tried to climb down the wall making sure he was not heard. I grabbed his foot and I twisted it, forcing him to let out a loud cry. The twist was enough to disable him and he accepted to go with us,” he says.
The detective got Mukasa, who was only in his underwear, to dress up and ordered him to walk to the car. Mukasa was taken to Kampala Central Police Station and locked up for the night.
On the way to the police station, Mukasa told the detective how he had worked with two Bank of Uganda officials to defraud the bank. The next day, Mukasa was taken to Bank of Uganda for questioning.
“He told us how he had worked with two BoU officials, one was Abbey Wasige and the other was Sunny Mukurungu, to withhold the two cheques. That gave him an opportunity to withdraw all the money, leaving the Central Bank in losses,” the detective said.
Mukasa told the detectives how he had paid Shs16m to Mr Wasige and Shs20m to Mr Mukurungu for the first cheque. He later paid Shs20m to Mr Wasige and Shs30m to Mukurungu.
According to Mukasa, he had paid the officers by cheque, not cash, so the detectives made arrangements to extract the waste cheques from Barclays Bank.
Mukasa even gave the detectives the folio against which he had issued the cheques.
“I wrote to the management of Barclays Bank to furnish me with the four waste cheques and the bank statement of the two accounts, one held by Wasige and the other by Mukurungu,” the detective said.
Barclays Bank gave the detectives certified bank statements of Wasige and Mukurungu’s accounts.
It was clear that the payments had been deposited on the accounts of the two BoU officers.
However, when the detectives tried to point out to the management of Bank of Uganda the involvement of their staff, they tried to deny it.
“The two officers were so trusted by the governor that he denied their involvement. We made sure we only told him by mere word of mouth and when he did not agree we brought him documentary proof,” recalls the detectives.
It is only when the BoU governor saw the cheques that had been issued by Mukasa to Wasige and Mukurugu that he accepted they were involved.
All the four cheques drawn by Mukasa were from his account in UCB Bwaise Branch. The detectives also requested UCB for certified copies of Mukasa’s bank statement.
Using the waste cheques and bank statements, the detectives were able to come to a conclusion that there was collusion between the Central Bank officials and Mukasa to defraud the bank.
The detective said when they interrogated the two officers, they denied knowledge of the scam until when they were shown the cheques drawn in their favour by Mukasa that they accepted their involvement in the scam.
The two BoU officers lost their jobs and together with Mukasa they were arraigned in Buganda Road Court on charges of fraud.
The two bank officials were slapped with two extra charges of causing financial loss and abuse of office. Mukasa and the two bank officials were each sentenced to five years in jail.