Finance to freeze public officials’ laundered assets 

“We shall investigate slowly, and if caught, they will bear the consequences. Either being arrested, or their properties being auctioned, or accounts being frozen if the money was not theirs,” Mr Kasaija said yesterday. 

The report titled: ‘Money Laundering and Terrorism Financing National Risk Assessment (NRA) for Uganda’ is the second risk assessment report covering the period from April 2017 to June 2021. 

The assessment of money laundering threats was based on a review of all crimes based on their scale and nature both domestically and internationally with the estimated proceeds generated, and the capacity of the criminal actors to launder proceeds and the sectors used to launder proceeds.  

The FIA report singled out banking, and real estate as high-risk sectors that proliferate money laundering activities within, and outside the country.

A major money laundering case highlighted in the report shows the Inspectorate of Government arrested a principal engineer in the Ministry of Works and Transport for suspected illicit enrichment and money laundering.

The said engineer was in possession of eleven real estate properties valued at Shs6.2b (1.8m) and suspected to have concealed the ownership of the properties by transferring them to a company incorporated in Uganda knowing that those properties were proceeds of crime.

Real estate

The money laundering threat from the real estate business is rated high with several players including real estate agents, real estate developers, builders, financial institutions, property managers, and corporate in-house real estate officers among others.

Financial Intelligence director for analysis and monitoring Samuel Were Wandera attributed the laundering activities to vulnerabilities in resource constraints, and a largely informal sector whose cash-based transactions are not monitored.

The report shows the money laundering threat for cyber crime is orchestrated through email and website scams in which it swindled people huge amounts of money to buy non-existent products or in exchange for the promise of some future returns.

Between 2017 and 2020, a total of 860 cyber-fraud cases were detected and investigated resulting in a loss of over Shs197b, in which only Shs59m was recovered, with 80 cases prosecuted, 28 convictions and other cases still under investigation.

A major case highlighted involved the alleged unauthorised access, electronic fraud and theft of approximately Shs11b from Pegasus Technologies, a mobile money aggregator, Stanbic Bank, Bank of Africa, MTN Uganda and Airtel Uganda.

 “Given the size of the banking sector, the level of suspicious transaction reports indicates that most criminals use the banking services and products to move the proceeds of crime,” the report reads in part. 

Rating

The overall level of money laundering threat for Uganda has been rated medium high representing a reduction from the high rating in the NRA conducted in 2017.

FIA executive director Mr Sydney Asubo, while quoting the report findings, said the reduction is on account of significant steps Uganda has taken such as amendment and enactment of new laws that meet international standards.

The national money laundering threat is the combination of domestic threat which is rated high, and external money laundering threat which is rated medium-high, and the sectorial threat assessment which considers money laundering threat in the various sectors of the economy.

Some of the cases

   In April 2021, a certain bank in Uganda (not named to avoid jeopardising investigations) allegedly lost Shs3.5b (about $ 972,000) in forexexchange fraud.  Police detectives were told that some employees in the bank had been selling forex currencies to individuals at a rate lower than that sanctioned by the bank, and pocketing the differences, leading to financial losses in excess of Shs3.5b. 

      Obtaining money by false pretence by Dunamiscoin Resources Limited. The company with three directors had its headquarters in the New Taxi Park, Kampala with branches in other parts of the country. It is alleged to have defrauded over 2,500 people of about Shs13 billion.

    FIA supported the investigations by providing additional intelligence which led to the freezing and recovery of Shs709m.