Young bank manager who stole Shs780m

What you need to know:

Cyber fraud. In our crime series this week, ANDREW BAGALA looks into how money was moved from Stanbic Bank accounts to different people’s personal accounts with the help of the IT department

KAMPALA.

In 2009, 28-year-old Abdul Kharim Kaluuma was punching above his weight in financial terms and indeed his fists were making an impact among his peers, family and workmates.

By 2010, as some of his former schoolmates were still struggling to look for employment, he was already a proud owner of a piece of land in Lubya village, Rubaga Division in Kampala. His bank account was ‘fat’. At home, he would keep more than Shs20m for miscellaneous spending. He even ventured into small scale businesses.

At work, in Stanbic Bank, he was a star performer, highly respected and trusted. Because of this, even his rise in ranks as general ledger clerk in charge of consolidated funds, was not questioned, despite his age.

His requests were often seen to many as army orders which are not discussed but enforced.
“Hello, I’ve dropped Riley file in unprocessed folder titled Riley 221210 please process. Regards, K Abdul-Kharim, Consolidated payments 0414343151,” he emailed to Stanbic Bank IT department.

Stanbic Bank IT department quickly honoured.
“Hi all, I have dropped SFI file for Boueftcom 040809. Please process. Regards A.K. Khariim consolidated payments. 0414343151 KOPC Yes, we can,” he sent another on a different day.
The obedient IT department did not question on all occasions.

The clerk sent another similar instructions several times. And again the IT department would humbly abide by his instructions and complete the transfers.
For 20 months, from May 2009 to December 2010, it went on.

Anomalies discovered
All of a sudden, the bank coffers’ started to slim as reflected in the auditor’s books. Bank officials started nosing around on what could be causing the losses.

Mr Richard Andruma, Stanbic Bank’s internal investigator, was engaged to understand what could have caused the problem. His investigations pointed at Shs787.5 million less of what the bank would have had. Where had the money gone, became the internal investigators’ business.

After months of scrutiny, the bank investigators scan found the glitch in the bank commission account that was causing pain in the entire institution.

Mr Andruma and his colleagues had to go through a painstaking investigation in which they looked at all the transactions that were supposed to be made to the bank commission account and those that didn’t make it there.
Inquiries brought them to official emails that were sent by different bank clerks and question marks rotated around Kaluuma’s instructions.

The investigators dug deep into Kaluuma’s instructions that led them to believe that he could help find answers to the puzzle.

Kaluuma was summoned to respond to the allegations. He didn’t have much to say.
On January 20, 2011, Mr Andruma opened a criminal case at Central Police Station in Kampala.

Commissions swindled
Stanbic Bank was also ready with an interim report which they handed over to the police. The report was clear. That between the months of May 2009 and December 2010, while working as the in charge of processing salaries of public servants in Stanbic Bank, Kaluuma embezzled the money that had been earned as commission from the salaries.

Armed with the bank report, Detective Inspector Balaam Bwegye arrested and detained Kaluuma on charges of embezzlement.

Kaluuma didn’t waste police’s time. He confessed to having participated in the diversion of money meant for the bank commission account to individual accounts.

How the money was moved
Police discovered that some of the money had been wired to Dennis Namugera’s bank account. Evidence with the police shows that Kaluuma credited Shs6m to a one Umar Ntege’s account. At different times, Kaluuma could credit money ranging in millions to Namugera’s account.

On August 5, 2009, his instruction to credit Shs5.5m on Namugera’s account was implemented.
Mr Bwegye arrested Namugera.

“When we interrogated him, he didn’t deny receiving the funds but said the money was sent to him to buy building materials for his boss Kaluuma and he had spent every coin to the satisfaction of his boss,” the detective inspector wrote.

Namugera was let off the hook. Police then had to look for Ntege, Willy Balongo and Swaibu Lutalo to whose personal accounts Kaluuma had wired money. It appeared to the detectives that many of the personal accounts Kaluuma credited the money to, he was either to pay for services or for purchasing commodities for his businesses.

Kaluuma made a confession to the detectives who later took him to court where he made an extra judicial statement.

Detectives took Kaluuma for a search in his home where they recovered Shs18m and US$550. Detectives also froze his account in Barclays Bank which had more than Shs105m. His home in Lubya was seized and all his businesses were put on the table.

The Director of Public Prosecutions looked at the file and subsequently sanctioned embezzlement charges against Kaluuma.
Kaluuma was presented in court and charged with embezzlement.

Charged in court
In spite of the earlier confession, when Kaluuma was in court, he pleaded not guilty to the charges.

He said he didn’t generate the email because it was signed off by a name which wasn’t his and one he didn’t submit to the IT department.
For instance, in some emails the author of the email would use A.K. Khariim yet the name he had given to IT was Kharim A.

Jimmy Okot, who was Stanbic Bank’s systems administrator and one who registered Khariim in the system, insisted that it was Khariim who had generated the emails. Okot added that Kaluuma’s first name Kharim with a double “i” was the IT department’s creation.

Justice Paul Mugamba agreed with Okot that it was Kaluuma who generated the emails that caused Stanbic Bank to lose millions of shillings.

The suspect also retracted the confession saying that it was extracted made under duress, which is against the law, and demanded that it should be thrown out.

Justice Mugamba subjected the confession to a test and ruled “I have no doubt in my mind that the confession is true and that while the charge and caution statement is corroborated by the evidence adduced, the charge and caution statement also corroborates the evidence adduced,” Justice Mugamba said, adding: “Money was indeed lost to the bank and taken by other not entitled through the aegis of accused”.
These statements clearly showed a direction where the case was going.

The judge finally ended it: “In the result accused (Kaluuma) is convicted on the alternative count of causing financial loss, contrary to section 20(1) of the Anti Corruption Act”.

Kaluuma was sent on remand awaiting sentence. On March 20, 2012, the judge sentenced Kaluuma to seven years in jail. The property he had obtained from the embezzled money was also attached.

The judge’s ruling

The convict is about 33 years old now. He chose a career of a banker which involves being a steward of public finances. It is a career that calls for probity and honesty.

A promising young man that the convict appeared to be instead elected to be the opposite of what his family, friends and the public expected him to be. He was lured by the temporary delight of fleecing off the unweary.

So it was that eventually he got caught on the wrong footing after hundreds of millions had found their way into the wrong hands. This should not be allowed to prosper if commerce and banking are to thrive in this country.

It must be punished by the rigours of our law. I have on the other hand heard about the family concerns of the convict and his anxiety he be treated with leniency because of those dear to him.

While I feel for those persons I also feel for the public so exploited without remorse by the same convict. I take into account the fact that he is a first offender and that he is still a young man who could reform. I sentence him to seven years’ imprisonment.

In addition I order as follows:
1.That the land at Block 203 Lubya village, Rubaga Division, Kampala District together with its developments be confiscated pending the outcome of any court action by Stanbic Bank to recover money lost through the convict’s culpability .

2. That all that money on Barclays Bank account 0115000705 in the names of the convict be frozen pending the outcome of any court action by Stanbic Bank to recover money lost through the convict’s culpability.

3. That his tomato sauce making machinery be confiscated pending the outcome of any court action by Stanbic Bank to recover money lost through the convict’s culpability.

The above orders are to last for six months from today if no action is in existence by then.

4.That the convict is hereby barred from holding public office for 10 years pursuant to Section.46 of the Anti Corruption Act.