{UAH} Lawyer Sought Shs1bn from Cairo Bank to Bribe Police

19 hours ago 2095 Viewed Giles Muhame 1 Comment

Muhammad Tarik(2nd-L wearing shades), his lawyer Tom Samuel Magezi (3rd-L) and his colleague at Kibuli. ( PHOTO/Eddie Ssejjoba/New Vision)

A covert security unit is investigating claims that a lawyer with Kabega & Tumusiime Advocates asked for $300,000 from their client Cairo International Bank (CIB) to pay police officers who were part of the investigation into the plunder of Shs169bn pension funds, including CIID Director, Grace Akullo.

According to leaked emails which security sources say have provided a crucial lead in the investigation of alleged bribery of CIID officers, lawyer Tom Magezi reportedly wrote to CIB boss Nabil Ghanem on April 3, 2014 expressing shock that the new Director of Public Prosecution Mike Chibita was giving them headache.

In the email titled, "Unusual non-cooperation encountered from the New DPP, the bank is upheld on charge sheet," Magezi allegedly boasts that despite the challenges with Chibita, the "Director Criminal Investigations is still with us and has expressed surprise (of resistance from Chibita)."

Magezi purportedly added: "Our contact has called for any documents that can exonerate the bank," adding, "She (Akullo) is to explore ways to include them."

The lawyer, according to the email, further told Nabil that; "The lawyers are of the opinion that USD300K (Shs1bn) should cover our team of 7 officials at the Police district in addition to another 7 officials at the prosecution plus the CIID boss."

The emails, which security said are taking as a "very serious matter" and could lead to the prosecution of lawyers in this case, are described by Magezi as "confidential."

Magezi is said to have pressed Nabil: "I seek your immediate approval through the board most urgently before the retreat starts for end of month."

Magezi also unveiled details about a meeting with the company lawyer only identified in the email as Tumusiime.

"Mr Tumusiime says meeting attended by senior contact was very good and confirmed nothing shall happen. Therefore the position is no senior management official will be prosecuted," he assured Nabil, who appeared desperate to 'kill' case.

Magezi reportedly sent the emails using his Yahoo Mail on his Smartphone using the android operating system.

Nabil, according to another leaked letter, would later write to CIB board, about the lawyers' "bill for USD300, 000 related to the pensioners scam."

He added: "I will pay it on monthly basis as agreed upon by means of two contracts once approved by the board. Your decision is required."

Nabil further said the "first contract is for USD118,000 approximately to cover the very early stages of the investigation and sudden hold up in September for 6 of our staff that includes Mohammed Tarek, General Operations Manager."

"The second contract is for the remaining balance for USD 182,000 that also covers part of the previous investigations followed by the prosecution stage and the coming trial."

In what appears as an admission of guilt, Nabil added: "It was clear during the daily questioning that for the first few days that the accusations were directed to two of our management who committed this conspiracy."

He described Kabega & Tumusiime Advocates as "very reputable, honest and has represented the bank for long time ago."

The new revelations are likely to pile more pressure on CIB, Akullo and lawyers handling the case to provide clearer explanations regarding fresh allegations of bribery.

The Shs169bn can tarmac 169 kilometers of a dusty road at Shs1bn per kilometer.

Akullo has since denied receiving a bribe, saying she only heard from former Principal Accountant in the Public Service Christopher Obey and other suspects in the pension scam that they had sent her Shs1bn to 'kill' the case.

MP Abdu Katuntu this week expressed shock that Akullo did not immediately take action after the suspects she was investigating for plundering public resources openly told her they had passed on a bribe through a journalist to her.

ChimpReports was unable to reach Cairo International Bank officials for comment. The office line for Tumusiime & Kabega Advocates also went unanswered on Friday afternoon.

However, it should be remembered that during the hearing of the case, CIB's lawyer MacDusman W. Kabega publicly argued that Akullo had promised to give the bank lawyers a fresh report which "would be used in court not the old one."

Lawyers prayed to court to ignore detective Komurubuga's first investigative report since a new one would be issued by a senior officer.

But prosecution went ahead with the probe in which CIID continued sharing their findings with the DPP.

CIID boss Grace Akullo and Police publicist, Fred Enanga (R) at a recent press conference in Kampala

Ghost pensioner suspects were then eventually charged in court.

Evidence showed that Cairo Bank was heavily involved in fraud before being added to the charge sheet which was amended by the DPP.

Sue Lange, a magistrate at the Anti-corruption court issued criminal summons to the bank officials.

Kabega represented the bank but refused to take plea until he widely consulted.

Within in two weeks, Kabega maneuvered and went to the High Court presided over by Justice Kabiito before suing the Attorney General in his representative capacity, arguing the DPP had maliciously and irregularly charged Cairo International Bank officials.

He secured a court order and went to the magistrate's anti-corruption court where he requested the stay of prosecution of the case until proceedings in the High Court were disposed off. That was around July 2014.

New Report

Then Attorney General, Peter Nyombi was then forced to file a defence. He sought audience with the DPP.

Nyombi opposed Kabega's submission, saying the lawyers of the bank had no moral authority since they don't represent CIID and no write up had been made to confirm this.

Cairo bank lawyers then convinced Justice Kabiito that a fresh report was to be issued and prayed for some ample time for the report to come. They were spot on.

It is this delay from July to October 2014 that was then used to produce a new report by CIID.

On October 31, the 'new report' was signed by Akullo and on the same day, Tom Magezi, a lawyer from Kabega's law firm which represents the bank, swore an affidavit claiming that he had "come across" a report by the Director CIID which he said "heavily impacted" on his application suing government.

"I deemed it vital and necessary as my duty to bring it to the court's attention and hereby do so," reads Magezi's affidavit in part.

When this second report was tendered in court, Akullo did not withdraw it. The report had her known signatures not only on the cover letter but every page.

She would later defend the report through police spokesperson, Fred Enanga in an interview with ChimpReports, as "detailed" and "authentic."

The Judge subsequently ruled in favour of the bank, quashing the DPP's decision to prefer charges of theft and conspiracy to defraud the government shs165bn.

Kabiito also directed that the DPP should "stop preferring the intended charges and prosecuting CIB until matters raised in the application and the court's determination therefore been attended to and a return made to the court."

The case collapsed eventually, sparking off public outcry.

Interestingly, Akullo has since denied authoring the second report, arguing it was a handiwork of rogue detectives.

Questions

The question many would want answered is; why would CIB attempt to bribe police officers? Is the bank innocent in this dirty pension scam?

In October 2012, Bank of Uganda discovered a number of "irregularities" in Cairo International Bank's (CIB) "Know-Your-Customer procedures and operations of the various pension accounts coupled with weaknesses in suspicious transaction monitoring."

According to a confidential report authored by the Central Bank's Director of Supervision, Justine Bagyenda and copied to Deputy Governor, Louis Kasekende, the examiners reviewed a sample of beneficiaries' accounts from a list of 1,012 pensioners which the bank had obtained from Police.

The examination revealed that the introduction letters to open accounts for all the pensioners said to be members of Eat African Community Beneficiaries Association (EACBA) were "singly signed" by Mr Peter Ssajjabi, the National Secretary for EACBA.

The review showed that "Ssajabi's personal account (number 002433) as well as that of his private company, SWIFT Commercial Ltd (account number 001910) opened in May 2001 and August 2000 respectively did not have reference/introduction letters."

The sampled account opening documents indicated that the beneficiaries who had been working with various government ministries and departments reside in locations which are spread out to nearly all the districts of Uganda.

The account opening statements of the said pensioners were filled and signed by customers in the field (outside the bank premises) and therefore customer thumb prints were not captured in the bank's core banking system which is a key requirement for CIB.

BoU was astonished to learn that "CIB opened the various accounts for EACBA members and credited gratuity to their accounts before receipt of the account opening introductory letters."

The investigation further revealed weaknesses in suspicious transactions monitoring.

For instance, the beneficiaries said to be located in various parts of the country most of whom are elderly people, signed vouchers consistently and withdrew the funds from their accounts in a lumpsum either on the same day or a few days from the date the gratuity was credited to the accounts which necessitated further due diligence.

For example a sample of twenty pensioners on September 14, 2011, withdrew money in lumpsum between Shs45m and Shs90m together totaling to Shs1.34bn physically from CIB premises.

Bank of Uganda's investigative report on the CIB pension scandal

The bank's guidelines on the operations of the pension accounts were not observed. While each beneficiary was required to withdraw only 20 percent of the cheque amount and the rest of the funds were to be deposited on the Former East African community beneficiaries' account, the CIB paid out the funds to individual customers in a lump sum.

As if this was not scary enough, the vouchers used to withdraw the funds had the same handwriting despite the fact that each customer's signature on the payment voucher was as per account opening documents specimen.

The Central Bank noted that there was a likelihood of collusion with the bank's officers. All payments were authorized by the same supervisor Mr Ishaq Ssentongo, the Assistant Manager Operations and all payment transactions were posted by the same teller; Ms Rahmah Nakigozi (Assistant Manager cash) and yet the bank had 9 tellers.

The review of personal files for Mr Ishaq Sentongo and Ms Nakigozi indicated that the officers had previously exhibited unethical behavior as evidenced by warning letters on their personal files.

For instance Ssentongo altered a Barclays Bank cheque and concealed the information in October 2011 and also concealed information on court order that had been issued to him on September 6, 2012.

On the hand Nakigozi did not declare an overage in September 2002 and also made a cheque payment (Shs3.5m) over the counter and deleted the transaction from the system without authorization in February 2003.

The bank, however, maintained the officers in their respective positions.

Bagyenda said in her report that, "Mr Mohamed Tarek in his capacity as General as General Manager Operations did not exercise due diligence as he authorized the opening of the said beneficiaries' accounts before the bank could receive introduction letters."

She added: "Weaknesses in internal controls were noted at Tarek Abel Kader (General Manager Information and communications technology) who supervises the Information Technology systems also performed role of the General Manager operations in his absence."

"Consequently, Mr Tarek authorized the opening of some of the said beneficiaries' accounts in the absence of Mr Mohamed Tarek thus compromising segregation of duties."

Bank of Uganda further faulted management for not showing concern over the fact that the said beneficiaries located in different parts of the country most of whom are elderly people and withdrew the funds ranging between Shs45m and Shs90m in a lump sum either on the same day or a few days from the date of receipt the gratuity on their accounts.

Action taken

Bagyenda explained that a letter was written to CIB on October 5, 2012 pointing out weaknesses in the Know-your-customer practices and suspicious transaction monitoring and CIB was directed to keep BoU fully informed on the matter.

The same issues were emphasized in the on-site examination report issued on October 23, 2012. The matter remained under police investigation.

For exclusive leaks/info on this scandal, please contact our editor on 0705340477 or send email on giles@chimpreports.com

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"War is nothing but a  continuation of political intercourse, with a mixture of other means. Man will never be free until the last king is strangled with the entrails of the last priest." 

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