A major fraud scandal has rocked the Bank of Africa, with investigators uncovering a scheme involving former bank employees and clients that led to significant financial losses and the theft of customers’ money.
Senior investigators from both the Police and the State House Anti-Corruption Unit say a group of employees resigned after orchestrating fraudulent activities.
The group was led by the bank’s former Executive Director, Robinson Bernard Magulu, and left the bank with losses worth billions of shillings.
Officials familiar with the matter, who declined to be named, said that some former bank staff stole money through syndicated salary loans, while others colluded with clients to forge signatures of their spouses when using matrimonial properties as loan security.
Investigators further revealed that after the loans were approved and funds disbursed, some partners would take legal action against the bank, leading to protracted court battles and substantial financial losses.
The ongoing probe follows a whistleblower petition to the Governor of the Bank of Uganda, urging authorities to hold the former Bank of Africa staff accountable and recover the lost funds.
The petition, which was also shared with the bank’s management, calls for urgent intervention to track down those responsible.
It is alleged that in 2023, the former employees collaborated with fraudsters at Nasser Road in Kampala to forge garnishee orders, which were then submitted to court, enabling them to siphon money from customers’ accounts.
According to the petition, when the fraud was discovered, affected customers sought assistance from the Bank of Uganda, the regulator of financial institutions, but no immediate action was taken.
The petition further alleges that the suspects have since used the stolen money to establish private businesses, which investigators are now pushing to have seized and auctioned to recover the funds.
The petition also names Bank of Africa’s Managing Director, Arthur Isiko, accusing him of mistreating employees and allegedly forcing several, including Magulu, to resign.
The scandal comes amid a broader crackdown on banking fraud. Mariam Natasha, spokesperson for the State House Anti-Corruption Unit, confirmed that investigators had intensified efforts to combat financial crime.
She cited a recent case in which authorities successfully blocked an attempt to steal UGX 600 million from Steven Karekezi’s account at DFCU Bank, a fraud allegedly facilitated by bank staff using forged court documents.
As investigations continue, authorities are under pressure to ensure that those responsible are brought to justice and that customer confidence in the banking system is restored.
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