Insider Abuse In Nigerian Banks

Olayinka Sanni in court for alleged N1.5billion fraud

Abdullahi(R) Nicked N60 Million from a customers account

The country’s banking industry is crawling with criminally-minded people who, through a variety of tricks, continue to milk depositors. Now the law is after them
In the last quarter of last year, the Special Fraud Unit, SFU, headquartered in Lagos, declared over 50 bankers wanted for bank fraud. This year, the agency already has a lot on its plate, with over 600 cases of bank fraud perpetrated by bankers and accomplices from outside being investigated.
The Economic and Financial Crimes Commission, EFCC, is also investigating a similarly large number of banking stunts executed from the inside. The strains of the crime include manipulation of customers’ accounts, deliberate clearance of forged cheques and payment of money transfers to fictitious persons.
In many of the cases, the insiders are usually assisted by outsiders. The major targets of insider fraud, this magazine gathered, are accounts of wealthy customers as well as dormant accounts. The insiders, who sometimes are bank relationship officers, make illegal transfers from the customers’ accounts to the accounts of accomplices outside. To give the impression that such transfers are authorised by account owners, customers’ Transfer Instruction Letters as well as mandate signatures are forged.

•Olayinka Sani: Docked for an alleged N1.5billion fraud
Marilyn-Joan Obiora, a senior staff of Diamond Bank, is being prosecuted by the EFCC at the Federal High Court in Umuahia, Abia State. Obiora’s stunts were exposed in a petition by Stephen Inegbu, the bank’s zonal security supervisor in Port Harcourt. His petition was inspired by the bank’s inspection unit, which discovered that Obiora, abetted by four other staff of the bank, made fraudulent withdrawals totalling N125.6 million. In three installments, Obiora and colleagues withdrew N26 million, N91.6 million and N8 million.
Like Obiora, the duo of Ebele Okoh and Charles Amadi, also of Diamond Bank, are facing similar allegations before the Karu Chief Magistrate’s Court, Abuja. Okoh and Amadi of the bank’s Zone 4 branch in Abuja have been accused of withdrawing N250,000 from a customer’s account. Police prosecutor, Garba Mohammed, explained that Okoh and Amadi scanned the signatures of some customers, with the intention to use them for withdrawals. The suspects did not go far in their scheme before they ran out of luck. By then, they had withdrawn N250,000 from the account of one L. A. Mittee through one Amaechi Josiah, who is also being tried for alleged theft in the same court.
In February 2009, Mr. and Mrs. Tochukwu Obazu found themselves before a Federal High Court sitting in Ikoyi, Lagos, for an alleged N97 million fraud. Mrs. Abazu, while a staff of the Ikoyi branch of Fidelity Bank, was brought to answer charges of conspiracy with her husband to forge a customer’s account statement, which had the number 027402010024417.
Mrs. Abazu, who was an Executive Assistant with the bank’s e-Business Unit, Domestic Operations, allegedly made false entries to the account. The entries amounted to about N97 million. Mrs. Abazu and her husband admitted before the court that they made the entries knowing them to be false and acted upon them as genuine through several Fidelity Bank cheques.
Early this year, Olisaemeka Onyeka, a business manager with an Enugu branch of the United Bank for Africa, appeared before the Federal High Court, Awka, Anambra State, on a 17-count charge of criminal conspiracy, fraud and forgery. Onyeka allegedly convinced himself that the best place to obtain a loan was from a customer’s account. Supported by an account officer, Dike Chukwunenye, he forged documents and “obtained” a loan of N16 million from the account. Their luck, however, evaporated when the customer noticed that his account had been fiddled with and reported the matter to the EFCC.

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Another business manager, of the University of Ilorin branch of the bank, Sirajudeen Abdullahi, along with two of his colleagues, is being tried at the Kwara State High Court for nicking N60 million from the University of Ilorin Personnel Cost Account. The EFCC, which is prosecuting him and his friends, alleged that the suspects pretended that the university instructed the bank via a letter dated 14 September, 2011 and with a false reference letter to transfer the money from the account to another owned by Bamestic Ventures. While the suspects denied any wrongdoing, there was no evidence to support their claim as the account owners never gave authorisation for the transfer.
Also early this year, the EFCC arraigned the trio of Oyebode Atoyebi, Olayinka Sanni, a former manager with the defunct Intercontinental Bank (now part of Access Bank); and a company, Sidaw Ventures, before a Lagos State High Court on an eight-count charge of conspiracy, stealing and forgery. Sanni, Atoyebi and Sidaw Ventures were accused of stealing about N1.5 billion. Sanni, a chartered accountant and owner of Sidaw Ventures, a bureau de change, was alleged to have illegally moved various sums of money from more than seven customers of the defunct Intercontinental Bank into the account of Sidaw Ventures owned and operated by him, without the customers’ consent. Atoyebi was arrested for allowing the use of his passport-sized photograph and name to open an account in Sidaw Ventures Limited in the name of Akanmu Babatunde. With this fictitious name, Sanni launched a series of shady deals that left many victims sucked of their cash.

•Atuche: Forged resolutions of two companies to siphon over N10.9 billion
And in one audacious move, Hillary Amakor, an intern with Finbank plc, now swallowed up by First City Monument Bank, in harness with Osondu Chimaokwu, a full-time employee of the bank, masterminded a N600 million heist through a fictitious company, Osdech Nigeria Limited. The two men were recently arraigned before a Lagos High Court on a six-count charge bordering on falsification of account.
Just last week, two Access Bank staff, Olusegun Afolabi, 25, and Rebecca Enahoro, 24, appeared before a Magistrates’ Court in Lagos for an alleged N3.3 million fraud. “The duo conspired to fraudulently re-activate a dormant account No. 0021035478 belonging to Mohammed Lokogoma,” the prosecutor said. After the reactivation, the accused used the account to transfer N2. 3 million to another bank and another N1 million to a different account in Ecobank. If convicted, the suspects face up to 15 years imprisonment.
Aside from the cases being tried by the anti-fraud agencies, some aggrieved customers are also in court with staff of banks for allegedly fiddling with their accounts. Odafe Atogun, a Skye Bank customer, is one of them. In 2008, Atogun, an editorial consultant, struck a deal with an Ireland-based company, Hudson Killeen, for the establishment of a printing press in Nigeria. To start up, a sales representative of Hudson Killeen, Kelvin Fuller, sent the sum of €6,000 to Atogun through Western Union Money Transfer. In his payment instruction to Western Union, Fuller specified that the money be paid to Atogun through any of its affiliate banks in Abuja. When the money was sent, Atogun decided to wait till the next day to pick it up since it was already past banking hours.
The next day, he went to Skye Bank on Ademola Adetokunbo Crescent, Wuse II, Abuja, to collect the money, only to be told that the money transfer control number may not exist or may have been used. After about two months of continuous enquiry, the Western Union Money Transfer office in Ireland discovered that the said money was paid out at 6.22pm Nigerian time on 3 November 2008, by a Skye Bank branch office at 1, Forestry Road, Benin City–to someone else. Desirous of knowing how the money could have been paid during non-banking hours, Atogun approached the bank for explanation. He got none. That aroused a suspicion that the payment could only have been made possible by an insider.

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He filed a N100 million suit against the bank. Five years after, Atogun’s quest to hold Skye Bank liable for the fraudulent withdrawal of the money sent to him is still before a Lagos High Court. Three weeks ago, the court rejected the bank’s application to stop the trial on the grounds that the court lacks jurisdiction to hear the matter.
In another incident involving the bank, over N52 million was allegedly fraudulently deducted from an account belonging to the Lagos State Ministry of Establishments and Training at the bank’s branch in Alausa, Lagos.
Two cloned cheques were allegedly used in withdrawing the money from the ministry’s account in two instalments without confirmation from the account signatories. Police investigation into the matter revealed that the ministry, indeed, issued two cheques with the same numbers as the cloned ones, but to other individuals and amounts way below the ones cashed with the cloned cheques. While the original cheques bore the sums of N400,000 and N4,249,429.40 respectively, the cloned cheques bore N23,830,192 and N26,750,400. Unlike in the case of Atogun, the management of the bank, perhaps because of the entity affected, experienced a bout of contrition and made a refund of the money to the ministry.
Even the top echelon of the industry appears not to have immunity against the temptation to engage in fraud.
The trial of Francis Atuche, former managing director of the defunct BankPHB, alongside two others, shows the vulnerability of the industry’s top cats to the seduction of money. Atuche, who is standing trial along with his wife, Elizabeth, is alleged to have forged board resolutions of Future View Securities Limited and Trajek Nigeria Limited. The resolutions by the two companies, which were mere proxies, were used to siphon over N10.9 billion from the bank. Witnesses in the case have offered startling revelations of the couple’s predilection for fraudulent transfers and conversion. Mr. Erastus Akingbola, former managing director of the defunct Intercontinental Bank, is in the same boat with Atuche. Still hanging on the former Intercontinental Bank boss’ neck are hefty charges relating to a N47.1 billion fraud.
Aside from the cases in court, this magazine learnt that many others involving bank staff are never reported to security agencies because of their potential for reputational damage. An industry source told this medium that many fraud cases in which bank staff assist Internet hackers to access customers’ accounts are often not reported to security agencies. The source explained that banks prefer handling such internally to stave off public suspicion that their internal security measures are defective. “No bank wants to give the public the impression that it is unsafe to bank with it. So, when cases of internally assisted Internet fraud are detected, they just handle the matter internally,” said the source, who added that the EFCC is currently not handling cases on Internet hacking, a claim confirmed by a senior EFCC official.