Detectives attached to CID are probing the case involving officials from the public service ministry and two microfinance institutions; Letshego and AAR Credit Services Limited alias FIN Credit Uganda Limited.
FRAUD | CRIME | JUSTICE
The Police’s Criminal Investigation Directorate (CID) has busted a racket allegedly involving some officials from the public service ministry and two microfinance institutions over defrauding more than 5,000 teachers and police officers in a loan scam.
The Police are investigating at least eight officials from the ministry and the financial institutions. One of the ministry officials was arrested over the scam, but released on bond.
Investigations into the intricate scam reportedly kicked off in November last year, but a breakthrough was only made recently.
It is estimated that over sh20b was involved in the scam that has reportedly been going on for about six years, according to the CID spokesperson, Charles Mansio Twine.
Detectives attached to CID are probing the case involving two microfinance institutions; Letshego and AAR Credit Services Limited alias FIN Credit Uganda Limited.
It is suspected that some managers in the two financial institutions colluded with public service ministry officials in the scam.
Money would allegedly be deposited on the teachers’ bank accounts as a loan advance, without the knowledge of the accounts holders. The teacher would then be compelled to hand over the money on the grounds that it was deposited on their accounts erroneously.
Later, the victim would discover deductions on his/her salary to pay back the “loan” from the financial institution.
Police investigators have so far established that at least 5,100 civil servants, mainly teachers and police officers, were cheated in the scam, but the number of victims is believed to be higher.
Twine said between sh3m and sh4m would be deposited on a teacher’s bank account as loan advance from the financial institution.
“When the money lands on the civil servant’s accounts, the fraudsters would contact the recipients and claim that the transaction was erroneous. They would then ask them to deposit the money on a specific account or hand it over physically,” Twine explained.
He said the victims who would refuse to hand over the money would be threatened with being deleted from the public service payroll.
“Some teachers who refused to refund the money have since been deleted from the payroll without any justification,” Twine said, adding that this was evidence that some public service officials were involved in the scam.
The Police detectives also believe that some employees of a firm, Pay Consult Africa (PCA), that was contracted by the public service ministry to handle loan matters for public servants, were involved in the scam.
How the investigation started
Some teachers and Police officers received money between sh3m and sh4m on their accounts as loan advances from Letshego and AAR Credit Services Limited, also known as Fin Credit Uganda Limited, located on Kimathi Avenue. But the teachers and Police officers had not applied for the loans and the Police has since established that the letters of undertaking for loan applicants were forged.
One of the teachers, Davis Mugoya, who reportedly received money on his account, alerted the Police about the matter after his salary was deducted for recovery of the loan.
Following investigations, the Police arrested a senior administrator at the public service ministry, Hellen Nekesa. She was later released on bond.
Mugoya told the Police that when he received the money on his account, the suspect called him, ordering him to refund the money.
Mugoya alleged that Nekesa physically travelled to Jinja and coerced him to hand over sh4m.
Mugoya alleged that his wife, Miria Kiiza, who is also a teacher, had also undergone a similar experience.
According to the Police, after they surrendered the money, Mugoya and Kiiza were subjected to pay deductions as though they were beneficiaries of a loan from Letshego and AAR. Their efforts to stop the pay deductions were all in vain.
The financial institutions reportedly insisted that Mugoya and his wife had received loans, reason they were subjected to pay deductions.
Police said their investigations have established the prime suspect in the scam as a man called Michael Nsubuga, who purportedly works with the public service ministry.
The Police detectives have been recording statements from alleged victims as part of the investigations.
Twine said the victims were from Mukono, Luwero, Jinja, Butaleja, Kween, Iganga, Luuka, Bugiri, Mitooma and Kayunga.
The 2019 annual crime report released recently said over sh11.9b was stolen from commercial banks and telecom companies through fraudulent mobile money transactions. Of the sh11.4b stolen, only sh51.8m was recovered.
Two hundred forty-eight cases were reported in 2019, compared to 198 cases reported in 2018, the report revealed.
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