Police extends teachers' funds theft probe to dfcu Bank

As the probe into the alleged theft of sh10.8b meant for the teachers' Savings and Credit Cooperative Societies (SACCOS) loan fund intensifies, investigators have extended the probe to dfcu Bank, through which the money was paid out.

Detectives are seeking to establish why dfcu did not raise any red flag when huge sums of money were wired to newly-opened bank accounts.

As a practice, when huge sums of money are credited onto a client's account, the bank is obliged to raise a red flag with the Financial Intelligence Agency (FIA), to which Police is a member.

Preliminary findings indicate that the money was wired to the bank in bits, ranging from sh300m to sh7b in six transactions on different dates last year.

The money from the Microfinance Support Centre (MSC) account was paid to the Uganda Teachers Cooperative Savings and Credit Union Limited (UTCSCUL) account number 01013678309819 in dfcu bank before it was withdrawn in cash.

However, sources said the bank did not inform FIA about the transactions. As a result, the SACCOS proprietors have since been arrested.

"Whenever the money would be sent from MSC to the UTCSCUL account, a dfcu Bank official would channel it to a different account in the same bank and in the same name (UTCSCUL). The other account number is 01013677675964. It is from this account that the suspects would withdraw the money," a detective privy to the investigations revealed.

Police is also wondering why opening up of the UTCSCUL accounts in dfcu was allegedly done without following the proper procedures as laid out by the bank.

"When opening an institutional account, it must be attached to the institution's constitution. But this was not the case while opening the UTCSCUL accounts," a source said.

Arrested

The Criminal Investigations Directorate (CID) spokesperson, Charles Mansio Twiine, said detectives have since arrested six people in connection to the case.

These include Pamela Ainomugisha, the Human resource manager UTCSCUL, Joan Asiimwe Baryaruha, a teacher and Julia Birungi, a lawyer and the assistant credit officer. 

Others were; MSC executive director John Peter Mujuni and John Mwebembezi, the head of finance and administration. Twiine said preliminary CID findings place UTCSCUL at the centre of the suspected fraud, where teachers' loan funds were allegedly stolen.

There are 300 registered teachers' SACCOS across the country.

"Ainomugisha is among the three signatories of the UTCSCUL SACCOS that received money for teachers and later allegedly put it to private use," Twiine said.

Ainomugisha's arrest comes at a time when CID extended investigations to the education and finance ministries, Solicitor Generals' office, and trade ministry.

The money (sh25b) was given to the teachers by President Yoweri Museveni as a grant in 2011.

Detectives summoned some education officials after a meeting with the education ministry permanent secretary, Alex Kakooza, last month.

Investigators had cast a wide net by probing the whole sh25b given by President Museveni.

Family affair

Earlier, it had been reported that the current saga at the MSC has been blamed on interference in the board's decision-making process by politicians and their family members working at the centre.

The details emerged recently when officials from MSC, among them who were board members, appeared for questioning and statement recording at CID in Kibuli, Kampala.

Quoting a UMSC official, detectives said, "The main challenge facing the institution is a conflict of interest.

Family members are running the institution and that is how some money has ended up being swindled." Charged Mujuni, 51, Mwebembezi, 51, Baryaruha, 52, and Birungi, 27, were charged and remanded to Kitalya Prison over theft of the money.

The accused denied the charges of embezzlement and conspiracy to defraud when they appeared before the Anti-Corruption Court Grade One Magistrate, Moses Nabende, a fortnight ago. They have since been granted bail.