Mobile Money fraud: Witnesses pin former bosses, Mwami exonerated

Details of how former MTN Uganda staff allegedly manipulated loopholes in the company’s mobile money system to steal billions of shillings have emerged, almost four years after the scandal broke, with witnesses exonerating one of the key suspects.

According to court documents, six former MTN employees – Patrick Ssentongo, Joan Nabugwawo, Brian Okurut, Angella Ayo, Eriya Baryamwijuka and Richard Mwami – allegedly defrauded MTN of Shs 16bn in a scam that spread between May and December 2011 alone. Also, they are charged with eight counts of embezzlement, electronic fraud, unauthorized disclosure, and neglect of duty, among others.

Court papers claim that at one point, between May and December 2011, the above individuals stole Shs 3.7 billion in one swoop. The least amount of the money they allegedly stole was Shs 8m.

At the Anti-corruption court in Kololo, where the case is being heard, Barbra Nalukwago, a former business analyst at MTN, said the scam came to the fore after she was told to investigate abnormal money movements on the mobile money platform.

MWAMI EXONERATED

Testifying as the second prosecution witness, Nalukwago exonerated Richard Mwami, who was the head of public access mobile money at the time, saying it was him who gave her instructions to investigate the fraud. 

“I discovered that 17 subscribers had received Shs 21bn abnormally. This happened between the months of June and December 2011,”she said.

She told court: “There was no way he [Mwami] could have got involved since he was the one who gave orders to do the investigations. If he had stolen money he couldn’t have sanctioned the investigations.”

Yet Mwami, according to a charge sheet drawn by the Director of Public Prosecutions, is one of the prime suspects.

“Richard Mwami between May and December 2011…neglected his duty of ensuring that the verification performance plans and procedures were adhered to by his supervisees in the operations of the  MTN mobile money business thereby resulting into loss to the company,” the charge sheet notes.

Meanwhile, Nalukwago said that when she discovered the fraud, MTN bigwigs instead turned the fire on her.

“They could summon me now and then and subject me to numerous queries. I finally threw in the towel [and resigned],” she said, adding that Mwami, the whistle-blower, was not spared either since “he was charged with causing financial loss of more Shs 10bn.”

FICTITIOUS ACCOUNT

Another witness, Phraise Lubega, the former head of Information Technology Systems (ITS) at MTN, pinned Patrick Ssentongo, who was employed as a finance manager, saying he created a fictitious account in the name of Ronald Ssebugenyi in order to steal money.

“The account of Ssebugenyi was created by Ssentongo on February 4, 2011 at 06:50 using his official user account SENPAT,” he told court.
“Ronald Ssebugenyi has never been an employee of MTN, my lord [Justice Gidudu].”

Lubega, who was led by State Attorney Marion Asio, explained that Angella Ayo’s account was linked to Ssebugenyi’s account in that all her mobile money transactions would come to Ssebugenyi’s account. Ayo, also one of the accused, worked as an assistant revenue analyst in 2011.

But when a perplexed justice Lawrence Gidudu asked Lubega if he thought there was collusion between Ssentongo and Ayo to steal money,  Lubega replied: “My lord [Justice Gidudu] I cannot tell but Angella should have complained about that but she did not do so.”

Lubega also testified that after getting the money he wanted, on December 2, 2011 at 9:30am, Ssentongo disabled Ssebugenyi’s account. On Monday, Lubega told court that Ssentongo and Okurut opened around 12 MTN lines which they used to steal money from the mobile money system and afterwards deactivated them, saying that the owners had died.

Lubega explained that Okurut and Ssentongo were not supposed to suspend any account on the system.

“The accounts were closed yet they had recently carried out transactions. This was irregular,” he said.

STOLEN MONEY

Justice Gidudu then asked Lubega where the money which was being stolen came from. In reply, Lubega explained that the money was being “internally generated” on the MTN system.  Earlier, Nalukwago had testified that the money which was allegedly stolen was “printed by MTN itself”.

A lot of this money, according to insiders, was stolen from MTN’s dispute account. Money would be put on this account after an MTN customer initiated a wrong transaction. The money would be categorized as sent, but the recipient would not receive it. With time, the dispute account had collossal sums of money.

Sometimes, Patrick Ssentongo and Brian Okurut would use their user accounts to transfer money.

“For instance, on the 15th September 2011 at 4:17pm, Patrick Ssentongo debited Shs 35,000,000 from the Dispute Account and wired it to the mobile money account of Alwayz Uganda Ltd.”

At one point, Shs 291m was liquidated through Always Uganda Ltd, a company where Sauda Nakimbugwe, a wife to Ssentongo, was the director and majority shareholder, according to the charge sheet. When Ssentongo’s house was searched in December 13, 2011, it was found that he had a land sale agreement and company registrations documents for Alwayz Uganda Ltd.

Meanwhile for Okurut, it was found he had land titles and receipts of plot payments. On January 2012, Ssentongo surrendered to the police and signed a written agreement with MTN where he accepted embezzling Shs 2bn.

The charge sheet shows that the printouts of the MTN mobile money Fundamo accounts – the Adjustment for Discrepancy Account, Public Access Account, and Dispute Account – indicate the accused were behind the fraudulent transactions.

According to the charge sheet, the accused also “knowingly and without authority disclosed their passwords to the MTN mobile money computer system to each other and other MTN employees” – an action that likely caused financial loss to the company.


amwesigwa@observer.ug