Uganda Police with sister security agencies have tasked Equity Bank to explain the circumstances under which a Canadian national, Clifford Potter lost more than Shs 3 billion in a fake gold transaction.
In a letter written by SSP Ayub Waisswa of the Criminal Investigations Directorate (CID) to Equity Bank’s managing director which hosts one of the two accounts of Stephen Bairukanga the alleged gold dealer, police demanded to know whether this was not a clear case of money laundering that is prohibited by law.
“It’s alleged that one Clifford Max Potter a Canadian citizen and others deposited about USD 1,000,000 to the above bank account between 2016 and 2019, under a fraudulent gold scheme of Stephen Bairukanga and the money was immediately withdrawn from the above account. It’s said that the bank facilitated the above fraud by failing to comply with the anti-money laundering regulations requiring reporting of the suspicious transactions to FIA (Financial Intelligence Authority),” the letter reads in part.
Through Muwema & Co. Advocates, Potter wrote to Equity and Stanbic banks, demanding that they refund him his money for failing to block the suspicious transactions. The letter to the two banks argues that if the banks had done due diligence, they would have realized that Bairukanga was a fake gold dealer.
It is alleged that between 2016 and 2019, Potter and others sent huge sums of money to the accounts of Bairukanga who had promised them gold. However, despite receiving the money, Bairukanga never delivered the gold. At least $986,115 and $670,123 were deposited and withdrawn from Equity and Stanbic bank accounts of Bairukanga respectively.
In an interview, a senior official at Equity Bank who asked not to be named because he is not allowed to comment about customer transactions said, they were not involved because the transaction was between two people and not the bank.
“The bank is not involved; this was a transaction between two parties. We have seen the letter from the lawyer and it’s a matter we have been handling internally, but the matter is between two people let them sort themselves. If they call us to court, we will come and explain our position but t as far as we are aware, the bank is not involved,” the senior official said.
However, Potter’s lawyer Fred Muwema said there is no way the banks can wash their hands off this matter. Muwema said although the transaction was indeed between two parties, the banks ought to have done due diligence to establish whether Bairukanga was a legitimate gold dealer in Uganda like he had presented himself to be.
“When you get suspicious money on your account, the bank is supposed to verify where this money is coming from, if you don’t have paperwork that is clear, by law, the bank is supposed to report those suspicious transactions to the Financial Intelligence Authority,” Muwema said.
He added that if the bank had done their work, they would have discovered that Bairukanga was a scam and the money wouldn’t have left the bank.
“Under the law, when the bank fails to do its duty and money gets lost, the bank is liable because it facilitated the transaction. Whereas the bank says that was a relationship between two people, it’s true, but the bank must ensure that those who hold accounts with them don’t use it for suspicious transactions. If they say they are not involved, why have they been blocking people’s accounts? The banks are the gatekeepers against illicit transactions,” Muwema said.
