Money obtained from certain crimes, such as extortion, insider trading, deceptive transactions, illegal and irregular debits is “dirty” and needs to be “cleaned” to appear to have been derived from legal activities, so that banks like DTB and other financial institutions will deal with it without suspicion. Money can be laundered by many methods that vary in complexity and sophistication.
Looking beyond the surface, there is a revelation from Ham Enterprises indicating how the illegal debits and fraud tendencies carried out on the company’s accounts could be linked to the bank’s top management. In His response to DTB SUBMISION in the Saturday Vision of August 26, 2020 Ham noted that…. “Let courts of law first determine the case we filed against the Bank for recovery of our money. Then we shall proceed to file cases against individuals, holding them accountable for the fraudulent and money laundering acts that caused unlawful debits of money from our accounts, good enough; Ham Enterprises (U) Ltd being a high-profile client only dealt with top management with both DTB Uganda / DTB Kenya.”
When talking about Objectives of the newly formed and fully Facilitated Uganda Borrowers Association, he echoed that “There is need to protect national interests when it comes to Banking and avoid extortion/exploitation as it stands today. The fact is that there exists acts of Tax evasion/avoidance by Banks and money laundering. We intend to raise this with the Government and file cases in courts of law to that regard.”
Ham further reiterated that “When it comes to big loans why do Banks prefer raising money from their branches/partners abroad that are not registered in Uganda rather than recapitalize their Banks on ground? It’s illegal and amounts to money laundering. These banks do so because they don’t want to pay taxes to the Government on these loans so Uganda is fully extorted/exploited and used as a mere conduit for the progress of other economies.”
Generally, Money laundering is the conversion or transfer of property; the concealment or disguising of the nature of the proceeds; the acquisition, possession or use of property, knowing that these are derived from criminal activity; or participating in or assisting the movement of funds to make the proceeds appear legitimate.
Money obtained from certain crimes, such as extortion, insider trading, insider fraud, deceptive transactions, illegal and irregular debits is “dirty” and needs to be “cleaned” to appear to have been derived from legal activities, so that banks like DTB and other financial institutions will deal with it without suspicion. Money can be laundered by many methods that vary in complexity and sophistication.
Money laundering involves three steps: The first involves introducing cash into the financial system by some means (“placement”); the second involves carrying out complex financial transactions to camouflage the illegal source of the cash “layering” (this is what DTB has over the years been doing to HAM) ; and finally, acquiring wealth generated from the transactions of the illicit funds (“integration”), Just a revelation in Ham termination letter that shows how “DTB unjustly enriched themselves jointly and severely, Through their vigorous, deceptive, fraudulent, and unscrupulous, under regulated, unfair, unjust schemes, using their superior bargaining Position that contracted Ham Enterprises into unconscionable terms of contract.” Some of these steps may be omitted, depending upon the circumstances. For example, non-cash proceeds that are already in the financial system would not need to be placed.
According to the United States Treasury Department:
Money laundering is the process of making illegally-gained proceeds (i.e., “dirty money”) in this case read “Defrauded Money” appear legal (i.e., “clean”). Typically, it involves three steps: placement, layering, and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the “dirty money” appears “clean”.
The United Nations Office on Drugs and Crime (UNODC) estimates that the amount of money laundered globally in one year is “2–5% of global GDP, or $800bn – $2tn in current US dollars.”
Most anti-money laundering laws openly conflate money laundering (which is concerned with the source of funds) with terrorism financing (which is concerned with the destination of funds) when regulating the financial system.
Some countries render obfuscation of money sources as constituting money laundering, whether intentional or by merely using financial systems or services that do not identify or track sources or destinations. Other countries define money laundering in such a way as to include money from activity that would have been a crime in that country, even if the activity was legal where the conduct occurred.
Criminalization
The elements of the crime of money laundering are set forth in the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and Convention against Transnational Organized Crime.
Money laundering can take several forms, although most methodology can be categorized into one of a few types. These include “bank methods, smurfing [also known as structuring], currency exchanges, Illegal Mass debits/defraud and double-invoicing”.
DTB’S NOTABLE CASES
In July 2019, The National Intelligence Service of Kenya fingered Diamond Trust Bank over links to money laundering and terrorism financing.
According to the highly guarded report, the bank had been accused of knowingly aiding terrorism and demanded an immediate investigation into the allegations and prosecution of senior officials including CEO Naseem Devji.
The group CEO Nasim Devji (Kenya) was subsequently arrested alongside other bank officials for aiding and abetting terrorism in Nairobi. Nasim was also in direct communication with the terrorists who raided the 14 Riverside complexes in Kenya. They held an account at Diamond Trust Bank’s East Leigh branch.
The bank was on the spot for complacency in complying with banking regulations with Kenya DPP Haji revealing how investigations by the relevant agencies showed that the terrorists had been withdrawing large amounts to the tune of Ksh50M(About Ugx1.8Bn) prior to the attack million, transactions which were never reported to the Financial Reporting Centre (FRC).
Director of Public Prosecutions (DPP) Noordin Haji said the money withdrawn from Diamond Trust Bank (DTB) Eastleigh branch was wired to Jilib town in Somalia, “which is the headquarters” of Al Shabaab militia and also to Syria to support the outlawed ISIS group.
Diamond trust bank, in 2018, was also under the director of public prosecutions’ magnifying glass as one of the main banks in the country that always failed to comply with the central bank of Kenya’s prudential guidelines on moving money.
A furious Noordin Haji described the money laundering bank as a notorious institution.
NOT THE FIRST TIME
DTB GETS FINED UNDER ANTI MONEY LAUNDERING LAWS IN KENYA
On Thursday March 5, 2020 Kenya’s Chief Prosecutor Fined Diamond Trust Bank Ksh56 million shillings ($542,360) for violating anti-money laundering laws, adding that his office reserved the right to prosecute it in the future.
The charges related to the theft of nearly $100 million from the National Youth Service (NYS). Dozens of senior government officials and business people were charged in May 2018 with various crimes.
Thursday’s announcement was Third time the bank was facing fines in Kenya. In 2018, the central bank fined the five banks (Diamond Trust Bank inclusive) nearly $4 million for failing to report suspicious transactions.
In 2019, DTB was also fined for Aiding and abetting Terrorism in Nairobi with special link to the D2 Riverside attack.
Chief Prosecutor Noordin Haji told reporters that further investigations found the lender had failed to put in place adequate systems to combat money laundering and failed to know their customers as the law required.
He was deferring prosecuting the bank, he said, to see if IT met a deadline to improve their practices.
The C.E.O Nasim, who flanked Haji as he addressed the news conference, declined to comment.
ANOTHER LAUNDERING CASE
In 2015, DTB Kenya, was mentioned as a conduit to siphon funds from Imperial Bank. This led to the collapse of Imperial Bank, DTB then expressed interest to take over the bank.
But DTB’s interest in Imperial Bank was not that of an ordinary investor. For the bank had a lot to hide in its past dirty dealings with Imperial Bank depositors’ funds which eventually led to the collapsed bank being placed under receivership.
In fact, the role of DTB in the collapse of Imperial Bank come under sharp focus following its high-powered push to acquire the collapsed bank.
A forensic audit commissioned by Imperial Bank non-executive directors shortly after the death of former group managing director Abdulmalek Janmohammed showed that DTB was one of the two banks that both Janmohammed and his co-conspirators used to move the bank’s funds in the KSh34 billion fraud.
Data gathered by the forensic auditing firm, FTI Consulting, showed that at the time of the collapse DTB held KSh408 million that had been fraudulently moved from Imperial Bank by directors of W.E Tilley (Muthaiga) Ltd, the co-conspirators in the fraud.
Further information showed that DTB was used by the directors of W.E Tilley to lauder proceeds of the fraud.
For example, five months before Imperial Bank was placed under receivership, DTB received a KSh4 billion transfer from the Emirates National Bank of Dubai into the account of one of the directors of W.E Tilley, Firoze Haiderali Jessa.
Ordinarily, such huge transfers are supposed to be reported to Kenya’s Financial Reporting Centre (FRC) which scrutinises sources to prevent laundering of funds from drugs and terrorism in the country. However, there is no evidence to show that this huge transaction was ever reported to FRC.
A trail of the fraud transactions showed that architects of the fraud moved funds in circular motions from Imperial Bank to both DTB and Fidelity Bank (now SBM Kenya) from where funds would be either be withdrawn in cash or wired to foreign bank accounts owned by W.E Tilley directors or Janmohammed and then back to Nairobi.
Similarly, Ham Enterprises (U) Ltd.’s comprehensive audit report indicate how Huge Sums totaling to over $34,000,000 Million (United States Dollars Thirty Four Millions) had been fraudulently debited from the Company’s shillings and Dollars accounts in a spread period of about 10 years through Extorsion and unjust schemes among many other forms there by the Bank’s Directors unjustly enriching themselves jointly and severally, which is a form of money laundering as explained above .
Lets wait for the Courts to determine the matter and see what happens afterwards.
We shall keep you updated, Just watch the Space.
Would you like to get published on this Website? You can now email Uganda Times: an Opinion, any breaking news, Exposes, story ideas, human interest articles or interesting videos on: [email protected]. Videos and pictures can be sent to +256 750 501543 on WhatsApp
