Bad Deals Banks Do: A Perturbing Tale Of How Renowned Ugandan Gold Fraudster Bairukanga Used Equity and Stanbic Banks To Launder Billions Into Uganda

In their mission and vision statements, Equity Bank claims “To be the champion of the socio-economic prosperity of the people of Africa” by offering “inclusive, customer-focused financial services that socially and economically empower our clients and other stakeholders” via providing “inclusive financial services that transform livelihoods, give dignity and expand opportunities”!

In Stanbic’s case, they boast of being “the leading financial services organization in, for and across Uganda, delivering exceptional client experiences and superior value.” The holding company also claims to aim at being the “leading financial services provider in, for and across Uganda, delivering exceptional client experiences and superior value.” Sounds like sweet music?

But alas! Going by the accusations leveled against both financial institutions, it’s in black and white how they relentlessly work contrary to their acclaimed purity. They are not only turning their banks into enablers of gold scams in Uganda but also tainting the would-be international investment destination country’s reputation!

The Story

It is a sad tale of a Canadian investor, Clifford M. Potter, who, at the hands of a renowned fraudster, Stephen Bairukanga, reportedly lost USD 1,656,238 million, an equivalent of about UGX 6.2 billion in one go! This massive sum vanished under the guise of a legitimate gold transaction.

Whereas the transaction under review would pass for a normal one, the speed at which the banks released the staggering amounts to Bairukanga cannot only alarm the ordinary ears but also their regulator, the Central Bank! Both banks seem to have totally ignored the principles of drawing such huge amounts vis-a-vis verifying how the same was received in the holder’s accounts.

Ignored Regulations

Both banks seem to have totally ignored the principles of drawing such huge amounts vis-a-vis verifying how the same was received in the holder’s accounts. “It is sad that the bank facilitated the above fraud by failing to comply with the anti-money laundering regulations [that] require reporting of the suspicious transactions to FIA (Financial Intelligence Authority),” writes SSP Waiswa Ayubu, the Ag. CID Commander at Kampala Metropolitan Police base, in a letter to both Stanbic and Equity Banks, dated June 27th, 2024.

The police have since summoned the officers in charge of the transactions at both banks respectively, to help the police establish the reasons behind their questionable acts in the said fraud. “This is therefore, to request you to identify for us the responsible officers who can explain the above allegations…,” added SSP Waiswa.

Just like several other bogus gold deals, the impugned treasure deals and the fraudulent bank transactions took place three years ago, between 2019-2022. And these were other than the similar ones committed by the same Stephen Bairukanga through Equity Bank between 2016 and 2019 but with a different victim.

Trust Bairukanga’s shrewdness. Whereas the fictitious gold transactions were committed three years ago, his victim Clifford Max Potter, as well as his co-investors, got to confirm they had been conned, only much later in July 2022! Going by the bank statements in our possession, Potter made 30 money transfers on different bank accounts, which the bank allowed Bairukanga to instantly withdraw at an alarmingly questionable speed.

“It has been established that the above-named fraudster (Bairukanga) was able to access USD 568,456 and USD 101,667 respectively, remitted by our client into his bank accounts in the bogus gold transaction, only through the dishonest assistance of the bank which facilitated him to instantly draw cash, in total disregard of the FIA regulations,” writes Muwema & Co Advocates, Potter’s Attorney.

The Modus Operandi

Despite the crackdown on fake gold dealers by police, this and other latest incidents show fraudsters like Bairukanga still exist. They use gold-plated metal bars, nuggets, or powder to dupe their victims, majorly foreigners. They show their prospective buyers samples of genuine gold which are positively evaluated before entering into sale agreements. Buyers easily fall into a trap of making huge profits and hence make money transfers.

It, however, sometimes takes time for the victims to realize they have been conned. This is because upon the transactions, they take a little longer to receive their consignments at the agreed destination, which normally is by shipping and, on rare occasions, by air. The fraudster also engages them with several pieces of paperwork which mostly include tax documents which consume a lot of time.

“We would like to appeal to all prospective buyers in the gold industry, to purchase gold from authorized dealers, with valid trading licenses to conduct business. They can also seek guidance from the Ministry of Trade And Industry, the Department of Mines and Geological Surveys, The Uganda Investment Authority, and the Police Minerals Enforcement Unit, before transacting in any minerals. This will save them from the financial and legal consequences they face out of fake mineral scams,” Fred Enanga, the outgone Police Spokesman, had warned sometime in November last year.

Holding Banks Accountable

Now, Potter’s lawyers of Muwema and Company Advocates are tasking the banks to take responsibility. “As a result of abdication of (your) duty, your bank is aiding and abetting fraudsters to extort and steal from unsuspecting local/foreign investors who are lured into supposedly legitimate gold deals which turn out to be a sham,” writes the lawyers to both banks respectively, in their intention-to-sue notices.

The Conundrum

As the story unfolds, the banking industry and potential investors alike are left questioning the integrity and vigilance of Uganda’s financial watchdogs, and whether justice will be served to prevent such devastating scams in the future. This scandal not only sheds light on the vulnerabilities within the financial sector but also serves as a stern warning to investors and financial institutions to exercise heightened due diligence.

Author Profile

Stanley Ndawula: Stanley Ndawula is a two and a half decades’ seasoned investigative journalist with a knack for serious crimes investigations and reporting. He’s the Founding Editorial Director and CEO at The Investigator Publications (U) Limited