Kampala, Uganda – The Police in Kampala are investigating a case in which a Canadian citizen Clifford Potter lost more than sh6 billion in a fake gold transaction.
SSP Ayub Waisswa of the CID Kampala Metropolitan Police has written to a Kampala bank which hosts one of the two accounts of the accused Stephen Bairukanga, seeking an explanation why this is 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account between 2016 and 2019, under a fraudulent Gold scheme of Stephen Bairukanga and the money was immediately being withdrawn from the above account.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 his Muwema & Co. Advocates, Potter has written to two Kampala banks, demanding that they refund him his money for failing to block suspicious transactions.
The letter seen by Uganda Radio Network to the two banks argues that if the banks had done due diligence, they would have realised that Bairukanga was a fake gold dealer. The letters allege that between 2016-2019, 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 At least $986,115 and $670,123 were deposited and withdrawn from the said bank accounts of Bairukanga respectively.
In an interview, a senior bank official who asked not to be named because he is not allowed to comment about customer transactions said, they are 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 I want 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.
Fred Muwema, the lead lawyer at Muwema & Co. Advocates in an interview said there is no way the banks would 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.
Potter is not the first person to lose billions in fake gold transactions, in the past the police have investigated many cases in which foreigners have lost a lot of money in the hope of getting gold which never materialises.
