Justice Stephen Mubiru of the High Court has exonerated Stanbic Bank by dismissing with costs a suit filed by controversial Entebbe Municipality mayor Fabrice Brad Ruhinda who was accusing the bank of breaching bank-customer relationship by freezing his bank account and blocking him from accessing his money to facilitate his personal and family needs.
According to Simon Mark Kiwanuka, a former Stanbic bank Bugolobi village Mall Branch manager who was brought in court as a defendant witness, Ruhinda opened the bank account in June, 2014 with an initial deposit of US $ 1,400 which he deposited on 5th June, 2014.
In his evidence, Ruhinda told court that he has been operating a dollar current account No. 9030009189296 with the said bank.
However, on 11th August, 2017, a sum of US $ 73,262.50 was credited onto his bank account by way of electronic funds transfer from Green Global Corporation.
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On 31st August, 2017 the bank reversed the said transaction by debiting the account with the same amount and remitting the funds back to the sender noting that his subsequent attempts to transact on that account were futile since the account was blocked.
Through his lawyers of Bluebell Legal Advocates, Ruhinda told court that bank’s actions of denying him access to his money caused him financial embarrassment to the extent that he failed to pay school fees for her daughter and changed her from the school she was studying from to another school in the middle of the year.
Basing on this ground, he to pleaded to court to award him with costs and order the bank to compensate him for the breach of bank-customer relationship.
However, the bank through their lawyers of Kyagaba & Otatiina Advocates (Dentons) insisted that their clients actions are justifiable becasue the transaction which resulted in freezing of the bank account was illegal, criminal and fraudulent.
Court documents show that on 10th of August, 2017, Green Global Corporation deposited a sum of US $ 422,957.50 onto Ruhinda’s bank account and did the same on 11th of August, 2017 with an additional sum of US $ 73,262.50 being deposited on his bank account.
The bank told court that because the two transfers were inconsistent with ordinary transactions on that account, they classified them as suspicions and on 30th August, 2017, they reported the matter to Financial Intelligence Authority by a letter dated 31st August, 2017.
The Financial Intelligence Authority directed the bank to halt all transactions on the said bank account until Ruhinda provided an explanation for the source and purpose of the funds which he failed to do.
Court documents stated that the money was reversed to the sender after a request for a reversal of the transaction on grounds that it was a fraudulent scam.
Police conducted investigations into the transaction and Ruhinda was charged before Buganda Road court with money laundering but later the criminal charges were withdrawn by the Director of Public Prosecution.
The bank based on police investigation on the said transaction to prove to court that the said money was dirty and that Ruhinda was being used to clean it through money laundering.
“In his statement to the police during the ensuing police investigations, the plaintiff admitted having been involved in dealings involving gold mining and the M23 rebels in the Democratic Republic of Congo. The plaintiff admitted having served as an intermediary between an unlicensed gold dealer and the M23 rebels in relation to a transaction for the purchase of gold,” Court documents read.
The bank based on United Nations Security Council Resolution to confirm to Court that M23 is a sanctioned organisation and was condemned for establishing an illegitimate parallel administration to undermine State authority of the Government of the DRC.
Court documents state that Ruhinda as an agent and Green Global Corporation as the principal knew that they were dealing illegally in minerals and they were indirectly supporting the activities of the sanctioned M23 rebel activities in the DRC.
“The plaintiff was the pivot upon which the transaction turned. His role was to disguise the transaction as genuine. The transaction, despite being allegedly between corporate entities, is not supported by any documentation. Not even during the trial did the plaintiff produce proof of the source and purpose of the funds,” the documents read.
The documents further stated that Ruhinda on diverse occasions provided contradicting explanations of the nature of the transaction, yet passing off an illegal dealing in gold as a consultancy constitutes money laundering.
The bank statement shows that what Ruhinda claimed to be money belonging to Green Global Corporation was largely spent on meeting his personal needs and the needs of his own children.
Court documents show that Ruhinda’s bank statement of transactions from 1st January, 2017 to 8th September, 2017 in respect of account No. 9030009189296 shows that on 13th – 20th January, 2017, a deposit of US $ 10,000 was made onto his bank account, followed by multiple withdrawals in small amounts ranging from US $400 to US $ 5,000 over the next five months.
The next credit transaction occurred on 6th August, 2017 in the sum of US $ 100 followed by one point of sale purchase on 9th August, 2017 in the sum of US $ 35. This was followed by a deposit of US $ 422,957.50 on 10th August, 2017.
Ruhinda thereafter made two withdrawals in sums of US $ 25, 10,000 and US $ 50,000 on the same day, another deposit of US $ 73,262.50 was made on 11th August, 2017 and he made a cash withdrawal of US $ 155,800 on 18th August, 2017.
He thereafter made multiple points of sale purchases at the Dubai Duty Free Shop on the same day in sums of US $ 141.55, US $ 1,745.36, US $ 632.47, US $ 234.21, US $ 1,579.83, and a cash withdrawal in the sum of US $ 4,000 on 21st August, 2017 and he paid tuition for Mwiza Ruhinda in the sum of US 22,379.46 on 28th August, 2017 before withdrawing a sum of US $ 2,000 in cash on the same day.
The judge based on police investigations to confirm that Ruhinda was dealing with M23 rebels because he admitted to have organised a meeting at Serena Conference meeting room upstairs where two Amani and Cloud, all Congolese nationals and members of M23 and were discussing business deals.
“This time he discussed and agreed to supply them with equipment, medicine, housing and funding (money) to do the work. On the third day they agreed to transfer money through my account then I would withdraw and in turn give the money to the M23 because he was not comfortable dealing directly with the rebels and that being an American by nationality would sound bad. The next day Fan Wu transferred some money, about three hundred thousand US Dollars, to my account in Stanbic Bank Forest Mall Branch…… I withdrew the money and dispatched it to its destinations……While in Dubai I got to know that back home in Uganda I am wanted by Police on allegations of defrauding the management of Green Global Corporation which is not true. If given an opportunity, I can help Police to get the two M23 rebels who have been in meetings with Fan Wu and Guled,” the judge quoted Ruhinda’s statement at police to confirm that he was aware that he was participating in illegal dealings.
The judge noted that the bank acted within the law to report suspicious money which was deposited on Ruhinda’s bank account to Financial Intelligence Authority, explaining that if they did not do so, they would have committed a crime especially once the said money was used in terrorism activities and they would have been charged in courts of law.
Ono Bwino made several phone calls to Ruhinda to comment on the landmark judgement issued against him and to know whether he is going to challenge the decision at the Court of Appeal, but our phone calls went unanswered by press time.
