LOTUS Bank Employee ‘Embezzles’ N336M After N1.1B Loss

LOTUS Bank Limited is once again in the spotlight for financial mismanagement after allegedly being defrauded of N336,993,863.35 by one of its employees.

Touchaheart Nigeria– This incident comes just two months after the bank suffered a significant loss of over N1.1 billion.  The recent fraud was revealed through an affidavit sworn by Gbenga Ojerinde, a fraud investigation officer at the bank, and filed by Lagos-based lawyer Efe Eze-Iyamu. According to the affidavit, LOTUS Bank detected suspicious Mudarabah profits being transferred into several customer accounts. These questionable transactions sparked an investigation that uncovered fraudulent activity involving a staff member.

 

Employee Fraud Uncovered

A detailed review conducted by the bank from January 2023 to May 2024 revealed that the staff member, Abdulkarim Arome Mohammed, who worked in the Financial Control Department, allegedly manipulated his system privileges to misappropriate profits. Mohammed is accused of diverting funds to three undeserving accounts, including one belonging to his wife, Khadijah Aliyu Shuaib, who also works at the bank as a FINCON Officer in charge of profit distribution. The other two accounts belonged to Peter Daniel and Emmanuel Ocheja Odogwu. In total, N336,993,863.35 was fraudulently allocated to these accounts.

 

The investigation showed that Peter Daniel’s account was used to transfer the funds to his personal accounts at two different banks. Similarly, funds from Khadijah Aliyu Shuaib’s account were funneled into Cresco Oil & Gas Limited, a company owned and operated by Mohammed, his wife, and Peter Daniel. This deliberate siphoning of funds is at the core of the fraud case facing the bank.

 

LOTUS Bank Takes Legal Action

Upon discovering the fraudulent activity, LOTUS Bank immediately alerted the Nigeria Inter-Bank Settlement System Plc (NIBSS). The NIBSS then informed the respondent banks involved, requesting that they freeze the implicated accounts and reverse the funds. While some banks have complied and frozen the accounts, others have not fully adhered to the directive.

 

In response, LOTUS Bank has petitioned the court to impose a post-no-debit order on the accounts involved, preventing any further withdrawals or transfers of the embezzled funds. The bank has also pledged to indemnify the financial institutions involved, should the court find the bank’s actions to be unjustified.

 

Court Order to Freeze Beneficiary Accounts

Judge Chukwujekwu Aneke, who is overseeing the case, has issued an order to 28 listed financial institutions to freeze the accounts of the beneficiaries involved in the fraudulent transactions. The court’s directive mandates the imposition of post-no-debit restrictions on these accounts, ensuring that no further funds can be withdrawn or transferred beyond the fraudulent amounts.

 

LOTUS Bank’s legal team has emphasized the importance of this measure to safeguard the remaining funds and prevent further financial loss. The bank remains determined to recover the misappropriated money and hold those involved accountable.

 

As the investigation continues, LOTUS Bank is grappling with the fallout from yet another significant financial setback. This recent fraud case raises serious concerns about internal controls and employee oversight within the institution. The bank is expected to take additional steps to strengthen its fraud detection systems and prevent future incidents of this nature.

 

The case serves as a reminder of the ongoing challenges facing financial institutions in Nigeria, particularly in terms of safeguarding assets and preventing internal fraud. LOTUS Bank’s swift action in addressing the issue and seeking legal recourse reflects its commitment to ensuring accountability and transparency moving forward.