Heist inside Absa Bank

Fresh details have emerged revealing how a sophisticated fraud syndicate inside Absa Bank exploited bank’s internal vulnerabilities and procedural failures to siphon millions of shillings from customer accounts without immediate detection, The Informer Media Group can authoritatively reveal.

Forensic reports linked Lilian Adhiambo, former manager of Absa Bank, Karen Prestige branch to the heist without being detected exposing bank’s system to manipulation.

In what points to internal security lapses, the forensic investigation reports further shows that Adhiambo authorised payments without due diligence, failed to verify customers’ identification documents, made suspicious inquiries, and communicated with a non-customer, who was a suspect

The Employment and Labour Relations Court has since upheld Adhiambo’s dismissal.

She was fired over seven years ago for fraudulent transactions involving a loss of Sh6.3 million. The court ruled that the dismissal of Lilian Adhiambo in November 2019 was fair and lawful.

The court ruled that her dismissal was lawful and justified, citing gross misconduct and negligence that exposed customer funds to fraudsters.

The judgment sheds new light on alleged internal security lapses and manipulation of banking systems that allowed the fraudulent transactions to go through undetected.

According to court records and forensic investigation reports presented during the case, Adhiambo was linked to a series of suspicious transactions involving withdrawals and transfers amounting to over Sh6.3 million.

Investigators found that the former branch manager authorised payments without conducting proper due diligence, failed to verify customers’ identification documents and communicated directly with individuals suspected to be part of the fraud network.

The reports further indicated that she made suspicious inquiries and approved Real Time Gross Settlement (RTGS) transactions despite glaring irregularities in the transactions.

Although Adhiambo denied any wrongdoing, insisting that her role was limited to authorising transactions after verification by junior officers and other departments, the court found overwhelming evidence linking her to the fraudulent dealings.

The court heard that Adhiambo admitted signing counter cheques and authorising RTGS transfers linked to the fraudulent transactions.

Evidence presented in court further showed that she allegedly advised suspects to withdraw part of the money in cash and transfer the remaining amounts electronically through RTGS channels.

“In these circumstances, I see no difficulty in finding that the respondent has proven on a balance of probabilities that the claimant grossly misconducted herself,” the court ruled.

The judge stated that the evidence clearly demonstrated negligence on the part of the former manager in safeguarding customer funds and noted that the bank was not required to prove that she personally benefited from the fraudulent scheme.

The court emphasised that Adhiambo, as a senior branch manager with decades of banking experience, had a heightened responsibility to ensure strict compliance with banking procedures and internal controls.

“She was required to exercise due diligence before approving any transactions, even where her junior staff had already approved them,” the court stated.

Adhiambo had moved to court seeking reinstatement and compensation for what she termed as unfair and inhumane dismissal.

In her claim, she sought 12 months’ salary amounting to Sh6.49 million, one month’s salary in lieu of notice worth Sh500,145 and service pay amounting to Sh10 million for her more than two decades of service at the bank.

However, the court dismissed most of her claims and only awarded her Sh575,022 for accrued leave days after finding that she had taken only seven leave days in 2019, leaving a balance of 24 days owed to her.

Court documents show that Adhiambo joined the bank in 1988 as a manager’s assistant and steadily rose through the ranks before becoming a branch manager in 2007.

By 2019, she had been deployed to the Karen Prestige branch and was earning a monthly salary of Sh500,145.

On October 23, 2019, she was issued with a suspension letter over what the bank described as “questionable and unprocedural transactions.”

Adhiambo told the court that upon returning to her office after the suspension, she found her desk reassigned and some of her personal belongings interfered with.

She argued that the disciplinary process was unfair and claimed she was denied an opportunity to appeal against the dismissal decision.

The former manager also challenged the forensic investigation reports, arguing that the evidence against her was speculative and insufficient to meet the threshold required to prove fraud.

However, the bank’s senior forensic investigator, Michael Ngobo, testified that multiple suspicious transactions were processed under Adhiambo’s supervision.

Among the transactions highlighted in court was the withdrawal of Sh3.6 million from a customer account on October 13, 2019, alongside several other questionable withdrawals later that month.

The investigations concluded that the transactions were fraudulent and recommended disciplinary action against Adhiambo and other individuals named in the reports.

Absa Bank maintained that due to her seniority, experience and position as branch manager, Adhiambo was expected to uphold the highest standards of banking integrity and operational compliance.

The lender argued that her direct authorisation of the transactions and failure to follow laid down procedures contributed significantly to the loss of customer funds.

In its final determination, the court agreed with the bank’s position, concluding that the dismissal was justified despite Adhiambo’s long service at the institution.