Exclusive: How Lotus Bank lost N336m, N1.1bn to fraud, glitch within three months

The bank fraud scandal involves an employee stealing over N336m, and a technical glitch allowing unauthorised withdrawals of N1.1bn.

[dropcap]E[/dropcap]arlier today, the Nigerian media space has been awash with stories of the unfortunate incident of fraud at Lotus Bank Limited.

However, most of the reports are mixed up, and Freelanews can exclusively give the true account of what really happened.

Also read: Customer claims Lotus Bank stole N20mln from her account

The two separate incidents, erroneously merged in most reports published, involved a case of N336,993,863.35 and N1,134,491,604.31.

An employee of the bank, Abdulkarim Arome Mohammed, a staff member in the Financial Control Department, defrauded his employer and illegally transferred the said funds to the accounts of his wife, Khadijah Aliyu Shuaibu, a full-time housewife, and two other innocent acquaintances, Peter Daniel and Emmanuel Ocheja Odogwu.

In an affidavit sworn by Gbenga Ojerinde, a fraud investigation officer at the bank, and filed by Lagos lawyer Efe Eze-Iyamu, it was revealed that LOTUS Bank discovered suspicious Mudarabah profits paid to customer accounts upon conducting a comprehensive review from January 2023 to May 2024.

Mohammed exploited his system privileges to allocate profits to perpetrate this crime, which was discovered sometime in June 2024.

A review of Peter Daniel’s account showed that funds were transferred to his accounts at two banks, while funds from his wife’s account were largely moved to Cresco Oil & Gas Limited, a company owned and managed by Mohammed.

While Odogwu, who unintentionally benefited by over N3 million from the heist, has refunded the money, Daniel, whose account was fattened by N18 million, is yet to balance up.

The other case involves a whopping N1,134,491,604.31 lost by the bank due to a recent technical glitch, whereby the bank’s customers, mainly in Minna, Abuja, and Kano, were able to transfer more than their account balances.

It was reported that on Saturday, July 20, 2024, several customers of the bank were able to withdraw substantial naira funds far more than their account balances showed.

Before the bank realised what had happened, a sum of N1,134,491,604.31 had been lost.

Immediately upon discovery, the bank notified the Nigeria Inter-Bank Settlement System Plc (NIBSS), which in turn notified the respondent banks to place holds on the accounts and reverse the funds.

While some respondent banks have complied partially, others have not made any reversals of the funds received as a result of the fraudulent activities.

Consequently, the bank urged the court to grant an order placing post-no-debit on the individual holders of the various accounts into which the funds were electronically transferred due to these illegal activities.

They have obtained a court order to freeze both first beneficiaries and second beneficiaries. Some have returned the money, while many others have not, as many have allegedly purchased items like iPhones and home appliances.

The presiding Judge, Chukwujekwu Aneke, after hearing Efe Eze-Iyamu, counsel for LOTUS Bank Limited, moved in terms of the motion paper.

He ordered that the 28 financial institutions listed before the court immediately place post-no-debit restrictions on all the beneficiaries listed in the annex to the application to the extent of the amounts reflected in the said list, being the amounts that the listed financial customers received from the fraudulent credit of the said accounts.