Commercial Bank of Ethiopia staff charged with fraud as insider theft in banking sector rises

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The Commercial Bank of Ethiopia has lost more than $314,000 to a bank fraud perpetrated at its headquarters. Twelve defendants, members of the same family, were charged with fraud and found guilty.

Prosecutor states in the charge that in December 2012, $296,000 was transferred from the bank into the account of a shell company called GBC Construction Plc. An amount of $18,000 was also transferred into the account of another company, Wondimagegn Deza Building Construction Plc.

Bank frauds following same pattern and design have been repeatedly committed in the past year. In March 2016, $852,000 was transferred from the Ethiopian Shipping Lines & Logistics Services Enterprise’s (ESLSE) account at the Commercial Bank of Ethiopia to the account of a fake company called Welka Plc.

The Attorney General later brought another charge alleging that $260,000 was transferred from the account of the enterprise at the Commercial Bank of Ethiopia to the account of a private limited company run through forged documents.

According to the charges, Tamrayehu Tekle and Ephrem Woldetensay, while working as a customer service officer and senior officer respectively at the headquarters of the bank transferred more than $314,000 into the accounts of companies run by their relatives, using the usernames and passwords of other coworkers.

The manager of bogus construction company GBC, Nibret Mamo, moved about $224,000 out of the accounts of the company and transferred it into the accounts of the other defendants. He allegedly used the remaining money for himself.

The other defendants were accused of concealing and using the money transferred to their accounts and the accounts of their companies. They tried to hide the source of the money by merging it with legally obtained money; concluding loan agreements without actually receiving any amount of money; and purchasing various cars, trucks and land, authorities said.

Tamrayehu, Ephrem and their five relatives are charged with abuse of power. All of the defendants, both the physical persons and their construction companies, were also charged with money laundering, concealing, transferring and using illegally obtained money.

Tamrayehu produced evidence proving that he had no access to either the user names or passwords of the coworkers mentioned in the charge. Though the court found him not guilty of the first charge, he was not able to defend himself in the second one. Tamrayehu’s acquittal from the first charge helped his wife, Tinsae Mamo, to be cleared from the charge of participation in abuse of power. Nevertheless, both of them could face sentences from 10 to 25 years for the second charge.

Three of the defendants were found guilty of both charges in absentia; two other defendants were also found guilty of both charges. The construction companies charged with money laundering were also found guilty. The 18th Criminal Bench of the Federal High Court adjourned the trial for 15th of November, 2016 to pass sentence on the defendants.