Yemi Edun led FCMB: A financial institution dogged by fraud related controversies

The group has nine subsidiaries divided among three business groups: commercial and retail banking, investment banking, and asset and wealth management.

As of December 2020, the Group’s total assets were valued at US $5 billion (NGN: 2 trillion).

The entity from which the bank was founded, City Securities Limited (CSL), was established in 1977 by Subomi Balogun, the Otunba Tunwashe of Ijebu, a Yoruba traditional aristocrat.

It was established in 1982 with seed from CSL. It was incorporated as a private limited liability company on 20 April, 1982 and granted a banking license on 11 August, 1983. It was the first bank to be established in Nigeria without government or foreign support.

In 2001, the name of the bank was changed from First City Merchant Bank to First City Monument Bank Limited following the bank’s transformation to a universal bank. A new subsidiary, FCMB Capital Market Limited, was formed to support its corporate finance activities.

On 15 July,2004, FCMB changed its status from a private limited liability company to a public limited liability company and was listed on the Nigeria Stock Exchange (NSE) by introduction on 21 December 2004.

Inspite of the fact that the banking industry is the most controlled and regulated industry in Nigeria, fraud has however continued to rock FCMB. It has eaten so deep into every unit and department of the bank and has assumed an epidemic dimension.

The very integrity and survivability of FCMB has been called into question in view of the incessant fraud and scandals that has rocked the bank.

The current Managing Director Yemisi Edun who replaced Adam Nuru due to an alleged paternity scandal, no doubt must do everything with her power to preserve the bank which Otunba Balogun toiled very hard to build.

Recent fraudulent and scandalous act under her watch as the Managing Director has brought up question about her competence and also about the integrity of the bank.

Only recently, an Abuja High Court ordered the bank to pay N540m to a cleric, Pastor Emmanuel Omale of the Divine Hand of God Prophetic Ministry and his wife Deborah, over false claim that they laundered N573 million for the former chairman of the EFCC, Ibrahim Magu.

Delivering the judgement in the lawsuit, Yusuf Halilu, the judge held that the bank breached its “duty of care to the claimants,” the Omales and their church.

The judgement was on the suit marked: FCT/HC/CV2541/2020 filed by Omale, his wife and the church.

The judge held that the evidence before the court showed that the bank admitted error in its report to the NFIU of entries in the account of Divine Hand of God Prophetic Ministry which was accused of laundering money on Magu’s behalf.

Halilu also said the bank claimed that the purported N573 million was wrongly reflected as credit in Divine Hand of God Prophetic Ministry’s account by its reporting system, which is recently upgraded.

The judge held that FCMB admitted the error, which brought incalculable damage to the reputation of the claimant both within and outside the Nigeria – depleting their church’s membership. Halilu said the claimants provided sufficient evidence to establish case of negligence against FCMB.

Consequently, the judge awarded N200 million as aggravated damages; N140.5 million as specific damage and N200 million as general damage.

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A few months ago, Wednesday March 2022 precisely, the Ikeja GRA manager of First City Monument Bank was docked before a Lagos High Court for allegedly aiding N1.2 billion fraud. Munis was arraigned on 15 counts amended charge alongside Dare Osamo and Ayoola Bisola who had earlier been arraigned before the court presided over by Justice Oyindamola Ogala.

At the resumption of trial, the Director, Lagos State Department of Public Prosecution, Dr Jide Martins, informed the court that the state had an amended charge to include the branch manager who allegedly connived with Dare Osamo to swindle Star Orient Nig Ltd owned by businessman, Otunba Babatunde Akanbi Babalola.

According to the amended charge, Munis on the 15th day of February, 2016, while acting as branch manager of First City Monument Bank Plc situated at No 48, Isaac John street, Government Residential (GRA) Branch, allegedly committed the offense.

The court further stated that Munis and Osamo, allegedly demonstrated intention to defraud without lawful authority or excuses approved the opening of a new account for Star Orient Nig. Ltd when there were no Special Control unit against Money Laundering Certificate number on the account opening form.

The charge also stated that the duo of Munis and Osamo, allegedly ran afoul of banking rule when they opened the account without full details of the directors of Star Orient Nigeria Limited, no means of identification or BVN (Bank Verification Number) of the directors Star Orient Nigeria Limited and upon a forged resolution purportedly signed by Dare Osamo as sole signatory when there are two directors who are signatories to star Orient Nigeria Limited’s account.

Consequently Munis pleaded not guilty to four-count charge relating to him out of the fifteenth count charges.

The state prosecutor, thereafter, asked the court for a trial date and remand order pending the determination of his bail application.

In a counter reaction, J.O Olushade, who represented Dr. Wale Olawoyin, SAN, as counsel to the branch manager, informed the court of his bail application while praying for liberal terms.

The defense counsel moved the bail application by adopting it as he prayed the court to admit the defendant to bail because the offense allegedly committed by the defendants are bailable.

Opposing the bail, the state DPP said the court must consider the severity of the offense.

Delivering ruling on the bail application, Justice Ogala granted the 3rd defendant bail in the sum of N20million with two sureties.

The court ordered that the sureties must be residents in the state and have title to landed property. She said they must provide evidence of tax payment to the state government as well as their residential address which must be verified. She further ordered the defendant to submit his international passport.
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Also, the special offenses court sitting in Lekki, Lagos State, earlier in the year, heard of a case of N900 million committed using ATM cards linked to a victims’ FCMB’s accounts.

A document showed how scammers hacked into the computer database of First City Monument Bank and stole over N900 million belonging to customers were brought before Justice Oluwatoyin Taiwo.

The Economic and Financial Crime Commission arraigned seven fraudsters who perpetuated the act; Gideon Oluwatimilehin, Abiodun Aina, Samuel Adenitiri, Oluwasegun Daliu, Olaitan Ajibola Shehu, Moyosore Sulaimon and Adeyinka Akinji.

The suspects were accused of conspiracy to defraud and unauthorized access to FCMB computer materials and software.

The EFCC alleged that the seven defendants did steal by unauthorized transfers and withdrawal from various FCMB points nationwide of the sum of 900 million, property of the owners of and various customers of FCMB from their accounts to various accounts outside the bank via POS and ATM.

Tendering the certified documents showing how the scammers hacked into the computer database of the bank before the special offenses court on Friday, an investigation officer in the Group Internal Audit Division of FCMB, Olayinka Olaleye disclosed that the fraudulent act was carried out between March 9 and 10, 2018.

Olaleye, who was introduced as a witness to the court by the prosecuting counsel, B.C Bennett, revealed that the Automated Teller Machine (ATM) card with details of one Abdullahi Kazeem was linked to the corporate account of Eko Hotel Limited was used to withdraw a large sum of money by the defendants.

He said: “The defendants and other perpetrators still at large gained unauthorized access into the system of FCMB. They fraudulently conspired together and deleted information and hacked into the password of some users in the bank to increase transaction limit on the corporate accounts, increased the transaction amount and they increased the transaction frequencies and linked their ATM card into these corporate accounts to make huge withdrawals.

“The fraud did not take the usual pattern where you can easily narrate how money moves from one account to another. The transaction limit and amount on the Eko Hotel account was fraudulently enhanced as our system was hacked otherwise one shouldn’t have been able to withdraw N150,000 or N500,000 daily.

“On the same day March 9, 2018, various ATM withdrawals of N20000 each was carried out because the transaction limit on the account had been enhanced and the suspects were able to make limitless withdrawal. That was how the ATM card of Abdullahi Kazeem that was fraudulently collected by Gideon Oluwatimilehin and later handed over to Osita Martins who is currently at large, was used.

“If not for forensic investigation, there is no way one will be able to trace the withdrawal to the account of Kazeem. By the time we conducted a forensic investigation on the account of Eko Hotel Limited, we were able to see the card linked to the account and cash withdrawals were made”.

He further stated that the transactions on the Eko Hotel’s account were fraudulently executed via transfers and cash withdrawals using the ATM.

The investigation officer further told the court that ATM card of another defendant Adeyinka Akinji, was linked to the account of MTN to withdrawal millions of naira.

“The card of Adeyinka Akinji was linked to the account of MTN. His own card was handed over to Oluwasegun Daliu and the pattern used was cash withdrawal through ATM. The transaction took place on the same day because the transaction limit at account of MTN were fraudulently enhanced; the transaction count was increased as well,” he stated.

Olaleye added that the defendants and others still at large also defrauded FCMB by linking the ATM card belonging to Olaitan Ajibola Sheu to the corporate account of Multichoice Nigeria Limited. He stated that the defendants made huge withdrawal from Multichoice’s account via ATM and POS.

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On Wednesday, June 1, 2022 the Economic and Financial Crimes commission, Benin Zonal command arraigned a banker, Adeyemi Sule Waliu before Justice Okon Abang of the Federal High Court sitting in Warri, Delta State for forgery and obtaining by false pretence.