Lotus Bank In N336 Million Fraud As Court Orders Post-No-Debit on Involved Accounts

Lotus Bank Limited has been hit by an insider fraud scandal allegedly involving over N336 million.

Reports indicate that Abdulkarim Arome Mohammed, a staff member in the bank’s Financial Control Department, exploited his system privileges to defraud the bank of a total of N336,993,863.35.

This incident comes just two months after the bank reportedly lost N1.13 billion in another fraudulent scheme.

### Details of the Fraud

In an affidavit sworn by the bank’s fraud investigation officer, Gbenga Ojerinde, and filed by Lagos-based lawyer Efe Eze-Iyamu, it was revealed that the fraud was uncovered during an investigation into suspicious Mudarabah profit payments to customer accounts.

A thorough review of transactions between January 2023 and May 2024 exposed Mohammed’s fraudulent activities.

### How Lotus Bank Staff Defrauded Customers

According to the affidavit, Mohammed had allocated profits to three accounts that were not entitled to the payments. One of these accounts belonged to his wife, Khadijah Aliyu Shuaib, who also worked in the Financial Control Department and was responsible for profit distribution.

The other two accounts were linked to individuals named Peter Daniel and Emmanuel Ocheja Odogwu. The total amount involved in the fraud was N336,993,863.35.

An analysis of Peter Daniel’s account showed that funds were transferred to his accounts at two other banks, while funds from Khadijah Shuaib’s account were primarily moved to Cresco Oil & Gas Limited, a company reportedly owned and managed by Mohammed, his wife, and Peter Daniel.

After discovering the fraudulent transactions, Lotus Bank alerted the Nigeria Inter-Bank Settlement System Plc (NIBSS), which in turn notified the relevant banks to freeze the accounts and reverse the funds. While some banks have complied with the directive, others have yet to do so.

### Lotus Bank’s Response to the Fraud Cases

In response, Lotus Bank has filed a request with the court to impose a post-no-debit restriction on the accounts involved in an effort to prevent further movement of the fraudulent funds.

The bank has also pledged to indemnify the financial institutions involved if the court later determines that the restrictions were unjustified.

Judge Chukwujekwu Aneke has ordered 28 listed financial institutions to place post-no-debit restrictions on the accounts linked to the beneficiaries of the fraudulent scheme, in line with the amounts they had received.