Dozens of Bank of Maldives staff implicated in historic embezzlement scheme

The corruption watchdog has implicated dozens of Bank of Maldives staff in the Maldives’ biggest ever corruption scandal, in which millions of American dollars were funnelled into private bank accounts.

The Anti-Corruption Commission (ACC) testified on Tuesday before parliament’s public finance committee about the embezzlement scheme run through the state-owned Maldives Marketing and Public Relations Corporation, during which more than MVR1.4 billion (US$91 million) in money owed to the state as acquisition fees for tourism development leases was siphoned off into private bank accounts.

ACC’s new president, Muaviz Rasheed, told the committee that 38 bank employees colluded in the embezzlement, especially at the clearance stage when cheques issued to the state-owned marketing company were funnelled into private accounts. Muaviz said the number included junior staff and members of the management and the board of the Bank of Maldives, and that all of them were being investigated over their part in the scheme.

Muaviz noted that several cheques which were issued to be deposited into MMPRC bank accounts were diverted to other accounts without the required endorsements. The MMPRC board had passed a board resolution on its cheque endorsement policy, which was also shared with the bank. However, the bank did not follow the policy, Muaviz said.

“Only one person had signed to endorse these cheques. This violates the company’s [MMPRC] cheque endorsement policy,” Muaviz said.

Muaviz said most of the 38 employees were those dealing with the clearance of cheques.

“It is written in capital letters that the cheque is issued to [the] MMPRC. However, all of these cheques were being cashed by [the] SOF. [The] SOF did not get money from anywhere else. So, why didn’t BML [Bank of Maldives] investigate?,” Muaviz said.

SOF private limited was the vessel used to siphon off the public funds.

Muaviz said the bank alerted the central bank about the transactions, but it did so after depositing millions of dollars in public funds in private bank accounts.

“Then, after depositing the cheques the bank alerts [the] MMA. That is something being noted by [the] MMA as well,” he said.

Previously, the Bank of Maldives has denied any involvement in the scheme, saying it had fulfilled its part by notifying the Maldives Monetary Authority about the transactions.

The scheme was exposed in 2016 after a former Bank of Maldives branch manager leaked details of the transactions. Gasim Abdul Kareem was arrested and sentenced to eight months in jail for data theft and illegal disclosure.

In October 2018, the bank’s public relations department “leaked” an internal memo to the media, in which the bank sought to shift the blame onto the whistleblower. In the memo, the bank declared that it had met all lawful obligations, including alerting the MMA. The memo went on to say that the bank’s internal audit had not found “employee collusion of any kind”.

The memo criticised Gasim for not following the bank’s internal systems before blowing the whistle on the scheme, and reminded staff that they should observe strict confidentiality of customer account information.

However, in Tuesday’s committee hearing, the ACC informed the committee that the commission was questioning 38 bank employees for collusion. The ACC also noted that the MMA had finished its investigation and forwarded the case for prosecution, while the police investigation into the aspects of money laundering was ongoing.