Bank hit by ‘loans-for-pals’ scam

CHARGES that a former senior employee of Standard Bank Namibia’s Home Loans Division used her position to grant fictitious or irregular loans totalling over N$8 million to relatives and friends yesterday led to her provisionally being declared bankrupt by the High Court.

The personal estate of Lucy Camm, a former supervisor in Standard Bank Namibia’s Home Loans Division, was provisionally sequestrated by Judge Kato van Niekerk at the request of the bank. The provisional sequestration is at this stage set to last until June 26.During this period Camm will have the opportunity to try to convince the court why the court’s interim bankruptcy order should not be confirmed.Camm is accused of defrauding the bank over four years, the bank claims in an affidavit setting out the grounds for its application for the court to declare her bankrupt and use her assets in an effort to recover the losses that it claims to have suffered as a result of the alleged fraud.According to an internal forensic investigation carried out by bank officials between September 2004 January 2005, this fraud was committed when Camm exploited “major deficiencies” in the bank’s home loans processes and procedures, the bank’s Head of Operations, Richard Meeks, informs the court in an affidavit.After the discovery of the alleged fraud, Camm was charged at a disciplinary hearing and eventually dismissed.At the hearing, evidence was heard “that Ms Lucy Camm, as supervisor, was a senior official in the employ of the Bank and that she had operated virtually unsupervised and without being checked”, Meeks states in his affidavit.Camm had been employed with the bank since 1990, he notes.”She was very experienced and everybody trusted and relied upon her.This, coupled with certain control deficiencies in the Bank’s systems, created the opportunity for Ms Camm to perpetrate her crimes,” he claims.Fourteen suspicious accounts which are alleged to have been used to carry out the claimed fraud were identified during the bank’s investigation of the matter, Meek relates in his statement.Of these, four were genuine accounts, while 10 were fictitious, he claims.With the legitimate accounts, overdraft limits were extended to levels far in excess of the security that the bank held on those accounts, the bank’s investigation found.The fictitious accounts were under the names of allegedly non-existent people – whose surnames, however, were the same as those of friends or relatives of Camm – and the properties that they were supposed to be related to were either non-existent or registered to other bondholders, and these accounts were found to be substantially overdrawn to the maximum of their overdraft limits.In some instances, Camm left a paper trail that showed that she had been responsible for approving the accounts and ordering the transfer of large amounts of money into the accounts, Meeks states.In total, the report on the bank’s forensic examination shows, the overdrafts on the 14 accounts amounted to N$8,5 million.With only N$1,12 million of this amount properly secured in the four genuine accounts, the bank faces the possibility of losing N$7,423 million as a result of the allegedly illicit loans Camm is accused of having extended.Meeks claims that at Camm’s disciplinary hearing she admitted that two people in whose names the genuine accounts are, are friends of her.Others in whose names accounts are held, include two of her cousins and an uncle.Camm is reported to have told the bank’s investigators that the whole scheme started around 2002, when a friend, LM Strauss, approached her for financial assistance.Since the friend already had a home loan account with the bank, Camm decided to open a fictitious, unsecured home loan account in the friend’s surname, but with different initials.Whenever the friend needed money, she would contact Camm by telephone, and Camm would then arrange for funds to be transferred to the account in the fictitious name, the report on the bank’s investigation relates.To facilitate further withdrawals, Camm increased the overdraft limit on the fictitious account at regular intervals, whenever her friend needed more money, the report also states.A similar method was also used with the other people who had approached her for financial help.According to Meeks, LM Strauss’s debt to the bank now totals N$5,175 million, whereas the bank has mortgage bond security amounting to only N$201 350 against this.The bank’s investigators reported that Camm told them that all the people she helped get hold of money through the scheme would repay their debts to the bank.”Ms Camm vehemently denied that she benefited from the scam in any way and claimed she acted purely from a business perspective,” the report states.”She acknowledged that her actions were wrongful and that she abused her position in the Home Loans Department.”Meeks has dismissed her denial that she had personally benefited as “disingenuous”.”It is clear that she is not truthful in this regard,” he states.Apart from launching bankruptcy proceedings against Camm, the bank is also suing each of the friends and relatives who are claimed to have benefited, as well as Camm herself in each case, for the recovery of its money.It has also laid criminal charges against Camm with the Police.The complaint is still being investigated.The provisional sequestration is at this stage set to last until June 26.During this period Camm will have the opportunity to try to convince the court why the court’s interim bankruptcy order should not be confirmed.Camm is accused of defrauding the bank over four years, the bank claims in an affidavit setting out the grounds for its application for the court to declare her bankrupt and use her assets in an effort to recover the losses that it claims to have suffered as a result of the alleged fraud.According to an internal forensic investigation carried out by bank officials between September 2004 January 2005, this fraud was committed when Camm exploited “major deficiencies” in the bank’s home loans processes and procedures, the bank’s Head of Operations, Richard Meeks, informs the court in an affidavit.After the discovery of the alleged fraud, Camm was charged at a disciplinary hearing and eventually dismissed.At the hearing, evidence was heard “that Ms Lucy Camm, as supervisor, was a senior official in the employ of the Bank and that she had operated virtually unsupervised and without being checked”, Meeks states in his affidavit.Camm had been employed with the bank since 1990, he notes.”She was very experienced and everybody trusted and relied upon her.This, coupled with certain control deficiencies in the Bank’s systems, created the opportunity for Ms Camm to perpetrate her crimes,” he claims.Fourteen suspicious accounts which are alleged to have been used to carry out the claimed fraud were identified during the bank’s investigation of the matter, Meek relates in his statement.Of these, four were genuine accounts, while 10 were fictitious, he claims.With the legitimate accounts, overdraft limits were extended to levels far in excess of the security that the bank held on those accounts, the bank’s investigation found.The fictitious accounts were under the names of allegedly non-existent people – whose surnames, however, were the same as those of friends or relatives of Camm – and the properties that they were supposed to be related to were either non-existent or registered to other bondholders, and these accounts were found to be substantially overdrawn to the maximum of their overdraft limits.In some instances, Camm left a paper trail that showed that she had been responsible for approving the accounts and ordering the transfer of large amounts of money into the accounts, Meeks states.In total, the report on the bank’s forensic examination shows, the overdrafts on the 14 accounts amounted to N$8,5 million.With only N$1,12 million of this amount properly secured in the four genuine accounts, the bank faces the possibility of losing N$7,423 million as a result of the allegedly illicit loans Camm is accused of having extended.Meeks claims that at
Camm’s disciplinary hearing she admitted that two people in whose names the genuine accounts are, are friends of her.Others in whose names accounts are held, include two of her cousins and an uncle.Camm is reported to have told the bank’s investigators that the whole scheme started around 2002, when a friend, LM Strauss, approached her for financial assistance.Since the friend already had a home loan account with the bank, Camm decided to open a fictitious, unsecured home loan account in the friend’s surname, but with different initials.Whenever the friend needed money, she would contact Camm by telephone, and Camm would then arrange for funds to be transferred to the account in the fictitious name, the report on the bank’s investigation relates.To facilitate further withdrawals, Camm increased the overdraft limit on the fictitious account at regular intervals, whenever her friend needed more money, the report also states.A similar method was also used with the other people who had approached her for financial help.According to Meeks, LM Strauss’s debt to the bank now totals N$5,175 million, whereas the bank has mortgage bond security amounting to only N$201 350 against this.The bank’s investigators reported that Camm told them that all the people she helped get hold of money through the scheme would repay their debts to the bank.”Ms Camm vehemently denied that she benefited from the scam in any way and claimed she acted purely from a business perspective,” the report states.”She acknowledged that her actions were wrongful and that she abused her position in the Home Loans Department.”Meeks has dismissed her denial that she had personally benefited as “disingenuous”.”It is clear that she is not truthful in this regard,” he states.Apart from launching bankruptcy proceedings against Camm, the bank is also suing each of the friends and relatives who are claimed to have benefited, as well as Camm herself in each case, for the recovery of its money.It has also laid criminal charges against Camm with the Police.The complaint is still being investigated.