Tag: fraud

Maleesha Hajj Group owner arrested in Srilanka

Police have located and arrested the owner of the Maleesha Hajj Group Ismail Abul Latheef, who was sought by the police through Interpol after he fraudulently collected money from many Maldivians seeking ti perform Hajj this year.

Police have not provided details of the case but local media reported that Latheef was arrested while he was at the Mount Lavinia Hotel in Colombo.

Sri Lankan police told Haveeru that Abdul Latheef was suspected of being involved in a Sri Lankan money laundering ring, and that he was suspected of collecting money from Sri Lankans as well.

Local newspapers reported that Latheef has been brought to Male’ and taken to the Criminal Court, where the court granted police a five day extension of  detention period.

The Maleesha Hajj Group was set up by Latheef and had an office in Male’. Maldivians who wished to perform the Hajj usually opt to go through Hajj groups rather than going alone, and are guided through the pilgrimage to Saudi Arabia.

Police issued a notice for the arrest of the 42 year-old in late September after it was alleged that he had defrauded 175 people of MVR 12 million (US$778,000), after they made payments to the Maleesha Hajj Group to travel to Mecca to perform Hajj.

On October 2, Interpol issued a red notice to locate and apprehend Latheef.

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Allegedly fraudulent head of Maleesha Hajj Group in Malaysia, reveal police

Superintendent of Police Mohamed Riyaz has told parliament’s Government Oversight Committee that police have received reports that the Head of Maleesha Hajj Group, Ismail Abdul Latheef is in Malaysia.

Police began searching for 42 year-old in late September after it was alleged that he had defrauded 175 people of MVR 12 million (US$778,000) after they made payments to the Maleesha Hajj Group to travel to Mecca to perform Hajj.

Riyaz said police were trying to verify the information concerning Latheef’s whereabouts.

Officials from the Ministry of Islamic Affairs and police were summoned by parliament’s Government Oversight Committee to determine the progress they had made in locating Latheef, and the missing money.

Latheef was reported to police after people who had made the Hajj payment realised that the group’s office had been closed for days without any response.

On October 2, Interpol issued a red notice to locate and apprehend Latheef.

Attending the Hajj is one of the five pillars of Islam. Clients of the company were not able to go to Mecca this year to perform the religious obligation.

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High Court orders man who swindled Swiss woman to pay back MVR 5.4 million

The High Court has dismissed an appeal and ordered a Maldivian national to pay back MVR 5.4 million (US$350,000) he took from a Swiss woman after promising to marry her.

In June, the Civil Court ordered a man identified by the court as Ibrahim Ali to pay the Swiss woman the money after he was found guilty of swindling it from her.

The Swiss woman alleged that Ibrahim had taken money from her on several occasions in large sums, and had promised that he would marry her.

She also told the court that Ibrahim had told her that he was single, but that she had later found out that he was married and had children.

The Civil Court ruling ordered Ibrahim to pay back US$58,800, 7,000 euros and 252,196.95 Swiss francs he had taken from The Swiss woman since 2007.

The court also ordered Ibrahim to pay back a sum of MVR 1,500 (US$ 97.27) in legal fees and 2,420 Swiss Francs in bank transfer charges.

Ibrahim however appealed the Civil Court’s verdict at the High Court.

In the appeal, Ibrahim argued that the Civil Court had failed to establish that the sum of money had to be paid back, or that the money he received was by his request.

He also contended that the Civil Court had failed to prove that the money was deposited in return for his agreement to marry the Swiss woman, and argued that there was no legal basis for the court to order him to reimburse the plaintiff.

However, the High Court in its ruling on Sunday upheld the Civil Court’s decision and stated that documents presented to the court clearly implied that there were money transfers taking place since 2007.

The ruling further stated that the Swiss woman had said in court that she had sent the money because Ibrahim had told her that he was unmarried.

In its ruling the High Court stated that Ibrahim had build a house from the money he had fraudulently collected, which was also built  on the understanding that he would marry the Swiss woman.

Ibrahim was not present at the hearings, and the three-judge panel issued the verdict in absentia.

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Auditor General accuses senior officials of negligence in embezzlement of MVR 24 million from DMC

The Auditor General’s Office has accused senior government officials of negligence in the alleged embezzlement of MVR 24 million (US$1.6 million) through the Disaster Management Center (DMC) in 2009 and 2010.

In a presentation to parliament’s Finance Committee on Wednesday, Director General Ibrahim Aimon reportedly revealed that the Auditor General’s Office suspected former State Minister Abdulla Shahid, who was in charge of the DMC at the time, along with DMC Director General Mohamed Shahid and Deputy Director General Moosa Ali Kaleyfan as well as former State Minister for Finance Ahmed Assad and Finance Controller Ahmed Mohamed, were culpable in the scam or guilty of gross negligence.

Auditor General Niyaz Ibrahim told members of the Finance Committee that the negligence of the DMC and Finance Ministry in the embezzlement of funds was “very serious.”

Minivan News is seeking comment from the accused senior officials.

ABCs

On October 11, the Auditor General’s Office made public a special audit report (Dhivehi) of an investigation into misappropriation of MVR 24 million from the DMC, uncovered in the centre’s 2010 audit.

In the 2010 audit of the DMC, auditors discovered that payments were made for “hundreds of invoices from 2005”. As the DMC refused to comply with a request for all documentation relating to the transactions, the report noted that the files were eventually obtained from the Finance Ministry.

In 2005, the report explained, the DMC bought construction material for tsunami-related reconstruction from local businesses with “credit purchase order forms.”

The Finance Ministry paid the bills for credit purchases from the “tsunami recovery fund (TFR).”

A company named Allocate Business Company (ABC) was issued “a large number of purchase orders in 2005,” the report found, noting that the company was about a year-old and was not an importer or seller of construction material.

“Therefore invoices for all the purchase order forms released to ABC were submitted under the names of ‘Apollo Hardware Store’ and ‘Apollo Holdings Pvt Ltd,” the report stated, adding that the payments were made to Apollo in 2005 for the ABC purchase order forms.

The invoices submitted by Apollo Hardware and Apollo Holdings included references to the purchase order forms released to ABC, the report noted.

“Therefore it is believed that these two companies are strongly linked,” the report stated.

The scam

Meanwhile, in 2009 and 2010, ABC submitted over 700 new invoices to seek payments from the state with photocopies of the original purchase orders taken from the Apollo invoices.

The audit found that MVR 24,008,503.75 was paid out for 571 of the invoices.

The Finance Ministry prepared payment vouchers for the DMC and made the payments in four cheques between August 2009 and April 2010.

The fourth and final payment of MVR 13 million (US$843,060) was issued on April 27, 2010 for 193 fraudulent invoices.

While over 700 invoices were sent over by the DMC, the report noted that the Finance Ministry rejected 140 invoices worth over MVR 10 million (US$648,508) after the public accounting system showed that payments had already been made.

“Therefore, this showed that ABC attempted to obtain funds using invoices for which payments had been made [to the company],” the report noted.

“From one perspective, ABC was offered the opportunity to embezzle funds so openly because the company knew of the faulty arrangement between the Disaster Management Centre and and Ministry of Finance for issuing funds and took advantage of it. Or [it is because] the scam was carried out with the collaboration of senior officials of the Disaster Management Centre and Ministry of Finance and Treasury.”

Negligence or involvement of senior officials

The report added that the issuing of funds for forged invoices accepted by the public accounting system “raises serious questions regarding the integrity and capability of those entrusted with spending public funds.”

Moreover, the case demonstrated “extreme irresponsibility” on the part of the public officials, the report stated.

Among the reasons listed for suspecting either involvement or gross negligence of senior government officials, the report noted that as a rule public funds were released only for original documents, whereas the invoices in the DMC case contained photocopies of purchase order forms.

The Auditor General’s Office therefore believed that “this was done deliberately and with a plan rather than out of ignorance or because of mistakes.”

The report also noted that it was highly unlikely that either the state would have held payments owed to a private company without any reason or that the company would have waited four or five years to demand payment with no record of complaint or a court case.

The audit further discovered that officials from the DMC met with the state minister for finance regarding the payments to ABC, “however neither minutes nor any documentation of the discussion was maintained for any of these meetings.”

Moreover, the audit found that the Finance Ministry had rejected some invoices forwarded by the DMC that lacked purchase order forms. However, the audit investigation found that a Director General at the DMC instructed an employee to photocopy purchase order forms and attach the bill to the invoices, which were then sent again to the Finance Ministry.

In conclusion, the Auditor General recommended further investigations by the Anti-Corruption Commission (ACC) and Maldives Police Service (MPS) for prosecuting the directors of ABC Pvt Ltd as well as the culpable government officials.

According to local media reports, police have since arrested two individuals in connection with the ongoing investigation into the DMC scam. Police have however not revealed the identity of the suspects in custody.

At a press briefing on Thursday, parliament’s Finance Committee Chair MP Ahmed Nazim said that the committee has decided to summon Prosecutor General Ahmed Muiz and members of the ACC along with Finance Minister Abdulla Jihad and Finance Controller Ahmed Mohamed next week to discuss measures to prevent corruption and misappropriation of public funds.

Finance Controller Ahmed Mohamed is among the officials named by the Auditor General’s Office at the Finance Committee meeting last week.

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Police commence search for suspect in Hajj pilgrimage payment “fraud”

The Maldives Police Service has commenced a search for a 42-year old Hulhumale’-based businessman wanted for questioning on suspicion of fraudulently collecting funds from Hajj pilgrims.

According to local media, Ismail Abdul Latheef, head of the Maleesha Hajj and Umra Group is under investigation by police for alleged fraud concerning payments received by his company for this year’s Hajj Pilgrimage.

Police have said that attempts are ongoing to locate and question Latheef, who is suspected of having fled the country, the Sun Online news service has reported.

Authorities have claimed that 52 complaints have so far been received over alleged payments made to the Maleesha Hajj and Umra Group.

Police Spokesperson Sub-Inspector Hassan Haneef was not responding to calls at the time of press.

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PG’s Office to send Nazim fraud cases to the High Court

The Prosecutor General’s (PG) Office has appealed cases concerning the alleged involvement of Deputy Speaker Ahmed Nazim in defrauding the Atolls Development Ministry to the High Court, reports Haveeru.

The case, which was dismissed by the Criminal Court in February, involves a 2004 deal to purchase harbour lights worth Rf1.95 million (US$126,000) on behalf of the now defunct ministry.

The PG’s office has told Haveeru that it intends to appeal a further four cases previously brought against Nazim.

The judge at the time of the dismissals concluded that Nazim’s “acts were not enough to criminalise” him legally.

If Nazim had been found guilty, he would have been ordered to pay a total sum of Rf5,315,618 (US$345,170) paid by the state for the projects and sentenced to between one to six years imprisonment.

Under provision 131 of the penal code, an extra month will be added to the jail sentence for every additional Rf1,000 (US$65)  if the fraudulent transaction exceeds Rf100,000 (US$6,493) .

In an interview with local media outlet Sun following the rulings, Nazim claimed the four cases were baseless and had been leveled at him by former President Mohamed Nasheed’s administration, using false evidence.

“Today we are guaranteed of the existence of an independent and trustworthy judiciary. Former President Nasheed and the MDP will now believe we have an independent judiciary, because they know that the four cases were schemed with manufactured evidence. These are are absolutely untrue and baseless cases,” he said.

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Interpol Red Notice issued for F-Tech fraud case suspect

Interpol has issued a red notice for Mohamed Abdullah, wanted by Maldives Police in connection to the charges of defrauding the health ministry out of Rf 11.8 million (US$761, 290).

The 41 year-old was identified as the Managing Director of F-Tech Solutions, the company which allegedly doctored invoices and delivery notes and forged signatures to collect payment on medical supplies that have not been received by the health ministry to this day.

According to the Interpol website, Abullah is wanted for “Fraud, Counterfeiting/forgery”.

Auditor General Ibrahim Niyaz requested police investigate the fraud charges on April 12, following a special audit into the medical supply procurement agreement signed with F-Tech solutions in 2010.

Under the agreement, F-Tech Solutions was supposed to supply medical consumables and laboratory equipment worth Rf 12.8 million (US$831,169) but the audit revealed that the company had only supplied Rf 930, 512 (US$60,033) worth of goods.

Meanwhile, auditors found that the company forged signatures on delivery notes and invoices claiming goods had been supplied to the health ministry. Even on the instances goods were delivered, the prices listed for goods were much higher than those pledged in the contract.

“This office notes that F- Tech Solutions forged signatures on some delivery notes and invoices. Furthermore, the health ministry, hospitals and health centres have not received any of the goods said to have been delivered on the delivery notes. While the health ministry’s supply department has received goods noted on one invoice, the prices noted on the invoice are extraordinarily higher than prices pledged in the contract document,” the report said.

According to the Auditor General, tender evaluation board awarded the contract to F- Tech Solutions even though the company had no prior experience in supplying medical equipment, had lied about previously supplying medical equipment to the health ministry in bidding documents, and had no import licenses or permits from the Maldives Food and Drug Authority to distribute medical supplies.

The contract was also signed against the  advice of Anti Corruption Commission’s (ACC), which at the time had raised concerns over F-Tech’s lack of necessary licenses and permits.

The tender evaluation board awarded the contract to F- Tech Solutions even though the company had no prior experience in supplying medical equipment, had lied about previously supplying medical equipment to the health ministry in bidding documents, and had no import licenses or permits from the Maldives Food and Drug Authority to distribute medical supplies, the report noted.

According to the report, the State Minister of Finance at the time opened a Local Letter of Credit facility (LC) worth the total contract amount for F-Tech Solutions at the State Bank of India (SBI). The Auditor General said the move contravened the Maldives Finance Act which states only 15 percent of total contract value can be paid out in advance.

Further, although the contract was made between F-Tech and the health ministry, the state minister for finance authorised finance ministry staff instead of health ministry staff to sign delivery notes, the report said.

Niyaz said the state minister’s decision to establish a LC facility “opened up the opportunity” for payments to be made for unsupplied goods and “weakened the state’s internal control mechanisms.”

A Deputy Director General at the Ministry of Finance and Treasury authorised payment to F-Tech without confirming receipt of goods with the health ministry, even though SBI had noted discrepancies between the invoices and delivery notes. Nine of the 21 invoices were issued a month before the date printed on delivery notes, the report said.

Moreover, the Health Ministry did not annul the contract with F- Tech Solutions as per the agreement even though the company had failed to supply medical equipment for the period October – December 2011.

Instead, the ministry had procured the consumables itself and told F- Tech the amount would be deducted from the total payment to the company. However, no such deduction took place.

Niyaz recommends filing fraud charges against F- Tech Solutions, and filing negligence charges against the Tender Evaluation Board, and relevant Health Ministry and Finance Ministry officials. The report does not name the accused.

However, according to local media, F–Tech has six directors: MD Mohamed Abdulla, Director of Operations Abdulla Rashid; Director of Administrations Abdulla Shafeeg; Director of Sales and Marketing Ahuyad Hisaan; Director of Logistics Rilwan Shareef and Director of Human Resources Fathimath Shiuna.

Of the six, Shareef and Shiuna are prominent activists of the former ruling Maldivian Democratic Party (MDP) activists.

Police Sub-Inpector Hassan Haneef today confirmed that an Interpol notice was issued for Abdullah after attempts made by local police to find him were unsuccessful.

When asked if any one has been arrested in relation to the case Haneef responded:  “We have questioned some people regarding this case. But no arrests have been made so far.”

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Police conclude investigation into Rf 18 million Sheesha fraud case

Police have completed the investigation into a case involving Rf18 million (US$1.2 million) that went missing from a State Bank of India (SBI) account of three brothers who own local motorcycle retailer, Sheesha.

The incident occurred in November 2011. The Criminal Court issued an Interpol red notice to apprehend three persons suspected to be involved in the case.

The names sent to the Prosecutor General were Ibrahim Shahid, 42 of Thulhadhoo in Baa Atoll, Mohamed Mustafa, 35 of Lhaimagu in Shaviyani Atoll and Mohamed Muthausim, 32 of the same island and Mohamed Rasheed Abdul Gadhir.

Police said the names of four other persons indirectly related to the case were also sent to the Prosecutor General.

Ibrahim Shahid of Baa Atoll Thulaadhoo, accused of stealing Rf18 million (US$1.1 million) from the State Bank of India (SBI) account was apprehended in Sri Lanka in February this year.

On November 24, 2011 the account owners discovered that several unauthorised transfers had been made from their joint personal savings account to an unidentified recipient, the first transaction being made on November 9.

Following the discovery the Sheesha brothers Ahmed Hassan Manik, Hussain Husham and Ibrahim Husham said the transfer had been made to a Bank of Maldives account with a forged document using Manik’s name. The brothers said they would sue SBI and requested the bank take full responsibility for the theft.

In November Hussain Husham told the media that the total amount of Rf 18 million was  in two transactions, with the first transaction made on November 9 with the withdrawal of Rf 8.5 million (US$551,000).

Later on December 20, the culprits withdrew a further Rf 9.5 million (US$616,000) from their account.

Hussain told the press at the time that SBI transferred the money to an account with the Bank of Maldives, using a forged document faxed to SBI.

He said the document had the name and signature of Ahmed Hassan Manik, and that the money transferred to Bank of Maldives account had already been withdrawn when they came to know about it.

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Police to crack down on tour agents scamming tourists

Police have announced plans to crack down on tour operators who are allegedly scamming tourists visiting Maldives, after several complaints were filed by tourists who have been targeted in these scams.

The reports of the tourist scams will be unwelcome for an industry which is already struggling to remain on top of its niche market of small island tourism as it faces fluctuating arrival rates, a decline in traditional markets, potential tax increments and a deteriorating image as political instability grows.

According to the police, some tour operators are defrauding tourists by charging large amounts of money in advance to pay for reservations, without actually making the payments to the resort.

“A lot of problems are created when the tourists arrive in Maldives after making the payments to the travel agencies and discover [the agencies] have not paid the resorts,” Deputy Head of Crime Specialist Command Mohamed Riyaz told press on Saturday.

Although the reported cases are uncommon and several were successively resolved, Riyaz noted that the police have started investigations into the tourist rip-offs as they are being “repeated”.

Police are taking administrative action against four agencies suspected of defrauding tourists, while investigations are pending in six “serious” cases, according to the Deputy Head of Crime Specialist Command.

He added: “The licence of agencies not paying advance money to the resorts will be terminated and their bank accounts will be frozen under the criminal investigation.”

The police have also requested tour operators to refrain from such scams that have the potential to “deeply harm” the tourism industry of Maldives, which contributes almost 80 percent to the national income.

“Operated from bedrooms”

Speaking to Minivan News, the Maldives Association of Travel Agents and Tour Operators (MATATO) and Maldives Association of Tourism Industries (MATI) – associations which represent tour operators and resort owners, respectively – revealed that the roots of the scam runs deeper.

MATATO’s President Mohamed Khaleel contended that there are “no legal restrictions to the fraudsters who want to run these scams”.

“Anyone can go to the Economic Ministry and set up a company. Get a travel agent licence, set up a website and start bringing tourists. Over the past two years, we have raised several concerns in various platforms about these paper companies defrauding the tourists and resorts,” Khaleel explained.

Police yesterday confirmed that the tour operators suspected to be complicit in the tourist rip-offs were registered, liscenced and had their own online booking service. However, the police did not reveal the identity of the companies as the investigation is pending.

However, MATATO’s President claims that out of nearly 500 registered and licensed tour operators and agents, only 50-70 are  professional agents “committed” to the industry.

“Others don’t even have offices, they just put a name board on the street and operate from bedrooms. No commitments. They take money from tourists, close it down and go open another agency again,” he added.

MATI’s Secretary General Mohamed Ibrahim Sim echoed similar concerns, recalling several instances where resorts have faced difficulties in collecting payments: “Some tour operators with outstanding payments have declared bankruptcy and disappeared. We have not even been able to trace some of them back.”

Both Sim and Khaleel emphasised the establishment of legal frameworks to provide legal protections to the industry and to prevent “a few fraudsters from tainting the image of whole tourism sector”.

“The solution lies in establishing better legal frameworks where the tour operator, resort operator and the customer is protected,” Sim argued.

“We have to enforce these laws and regulations. Beacause of the new innovations in the sector, the dealings between the resort and the tour operators are changing very quickly. We need to keep up with them in terms of an updated legal framework, where laws and regulations are revised and revamped consistently as the technology changes everyday. If we do not keep up with it, we are going to face these problems.” he further noted.

Meanwhile, MATATO’s President Khaleel observed that they are working on a draft of Local Travel Agent Regulation and Code of Conduct to gap the loopholes in the system and facilitate in protecting the industry. However, it is yet to be approved from the ministry and necessary laws need to be amended as well, according to Khaleel.

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