On August 11, 2017, Fabrice Rulinda, the Entebbe mayor and PLU activist, received $73,000 ( about Shs 275 million) in his dollar account the dollar account at Stanbic’s Bugolobi branch.
The money was deposited by a company called Green Global Corporation, which deals in gold.
Suspicious, Stanbic Bank reversed the transaction and sent the money back to the sender. It also blocked the account.
Rulinda was not happy and stormed the bank wanting to know why it had reversed the transaction without his permission.
The manager told him that they were suspicious about the transaction and did not want to aid money laundering.
Because of this, the bank reported the matter to the Financial Intelligence Authority (FIA), which directed it to freeze the account until Rulinda explained the source and purpose of the funds.
According to Stanbic Bank, they waited for Rulinda’s explanation, and it never came.
Instead, Green Global reached out to the bank and acknowledged that it had been sent as part of a fraudulent scheme.
Rulinda took the bank to court, arguing that its actions were unlawful.
His lawyers from Bluebell Legal Advocates told the court that “the law does not authorise banks to reverse transactions” and that only a court order could justify such action.
They also pointed out that he had been prosecuted but never convicted.
However, the bank, through its lawyers from Dentons, urged the court not to “sanction, condone or ignore blatant illegality.”
They argued that the entire transaction was tied to illegal dealings involving gold and the M23 rebel group in the Democratic Republic of Congo.
In a police statement, Rulinda admitted acting as a middleman in a deal involving gold buyers and M23 rebels. He said money was sent through his account so he could withdraw it and pass it on.
“I was not interested in knowing the source of funds,” he told investigators, according to the statement read in court.
In his ruling, Justice Stephen Mubiru, who presided over the case court, noted that Rulinda gave “multiple explanations” about the purpose of the money, including gold, oil, transport, and construction deals, all at once.
He said this raised serious red flags.
Justice Mubiru noted that Rulinda did not offer any explanation for the source of the funds and that his conduct, including choosing not to ask questions, amounted to “wilful blindness.”
He explained that money laundering can be proved even without identifying the exact crime behind the money.
Looking at Rulinda’s bank records, he noted unusual patterns. There were large deposits followed by quick withdrawals and spending on personal items, including school fees and shopping abroad.
“The funds were handled in a manner that strongly suggests they were derived from criminal conduct,” Justice Mubiru ruled.
He also pointed out Rulinda’s own words linking the transaction to M23 rebels, a group under international sanctions.
On the key question of whether the bank acted lawfully, Justice Mubiru sided with Stanbic.
He said banks have a duty to report and act on suspicious transactions. While they cannot freely take money from customers, they can refuse to process illegal transactions.
“A bank cannot be obliged to act unlawfully,” Justice Mubiru said.
He accepted that the bank had a reasonable suspicion and acted in line with its legal obligations.
In the end, the court found that Rulinda’s claim could not stand because it was based on an illegal transaction.
Justice Mubiru dismissed his claim and denied him any of the money he had sought.
