Cashgate style fraud hits MZUNI

A Mzuzu University (Mzuni) student is alleged to have masterminded a Cashgate style heist at the institution; defrauding it of K6 million ($10,055.6) by creating “ghost” students who were receiving government-funded upkeep allowances.

Police said on Wednesday that the alleged kingpin—identified by the law enforcers as Dumisani Kaunga who is currently in police custody—beat the university’s system to register non-existent beneficiaries of upkeep allowances.

Police arrested Kaunga after they examined handwritings of all students at Mzuni and compared them with the handwriting on documents, including bank documents used in the suspected fraud.

Mzuzu Police spokesperson Martin Bwanali on Wednesday confirmed the arrest of the student who they said comes from Mwabubira Village, Traditional Authority (T/A) Chikulamayembe in Rumphi District.

He is a fourth-year biomedical science student.

Kaunga is alleged to have created 12 registration numbers for students that never existed so that they could be entitled to upkeep allowances given at the university.

According to police, Kaunga also opened bank accounts for the ghost students.

The accounts were opened with Standard Bank, NBS Bank and Malawi Savings Bank in Mzuzu, Mzimba and Karonga, according to the spokesperson.

The student is said to have beaten the bank systems by making various identity (ID) cards bearing his face, but with different registration numbers.

However, Mzuni later discovered that the students never existed on campus and reported the matter to police, according to Bwanali.

He said: “We started investigating the matter [in August last year] and engaged the forensic document examiner at Area 30. After going through all the forms, it was discovered that the handwriting on the bank forms and the form that he used when registering himself looked the same.”

Kaunga has since been charged with theft and altering false documents.

The fraud has exposed loopholes in the university’s registration system as well as the commercial banks’ account opening procedures in the face of know your customer (KYC) requirement.

The scam has shocked Bankers Association of Malawi (BAM) president Misheck Esau who said there could have been a system breakdown on the part of the banks and the university.

He wondered how Mzuni could incorporate 12 students into the system when they never existed.

Esau also said the banks could have done better by thoroughly checking the alleged student before letting him open the accounts.

However, Esau, who is managing director and chief executive officer of CDH Investment Bank, said tricksters are clever people as they study weaknesses in systems and take advantage of the same.

He said: “I just have to call on the banks and other institutions to be on guard to avoid such incidents.”

Mzuni vice-chancellor Robert Ridley asked for a questionnaire to respond on the matter, saying it was a sensitive issue.

However, after sending the questionnaire through his official e-mail, he refused to comment on the matter.

“Further to your telephone call, please note that as this is a police case, I cannot comment,” responded Ridley through a mobile phone text message.

This is the second time this year a university student has masterminded defrauding of their institutions.

In March, a Catholic University of Malawi student sucked out about K15 million from the Chiradzulu-based institution using forged and stamped bank deposit slips that purportedly showed that students had paid fees. n