Ethiopian Court Allows Criminal Charges in $6M African Union Fraud Case

The Federal First Instance Court in Addis Ababa has granted permission to federal prosecutors to initiate criminal charges against Clergyman Belay Mekonnen, deputy general manager at the Ethiopian Orthodox Tewahdo Church (EOTC) Patriarchate, and two others, Yared Fisseha and Dhaba Genana. The charges stem from their alleged involvement in a failed attempt to fraudulently withdraw over $6 million from the African Union (AU) bank account at the Commercial Bank of Ethiopia (CBE).

Why this matters: This case highlights the vulnerability of international organizations to fraud and corruption, and the need for robust security measures to protect their finances. The outcome of this case could set a precedent for future fraud cases involving international organizations and have implications for the fight against corruption in Ethiopia and the African Union.

On April 15, 2024, a series of Payment Transfer Orders were submitted to the CBE, attempting to transfer substantial funds to various recipients under the premise of construction and water drilling works. The AU issued an official statement admitting to the fraudulent attempt, which was thwarted due to "the vigilance and swift action of the CBE staff and our finance department."

During a hearing on April 24, the investigating police accused the three suspects of alleged involvement in a "coordinated and organized criminal act." The court allowed the police eight more days to remand and investigate the suspects and adjourned the hearing until today. The Federal Police announced that the investigations have been completed, and the case files have been transferred to federal prosecutors at the Ministry of Justice's Directorate of Corruption Affairs.

Prosecutors requested and were granted 15 days to initiate the formal criminal procedure against the accused. If convicted, the suspects could face up to 10 years in prison, according to the prosecutors. However, defense lawyers objected to the additional time, arguing that an investigation had already been carried out by the police. They also contested the estimated prison time in the absence of formal charges.

Additionally, the defense team argued against initiating a corruption procedure, citing that the fraudulent document was submitted to a foreign company's bank account, which cannot be treated under Ethiopia's anti-corruption proclamation. Despite these objections, the court declined the request for bail and ordered the suspects to remain in custody while allowing prosecutors the requested 15 days to press charges.

The AU praised the swift response and vigilance of the CBE staff and their own finance department in successfully thwarting the fraudulent attempt. The organization acknowledged the seriousness of the incident and the insights gained into potential vulnerabilities. Consequently, a comprehensive review of security measures is underway, with plans to collaborate closely with the CBE to enhance protocols and prevent future fraudulent attempts against the AU's finances.

The AU reiterated its commitment to maintaining the highest standards of financial governance and ethics, both internally and in partnership with financial service providers. They expressed appreciation to the leadership of the CBE and the Government of the Federal Democratic Republic of Ethiopia for their swift intervention and support during this challenging situation.

The outcome of this case could have significant implications for the fight against corruption and financial fraud in Ethiopia and the African Union as a whole. The AU remains committed to upholding the highest standards of financial governance and ethics internally and with all financial services providers as they continue to support the development and integration of the continent.

Key Takeaways

• Federal court allows charges against 3 suspects, including a clergyman, for attempted $6M fraud against African Union.
• Suspects allegedly submitted fake payment orders to Commercial Bank of Ethiopia to withdraw AU funds.
• AU praises bank staff and finance department for thwarting the fraud attempt, launches review of security measures.
• If convicted, suspects face up to 10 years in prison; defense lawyers object to additional investigation time.
• Case outcome may set precedent for future fraud cases involving international organizations in Ethiopia and AU.