The Constitutional Court has dismissed a case filed by Fabrice Rulinda, the Entebbe Mayor and PLU activist, over a $73,000 (about Shs 275 million) transaction that was reversed and his account frozen by Stanbic Bank.
On August 11, 2017, the money was deposited into Rulinda’s dollar account at Stanbic’s Bugolobi branch by Green Global Corporation, a company dealing in gold. Suspecting money laundering, the bank reversed the transaction, returned the funds to the sender, and blocked Rulinda’s account.
Rulinda, unhappy with the action, confronted the bank to demand an explanation. Bank officials explained that they had reported the matter to the Financial Intelligence Authority (FIA), which directed the account to be frozen until he clarified the source and purpose of the funds. Rulinda never provided an explanation.
Instead, Green Global acknowledged that the funds were part of a fraudulent scheme, prompting the bank to maintain the account freeze.
Rulinda sued the bank, claiming its actions were unlawful. His lawyers argued that banks are not authorized to reverse transactions without a court order and emphasized that Rulinda had been prosecuted but never convicted.
Stanbic Bank, through lawyers from Dentons, argued that the transaction was linked to illegal dealings involving gold and the M23 rebel group in the Democratic Republic of Congo.
Court documents revealed that Rulinda admitted to acting as a middleman in a deal involving M23 rebels, withdrawing the money from his account to pass it on, without questioning its source.
Justice Stephen Mubiru, who presided over the case, noted that Rulinda provided “multiple explanations” for the funds—including gold, oil, transport, and construction deals—all at once, raising serious red flags.
“Rulinda’s conduct, including choosing not to ask questions, amounted to wilful blindness,” Justice Mubiru said, adding that money laundering can be proven even without identifying the exact underlying crime.
The judge also pointed out unusual patterns in Rulinda’s bank records, including large deposits followed by quick withdrawals and personal spending on school fees and overseas shopping, indicating that the funds were likely derived from criminal activity.
On the central question of whether the bank acted lawfully, Justice Mubiru ruled in favor of Stanbic Bank, noting that banks have a duty to report and act on suspicious transactions.
“A bank cannot be obliged to act unlawfully,” he said, emphasizing that the bank had a reasonable suspicion and acted in accordance with legal obligations.
Ultimately, the court dismissed Rulinda’s claim and denied him any of the funds he had sought.
