Man jailed for 13 years over investment fraud

A banking court has sentenced a former bank manager to a total of 13 years in prison in a fraud case. Riaz Hussain Shaikh, former manager of a private bank’s Baldia Town and Shershah branches, was found guilty of defrauding 11 customers of Rs21.425 million by inducing them to invest in the bank’s Term Deposit Receipts (TDRs) with promises of lucrative returns.

Presiding Officer Javed Ahmed Keerio of Special Court (Offences in Banks) observed that the prosecution succeeded in establishing its case against the accused with confide-inspiring testimonies of witnesses as well as circumstantial evidence and his own admission while obtaining bail.

Noting that the accused remained in jail for over one year after his arrest on November 15, 2021, the judge said he took efforts to pay back certain amount to the victims and two of the eight witnesses examined by this court admitted to have received the amount and requested his acquittal in the case.

“The accused also obtained bail to compensate the victims and he was granted bail conditionally during which he paid the victims, but his sincere efforts suggest that at least he has repented himself while realizing that he had defrauded people thus, was ready to pay their amount. This attitude and conduct of the accused made me take departure from severe punishment,” he observed.

Taking a lenient view, the judge sentenced the convict to three years in prison each for breach of trust by a banker as punishable under Section 409 of the Pakistan Penal Code, cheating and defrauding customers as punishable under Section 420, forgery for purpose of cheating as punishable under Section 468 and falsification of accounts punishable under Section 477-A. He was awarded one-year imprisonment for using as genuine a forged document as punishable under Section 471 of PPC. The convict was ordered to pay a Rs400,000 fine or undergo additional six mother imprisonment over non-payment.

“All the sentences are to run concurrently,” said the judge, extending the benefit of Section 382-B of the CrPC to the accused, which meant that the period he remained in jail since arrest will be considered towards his prison term.

According to Federal Investigation Agency prosecutor Muhammad Faisal Buriro, a complaint was filed against accused Riaz after an internal investigation by the private bank unearthed his involvement in a systematic fraud during his tenure as manager of the Shehrshah and Baldia branches from 2013 to 2016. The accused approached 11 customers of the bank with an offer to invest in the bank’s Term Deposit Receipts (TDRs), promising them highly lucrative returns.

However, instead of investing the customers’ funds, Riaz issued fraudulent TDRs using official bank letterheads and secured these documents with his own genuine signatures while forging the signatures of a required second signatory. As a result, he managed to embezzle a total of Rs21.425 million. The misappropriated funds were never recorded in the bank’s official accounts or ledgers, leading to a significant financial loss for both the customers and the bank.

The prosecutor contended that the accused abused his official position, committing a fraud, forgery, and criminal breach of trust. All witnesses, including the complainant, audit officer and six victims who were defrauded by the accused and deprived of millions of rupees, fully supported the prosecution case, he added. Two other witnesses, however, said that they would have no objection if the victim is acquitted.