In fraud investigations, perception is not enough. You need precision. If your report can not stand cross-examination in court or scrutiny by an aggressive opposing counsel, you have wasted time and set your organization up for failure.
Let me show you how to write a fraud report that survives not just audits but adversaries. From the cover letter to the annexes, every line must communicate clarity, integrity, and mastery. No sampling. No opinions. No hearsay. Just facts, plain facts. If you do not have evidence to support it, do not write it down.
Cover letter
Set the tone. Define the facts. Shield the process.
____________________________________
Date: 3rd April 2025
To: The Managing Director
XYZ Microfinance Uganda Ltd
Plot 14, Jinja Road, Kampala
Subject: Submission of Final Fraud Investigation Report – Irregular Loan Disbursements
Dear Sir,
We write to formally submit the final fraud investigation report into irregular loan disbursements within your Credit Department, following your instruction dated 6th February 2025. This investigation was conducted independently and professionally in line with our mandate. All evidence collected was corroborated using documents, interviews, and digital logs.
The report highlights a clear pattern of manipulation of loan records, unauthorized account creations, and internal collusion between Credit Officers X, Y, and B and third-party agents Jane Doe. The total financial exposure identified stands at UGX 178,240,000, as detailed in Section 5.2 of the report. We confirm that this report is supported by primary evidence annexed herewith and has been prepared to stand the test of legal and forensic scrutiny.
We appreciate the opportunity to support XYZ Microfinance in securing its systems and culture. Please reach out for any clarification or expert witness services during disciplinary or criminal proceedings.
Sincerely,
James XP, CFE, Lead Investigator
Institute of Forensics & ICT Security
The report itself
Precision over persuasion
Title:
Final Forensic Fraud Investigation Report
Loan Disbursement Scheme XYZ Microfinance Uganda Ltd
Report Ref: SUMMIT/FRD/004/2025
1.0 Executive summary
This report presents findings from a fraud investigation commissioned on 6th February 2025. The inquiry focused on anomalies in group loans processed between September 2024 and January 2025 across four branches: Kawempe, Soroti, Mbale, and Lira.
Our findings confirm collusion between internal Credit Officers and external agents to fabricate group membership, approve loans without due diligence, and divert disbursed funds.
Total exposure is UGX 178,240,000. Disciplinary action and criminal referrals are recommended.
2.0 Mandate and scope
2.1 Terms of reference
We were engaged to investigate:
(i) Irregularities in group loan applications and approvals
(ii) Potential internal collusion with agents
(iii) Financial exposure and control gaps
2.2 Period under review
1st September 2024 to 31st January 2025
2.3 Departments and branches reviewed
Kawempe, Soroti, Mbale, Lira Credit and Operations departments
3.0 Methodology
(i) Reviewed 132 loan files
(ii) Conducted 17 structured interviews with Credit Officers, branch managers, and clients
(iii) Performed forensic analysis of T24 logs and signature comparisons
(iv) Verified 37 clients physically, including household visits in Soroti and Lira
4.0 Summary of Findings
4.1 False group memberships
(i) 46 group loans were approved for clients with no traceable addresses
(ii) IDs used were photocopied from previous loan files, evidence of document recycling
4.2 Collusion
(i) WhatsApp conversations (annexed) between Credit Officer Isaac W. and agent “Baba T.” confirm revenue sharing 30% kickback on each disbursed loan
(ii) Audio recording (dated 14 Jan 2025) where Isaac explains how loan balances were rescheduled to disguise defaults
4.3 Systems override
(i) Credit Committee signatures were cloned from prior meetings
(ii) Disbursements were made outside working hours, in breach of internal policy
5.0 Financial Exposure
5.1 Value of fraudulent loans
(i) A total of 46 group loans
(ii) Average loan per group: UGX 3.88M
(iii) Total exposure: UGX 178,240,000
5.2 Recovery status
Only UGX 23,000,000 recovered to date. The rest is outstanding and likely unrecoverable.
6.0 Conclusion
The fraud was perpetrated through internal collusion, poor supervision, and deliberate circumvention of policy. Management failed to follow up on red flags, especially repeated use of the same guarantors across unrelated groups.
7.0 Recommendations
(i) Immediate disciplinary hearings for identified staff
(ii) Termination and police referral for Isaac W. and Lydia K.
(iii) System audit to plug override loopholes
(iv) Enhanced verification using biometric tools at onboarding
Annexes
- List of suspicious loans
B. Interview transcripts
C. WhatsApp chat printouts
D. Signature analysis table
E. Client visitation logs
F. Management policies violated
_________________________
If your investigation report is vague, you have just written a rumour. If it is overly technical, you have written it for machines. If it is dramatic, you have written it for newspapers.
But if it is factual, clear, defensible, and precise, you have written it for court and justice.
That is the report I deliver. Every time.
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The IFIS Team
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