Fresh alarm has struck Lotus Bank after the lender uncovered an alleged ₦1.5 billion internal fraud involving a staff member, igniting concerns over the safety of customer deposits and the robustness of the bank’s internal controls.
Court filings reveal that the bank is pursuing recovery of ₦1,552,130,998.85 allegedly siphoned through suspicious transactions traced to Abdulkarim Arome Mohammed, an official in the Financial Control Department.
The alleged fraud came to light following a comprehensive internal investigation spanning January 2023 to May 2024, which was later extended to February 2026 due to the scale of the irregularities.
According to an affidavit by Sunday Gbadebo, a fraud investigation officer at the bank, Mohammed reportedly exploited his system access to redirect customer-linked profits into unauthorized accounts at 22 financial institutions.
The scandal is particularly concerning for depositors because the diverted funds allegedly involved Mudarabah profit allocations—returns tied directly to customer deposits under the bank’s non-interest banking model.
“We discovered suspicious Mudarabah profits were paid into some customer accounts,” Lotus Bank stated in court documents, adding that a deeper review uncovered the alleged fraud connected to Mohammed.
Investigators also claim that some of the misappropriated funds were funneled into accounts linked to Mohammed’s wife, Khadijah Aliyu Shuaib, a FINCO officer advising on profit distribution. Other individuals named as beneficiaries include Peter Daniel and Emmas Ocheja Odogwu.
The case, which dates back to May 2024, continues to expand as additional defendants are added. The latest defendant was reportedly joined in February 2026.
Industry analysts warn the scandal could dent public confidence in the young bank, which launched commercial operations in 2021, particularly as Nigerian customers grow increasingly cautious about digital banking security and internal fraud.
The matter is before the Federal High Court in Lagos and has been adjourned until June 16, 2026. Lotus Bank’s media team did not respond to inquiries from The Witness as of press time.