One new generation bank and six financial technology (fintech) and microfinance banks have been accused of aiding fraudsters in defrauding Nigerians through fraudulent schemes.
This allegation was made by the Economic and Financial Crimes Commission (EFCC) while addressing the media in Abuja on Thursday.
The Director of Public Affairs of the EFCC, Mr Wilson Uwujaren, said these schemes involved about N18.7 billion fraudulent investment and airline discount scams.
He disclosed that in the airline discount fraud, fraudsters lure their victims to lose their hard-earned money by involving “a string of carefully devised airline discount information that any unsuspecting foreign traveller will fall for.”
“What they do is to advertise a discount system in the purchase of flight tickets of a particular foreign carrier. The payment module is designed in such a way that their victims would be convinced that the payment is actually made into the account of the airline. No sooner the payment is made than the passenger’s entire funds in his bank account are emptied,” he narrated to newsmen.
According to him, over 700 victims have fallen into the trap of fraudsters through the scheme with a total loss of N651.1 million to them.
Though the commission succeeded in recovering and returning N33.6 million to victims of the scam, Mr Uwujaren cautioned Nigerians to be more vigilant as foreign actors involved in the scheme are converting their illicit sleaze into cryptocurrency and moving them into safer destinations through Bybit.
Narrating the second scheme, the EFCC spokesman said it involved a company named Fred and Farid Investment Limited, simply called FF investment, which lured Nigerians into bogus investment arrangements.
He said over 200,000 victims have been defrauded in this regard, with about N18.1 billion raked in through nine companies offering diverse investment packages. .
In all, more than 900 Nigerians have been fleeced by fraudsters through the connivance of banks.
Mr Uwujaren claimed foreign nationals are behind the schemes, with three Nigerian accomplices who have been arrested and charged to court.
On the specific role of banks and fintechs in the schemes, two other directors of the EFCC, Abdulkarim Chukkol in charge of Investigations, and Mr Michael Wetcas in charge of Abuja Zonal Directorate, explained that, “a new generation bank and six fintechs and microfinance banks are involved in this. The financial institutions clearly compromised banking procedures and allowed the fraudsters to safely change their proceeds into digital assets and move into safe destinations”
“A total of N18,739, 999,027.35 had been moved through our financial system without due diligence of customers by the banks. It is worrisome that investigations by the commission showed that cryptocurrency transactions to the tune of N162 billion passed through a new generation bank without any due diligence. Investigations also showed that a single customer maintained 960 accounts in the new generation bank and all the accounts were used for fraudulent purposes.”
The EFCC called on regulatory bodies to bring financial institutions to compulsory compliance with regulations in the areas of Know Your Customers (KYC), Customer Due Diligence (CDD), Suspicious Transaction Reports (STRs) and others.
The agency charged regulatory bodies that Deposit Money Banks (DMBs), fintechs, MFBanks found to be aiding and abetting fraudsters should be suspended and referred to the EFCC for thorough investigation and possible prosecution.
It also warned that negligence and failure to monitor suspicious and structured transactions by banks would no longer be allowed, assuring that it will continue its work against money laundering by fraudulent actors.
Mr Uwujaren also tasked financial institutions to firm up their operational dynamics and save the nation from leakages and compromises bleeding the economy.