Banks, Fintechs aiding N18.7bn fraudulent schemes - EFCC alleges
The Economic and Financial Crimes Commission (EFCC) has leveled serious allegations against the Nigerian banking sector, accusing one new generation bank and six Fintechs of actively aiding fraudsters in schemes that have fleeced Nigerians of over N18.7 billion.
The anti-graft agency raised the alarm on Thursday in Abuja, citing a disturbing level of compromise and negligence within the financial system that allowed criminals to operate unchecked.
Speaking to the media, the Director of Public Affairs, CE Wilson Uwujaren, revealed that the identified financial institutions failed to uphold basic regulatory standards, thereby providing the infrastructure for foreign and local actors to defraud over 200,000 victims.
In a shocking revelation regarding the depth of the negligence, the EFCC disclosed that investigations uncovered a single customer maintaining 960 different accounts within a new generation bank. All the accounts were reportedly used to funnel proceeds of crime.
Further highlighting the complicity of these institutions, EFCC Directors Abdulkarim Chukkol (Investigations) and Michael Wetcas (Abuja Zonal Directorate) noted that the banks permitted the movement of N162 billion in cryptocurrency transactions without conducting necessary due diligence. This lack of oversight allowed fraudsters to swiftly convert stolen naira into digital assets and transfer them to safe havens via platforms like Bybit.
The Commission detailed two primary schemes facilitated by this banking negligence. The first, an airline discount fraud, targeted travelers with fake ticket offers for a foreign carrier.
This scheme alone defrauded over 700 victims of N651 million. The fraudsters designed payment portals that mimicked official airline accounts, only to empty the victims' bank balances immediately after payment.
The second and larger scheme involved "Fred and Farid Investment Limited" (FF Investment), a bogus investment arrangement that trapped over 200,000 investors. Through nine different companies offering fraudulent packages, the syndicate raked in over N18 billion. While three Nigerian accomplices have been charged, the masterminds are believed to be foreign nationals who exploited the porous banking system to launder the funds.
The EFCC has called on regulatory bodies to take immediate and severe action.
The Commission demanded that Deposit Money Banks, Fintechs, and Microfinance Banks found aiding these crimes should face suspension and be referred to the EFCC for prosecution.
Uwujaren warned that the era of tolerating "suspicious and structured transactions" is over, tasking financial institutions to firm up their operations and stop the leakages bleeding the economy.
The Commission emphasized that Know Your Customer (KYC) and Suspicious Transaction Reports (STRs) must be strictly enforced to prevent further abuse of the nation's financial space.