News

June 21, 2024

NFIU cracks down on dirty money

NFIU

… Banks, MDAs raise alarm over increased use of fake SWIFT codes, forged documents, others for scams

By Luminous Jannamike

ABUJA – The Nigerian Financial Intelligence Unit (NFIU) has launched a crackdown on fraudulent activities in the country’s financial system, amid a rising trend of forged documents and fake transactions worth millions of euros and dollars.

According to credible sources, the agency has received multiple complaints from financial institutions, government agencies, and third parties regarding the fraudulent activities, which involve the use of fake SWIFT messages, Memoranda of Understanding (MoUs), and other supporting documents to deceive unsuspecting members of the public.

The NFIU identified several similarities among the fraudulent activities, including the fact that most funds were allegedly transferred from top European financial institutions, and the agency never received corresponding requests from foreign Financial Intelligence Units (FIUs).

Many of the involved entities were briefcase companies without real business operations, and the documents provided were often forged, including SWIFT messages and legal agreements. Entities involved were typically newly incorporated or not registered with the Corporate Affairs Commission (CAC).

Consequently, the NFIU has issued guidelines to financial institutions to mitigate the risks associated with these fraudulent activities, including conducting enhanced due diligence on customers and transactions, and filing Suspicious Activity Reports (SARs) to the NFIU.

An official of the agency, who spoke in confidence, said, “We have noticed a worrying trend of forged documents being used by fraudsters to defraud unsuspecting members of the public. False allegations and misrepresentation of material facts can lead to a loss of confidence in the banking system.

“We have seen cases where entities claim to be victims of criminal conversion of funds, but our investigation reveals that the transactions never occurred. Potential investors must scrutinize business opportunities thoroughly before committing financial resources.”

The agency further urged the Nigerian Bar Association (NBA) to sensitize its members on the importance of verifying and authenticating documents received from clients and to conduct due diligence on clients and their documents to prevent involvement in fraudulent activities.

The NFIU’s investigation into the fraudulent activities revealed several case studies, including one involving a legal firm that filed a complaint in July 2020, alleging that Company F, nominated for a construction project, was unable to access €7.88 million transferred from a European bank due to a stop order and subsequent administrative errors.

Another case involved XXX Nigeria Limited seeking the release of $10 million frozen by a Nigerian bank, which the company claimed was for investment purposes, but the NFIU analysis revealed that the transfer never occurred.

The NFIU warned that false allegations and misrepresentation of material facts can lead to a loss of confidence in the banking system, and urged the public to be vigilant about fraudulent individuals and fictitious telegraphic inflows (wire transfers).

The agency reiterated its commitment to safeguarding the integrity of Nigeria’s financial system and will generate intelligence reports on any fraudulent activities and share them with relevant law enforcement agencies domestically and internationally.

“We urge the public to be vigilant about fraudulent individuals and fictitious telegraphic inflows (wire transfers). We remain committed to safeguarding the integrity of Nigeria’s financial system and will generate intelligence reports on any fraudulent activities and share them with relevant law enforcement agencies domestically and internationally,” the official added.