The Nigerian Financial Intelligence Unit (NFIU) has initiated a crackdown on fraudulent operations in the country’s financial system, citing a growing trend of counterfeit documents and bogus transactions totaling millions of euros and dollars.
According to credible sources, the agency has received numerous complaints from financial institutions, government agencies, and third parties about the fraudulent activities, which include the use of fake SWIFT messages, Memoranda of Understanding (MoUs), and other supporting documents to deceive unsuspecting members of the public.
The NFIU discovered various parallels in the fraudulent actions, including the fact that the majority of the monies were supposedly transferred from top European financial institutions, yet the agency never received corresponding requests from international Financial Intelligence Units (FIUs).
Many of the connected businesses were briefcase corporations with no real commercial operations, and the documentation given were frequently faked, including SWIFT messages and legal agreements.
The entities concerned were often freshly incorporated or unregistered with the Corporate Affairs Commission (CAC). As a result, the NFIU has provided advice to financial institutions to reduce the risks connected with these fraudulent operations, such as undertaking increased due diligence on customers and transactions and filing Suspicious Activity Reports (SARs) with the NFIU.
A confidential agency official stated, “We have detected a concerning trend of fraudsters using falsified documents to scam unwary members of the public. False charges and misrepresentations of material facts can undermine trust in the banking system.
“We have witnessed examples in which entities claim to be victims of criminal financial conversion, but our analysis demonstrates that the transactions never took place. Potential investors must properly investigate business ideas before committing financial resources.”
The agency also encouraged the Nigerian Bar Association (NBA) to educate its members on the necessity of checking and authenticating papers received from clients, as well as performing due diligence on clients and their documents to avoid involvement in fraudulent activities.
The NFIU’s investigation into the fraudulent activities turned up 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 example involved XXX Nigeria Limited requesting the release of $10 million blocked by a Nigerian bank for investment purposes, but the NFIU investigation discovered that the transfer never took place. The NFIU warned that false allegations and distortion of material facts can cause a loss of trust in the banking system, and asked the public to be wary of fraudulent individuals and bogus telegraphic inflows (wire transfers).
The agency restated its commitment to protecting the integrity of Nigeria’s financial system, stating that it will generate intelligence reports on any fraudulent actions and share them with appropriate local and foreign law enforcement organisations.
NFIU
“We warn the public to be wary of dishonest individuals and fictitious telegraphic inflows (wire transfers). We remain dedicated to protecting the integrity of Nigeria’s financial system, and we will create intelligence reports on any fraudulent activity and share them with relevant law enforcement organisations both domestically and internationally,” the official said.
