He said investigations by the anti-graft agency revealed deep lapses in compliance by financial institutions that enabled fraudsters to operate freely within Nigeria’s financial system.
The Economic and Financial Crimes Commission (EFCC) has raised the alarm over negligence and compromise by some banks and financial technology companies in two large-scale fraudulent schemes that have cost Nigerians a total of N18,739,999,027.35.
The Commission disclosed this on Thursday in Abuja, during a media briefing addressed by the Director of Public Affairs, Wilson Uwujaren.
He said investigations by the anti-graft agency revealed deep lapses in compliance by financial institutions that enabled fraudsters to operate freely within Nigeria’s financial system.
According to Uwujaren, one new generation bank and six fintech and microfinance banks were implicated in aiding fraudsters to defraud Nigerians through the schemes, which involved airline discount fraud and a bogus investment operation.
Uwujaren explained that the first scheme revolved around a fraudulent airline discount platform designed to lure unsuspecting victims, particularly foreign travellers.
“The modality of these fraudsters involves a string of carefully devised airline discount information that any unsuspecting foreign traveller will fall for,” he said.
“They advertise a discount system for the purchase of flight tickets of a particular foreign carrier. The payment module is designed in such a way that victims are convinced that payment is made directly into the airline’s account.”
He added that once payment is completed, the fraudsters immediately empty the victims’ bank accounts.
The EFCC disclosed that over 700 victims had fallen prey to the airline discount scheme, with total losses amounting to N651,097,755.00.
Uwujaren said the Commission had so far recovered and returned N33,628,000.00 to some of the victims.
However, he cautioned Nigerians to exercise heightened vigilance, noting that foreign actors involved in the scheme were converting illicit proceeds into cryptocurrency and moving the funds to “safer destinations” through digital platforms, including Bybit.
The second scheme, according to the EFCC, involved a company identified as Fred and Farid Investment Limited, popularly known as FF Investment, which allegedly lured Nigerians into fraudulent investment arrangements.
Uwujaren said more than 200,000 Nigerians were affected by the scheme, which operated through nine companies offering different investment packages.
He disclosed that a total sum of N18,088,901,272.35 was fraudulently raked in through the operation.
“In all, more than 900 Nigerians have been fleeced by fraudsters through the connivance of banks,” Uwujaren said.
He added that foreign nationals were behind the schemes, working with three Nigerian accomplices who have since been arrested and charged in court.
Providing further insight into the involvement of financial institutions, the Director of Investigations, Abdulkarim Chukkol, and the Acting Director of the EFCC’s Abuja Zonal Directorate, Michael Wetcas, described the situation as a serious compromise of Nigeria’s financial space.
According to them, “a new generation bank and six fintechs and microfinance banks are involved in this.
“These financial institutions clearly compromised banking procedures and allowed the fraudsters to safely change their proceeds into digital assets and move them to safe destinations.”
The EFCC revealed that a total of N18,739,999,027.35 was moved through Nigeria’s financial system without proper customer due diligence by the implicated institutions.
“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,” Uwujaren said.
“Investigations also showed that a single customer maintained 960 accounts in the same bank, and all the accounts were used for fraudulent purposes.”
The Commission called on regulatory authorities to enforce compulsory compliance with existing financial regulations, particularly in the areas of Know Your Customer (KYC), Customer Due Diligence (CDD), Suspicious Transaction Reports (STRs), and related safeguards.
Uwujaren said deposit money banks, fintech companies, and microfinance banks found to be aiding and abetting fraudsters should be suspended and referred to the EFCC for thorough investigation and possible prosecution.
He warned that negligence and failure to monitor suspicious or structured transactions by financial institutions would no longer be tolerated.
The EFCC reaffirmed its commitment to combating money laundering and financial crimes, assuring Nigerians that investigations into the schemes would be pursued to their logical conclusion.
Uwujaren also urged financial institutions to strengthen their operational frameworks and internal controls to prevent further abuse of the financial system.
“Financial institutions must firm up their operational dynamics and help save the nation from leakages and compromises that continue to bleed the economy,” he said.