Creative Ways Of Money Laundering Uncovered

The string of corruption scandals in Nigeria over the past three months has not only sullied the country’s reputation but revealed booming local money laundering business as well, as people look to launder money corruptly received.
Across the country money is laundered not only through banks but also through a whole gamut of institutions and legitimate businesses and it is not clear what new measures put in place to address these new forms of money laundering.


Also uncovered other creative ways of ‘dry-cleaning’ instead of merely laundering stolen money and that also includes through foreign currency changers and jewelers.


Today, the skyline is being transformed by housing constructions. There are new businesses opening particularly in the oil and gas sector, reflecting not only general economic growth, but also some less savory facts, influx of drug money, graft, as underlined by the huge scam uncovered recently in the Pension Scheme and outright extortion and stealing of public funds.


“What it tells us is that corruption is now free for all” says OpeyemiAgbaje, CEO, Resource and Trust Company and an experienced finance and business expert. “It is no longer the ‘normal’ behaviour of a few Nigerians. It is a sign that the state has become dysfunctional and can not protect its own money; it cannot defend the money of its defence agencies from corruption. It is also a sign that the country has been captured by not just a mafia but multiple gangs of mafias” he adds.


According to findings, public funds are the quickest way of enrichment and one of the methods for laundering the ill-gotten money is real estate, investment in hotels and petrol stations.


“The magnitude of money laundering in Nigeria is huge and I am not certain the agencies can cope,” says Clement Ofuani, Managing Partner at OfuaniMaidoh and Co, Chartered Accountants. “That is why we must be committed to a clear national identity management system,” he added.


Analysts spoken to say it is about time the Central Bank of Nigeria (CBN) and the Economic and Financial Crime Commission (EFCC) and other agencies with responsibility, intensify scrutiny of banks in the country and how they have processed, and in some cases, intentionally hidden financial transactions on behalf of corrupt government officials, drug curriers and peddlers and criminals.


A number also point to what they say is a breakdown in the banks anti-money laundering systems as well as regulatory and compliance matters.


Ofuani and Agbaje believe the banks have a lot to do in this regard. They say the primary responsibility rest with the banks.


Recent probe into Police Pension Fund revealed how over N32.8 billion was laundered through some banks without consequent questions raised on the huge amounts by the banks involved.


“If there was good governance and risk management systems in place, those transactions will not take place,” says Agbaje.


Agbaje said it is an indictment on the banks and also questions the governance and risk management process the CBN says it has enthroned in the banking system.


The United State government underscored the huge handicap of the anti-crime agencies when its recent report on Narcotics Control put Nigeria back at the top of its list of money, financial crimes and corruption based on the weak enforcement, poor Judiciary and political interference of the country.


In the US 2012 International Narcotics Control Strategy Report released by the US State Department, Nigeria was placed in the high risk category and tagged under countries/Jurisdiction of Primary Concern.


The US Narcotics agency’s concern is underlined by the number of convictions the country’s anti-crime agencies were able to obtain in the course of 2011 which is in sharp contrast to the number of prosecutions. Out of 639 prosecutions between October1, 2010 to September 2011, only 73 convictions were recorded.


The report noted among other issues, that the proceeds of illicit drugs in Nigeria derive largely from foreign criminal activity rather than domestic activities.


“Individuals, criminals and terrorist organisations take advantage of the country’s location, porous borders, weak laws, corruption, lack of enforcement, and poor socio-economic conditions to launder the proceeds of crime,” the report noted.




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