Some Nigerian banks, fintech companies and microfinance institutions are facing possible suspension and prosecution following their alleged involvement in large-scale financial fraud schemes that cost Nigerians over N180 billion.
This is as the Economic and Financial Crimes Commission (EFCC) has called on regulators to impose strict sanctions on deposit money banks, fintechs and microfinance banks found to have aided and abetted fraudsters through negligence, regulatory breaches and weak internal controls.
The Director of Public Affairs of the EFCC, Wilson Uwujaren, disclosed this in Abuja during a media briefing, where he revealed that investigations uncovered widespread compromise within the financial system involving an N18.7 billion investment scam and fraudulent cryptocurrency transactions amounting to N162 billion.
Uwujaren said a new-generation commercial bank, six fintech firms and several microfinance banks were implicated in facilitating the laundering of illicit proceeds for fraud syndicates.
He described as alarming the discovery that cryptocurrency transactions worth N162 billion passed through a single bank without adequate due diligence, adding that investigations also showed that one customer operated as many as 960 accounts in the same bank, all allegedly linked to fraudulent activities.
According to him, the affected institutions compromised basic banking procedures, enabling fraudsters to convert stolen funds into digital assets and move them to safe destinations.
Uwujaren said the EFCC has urged regulatory bodies to enforce full compliance with Know Your Customer (KYC), Customer Due Diligence (CDD) and Suspicious Transaction Reporting (STR) requirements.
“Any deposit money bank, fintech or microfinance institution found to be aiding and abetting fraudsters should be suspended and referred to the EFCC for thorough investigation and possible prosecution,” he said.
Providing details of the scams, Uwujaren explained that the N18.7 billion fraud involved two major schemes. The first was an airline ticket discount scam that targeted unsuspecting travellers, especially foreign passengers.
Under the scheme, fraudsters advertised fake discounts on international flights and designed payment platforms that made victims believe they were paying directly to the airline, after which their bank accounts were completely emptied.
He said over 700 victims lost a total of N651.1 million to the scheme, adding that the EFCC recovered N33.63 million, which has been returned to some victims.
The second scheme involved Fred and Farid Investment Limited, also known as FF Investment, which lured Nigerians into bogus investment arrangements.
Uwujaren said more than 200,000 victims were defrauded through the scheme, with about N18.1 billion raked in through nine companies offering fake investment packages.
He added that foreign nationals are believed to be behind the scams, working with three Nigerian accomplices who have since been arrested and charged to court, while warning Nigerians to exercise caution in online financial transactions.