The Nigerian Financial Intelligence Unit (NFIU) has reported a significant increase in fraudulent petitions related to the alleged transfer of funds from foreign banks to Nigerian banks.
These deceptive practices are increasingly targeting victims and posing a persistent threat to financial institutions, law enforcement agencies, and other government entities.
In a report dated June 19, 2024, the NFIU highlighted the complexity and frequency of these schemes, emphasizing the urgent need for enhanced security measures and coordinated responses to mitigate the risks and protect stakeholders.
The report stated, “Our findings suggest that deceptive fraudulent petitions involving the tracing and recovery of funds allegedly transferred from foreign banks to Nigerian banks are becoming a recurrent threat to not only the targeted victim(s) but also Financial Institutions, Law Enforcement Agencies, and other government agencies.”
The NFIU advised financial institutions and the general public to remain vigilant and adopt measures to safeguard important documents from being easily accessible, preventing their use in fraudulent petitions.
The public is urged to exercise skepticism when dealing with telegraphic transfer documents from major European banks, as many frivolous claims originate from the same jurisdictions and banks abroad.
The NFIU also recommended that relevant law enforcement agencies (LEAs) take steps to address the problem of fraudulent telex copies by ensuring the prompt prosecution and sanctioning of offenders to serve as a deterrence.
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Highlighting the impact on banks, the NFIU noted that false allegations based on misrepresentation of material facts could lead to a loss of confidence among the banking public, who might believe that the banks actually held the funds in question.
To counter this, the NFIU suggested that financial institutions should conduct Enhanced Due Diligence upon receiving a letter from a customer anticipating a large inflow, especially if the document is a telex copy.
“Where issues of forgery are suspected, the Financial Institution must take steps to quickly respond in writing to the letter from the customer, clearly stating the non-existence of such pending transaction of funds.
This action must be taken immediately upon receipt of the complaint by the bank to avoid their use of the acknowledgment of the letters for fraudulent purposes,” the report advised.
Listing examples of such fraudulent petitions, the NFIU mentioned a case where a law firm submitted a petition on behalf of its client, an NGO, requesting the NFIU and other relevant agencies to trace and recover €30 billion allegedly transferred from a foreign bank to a Nigerian bank, claiming the funds had been blocked by a financial institution in Nigeria. Another petition sought to recover €6 billion transferred from foreign banks to the client’s Nigerian bank account.
The NFIU urged the Nigerian Bar Association (NBA) to educate its members on the importance of verifying documents received from clients before taking action. “There is a need for the Nigerian Bar Association to sensitize its members on the importance of verifying and authenticating documents received from clients before taking action,” the report stated.
To curtail the activities of individuals engaging in fraudulent wire transfers, the NFIU recommended that law firms conduct Due Diligence on their clients and the documents received while acting as legal representatives.
