Nigeria has been in the eyes of the storm globally in the past few days over fraud-related activities. To kick start the fraud filled week for Nigeria was the arrest of Obinwanne Okeke, aka ‘Invictus Obi’, by the American Federal Bureau of Investigation, FBI, in the United States over an alleged $11 million fraud. The ruckus that greeted his arrest had hardly died down when Jenna Bourgeois, the chairman, Dynamics Intelligence, an international firm, said it is shutting down its operations in Nigeria over fraud-related activities but not without warning prospective companies not to do business with Nigeria. As if that wasn’t enough, the FBI, a few days later, busted a group of 80 Internet fraudsters, 77 of whom were Nigerians, who had swindled their victims to the tune of N16 billion. BABAJIDE OKEOWO in this report takes a look at this menace and examines what it portends for the Nigerian economy and the way forward..
Before the bubble went burst for the duo of Valentine Iro and Chukwudi Christogunus Igbokwe, they were the quintessential “Big Boys”. They drive state-of-the-art cars, they live in palatial mansions in choice areas and have an array of beautiful ladies at their beck and call; in fact, they live a life many will die to live. Each month they wire thousands of dollars to their respective families back home, who also live large due to the status of their Diaspora relative. They command respect in their various clans and have chieftaincy titles bestowed on them periodically but unknown to many, they are Internet fraudsters popularly called “Yahoo boys”.
Their modus operandi is quite simple, yet elaborate and carefully worked out. The scammers victimised individuals and small and large businesses. In targeting businesses, they used a tactic called “business email compromise,” also known as CEO fraud. Under that scheme, the fraudster gains access to a company’s computer system and then, posing as a company executive, tricks an employee into making an unauthorised wire transfer into a bank account the fraudster controls. The Nigerian fraudsters targeted victims around the world, some of whom lost hundreds of thousands of dollars, at least, 16 companies were among their victims.
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Iro and Igbokwe, the men at the heart of the scam, hail from the Nigerian city of Owerri, according to a criminal complaint filed in the case. Between 2014 and 2018, Iro and Igbokwe, working with nearly 80 other international swindlers, facilitated a series of schemes that resulted in the theft of, at least, $6 million and the attempted theft of $40 million more from victims in more than 10 countries, according to a 252-count federal indictment unsealed few days ago.
In 2014, a San Diego clothing distributor wired nearly $46,000 into a bank account controlled by one of the scammers, believing it was paying a Chinese vendor for an order of men’s shirts.
Similarly, in 2016, an unidentified Texas company was tricked into wiring $187,000 into a fraudulent account. The company thought it was making a payment for an oil extraction equipment order.
Romance scam also involved
The conspiracy also targeted the elderly and victims of so-called romance scams.
For example, in 2016 a Japanese woman, identified in court documents as F.K., lost more than $200,000 during a 10-month romance scam with a fraudster, who impersonated a U.S. Army captain stationed in Syria. The list is endless.
In 2017 alone, according to the indictment, Iro and Igbokwe sent, at least, $5 million to the Nigerian accounts of the fraudsters, family members and themselves, according to the complaint. Evidence seized by the FBI indicates the two men were using the stolen funds to build large houses in Nigeria.
The Justice Department unsealed the indictment after the arrest of 14 people, including Iro and Igbokwe, a few days ago. Three others were already in custody. Six defendants remain at large in the United States, while authorities are working with partners in nine other countries to arrest 57 others, most of whom are believed to be in Nigeria.
Global electronic fraud on the rise-Report
Global online fraud has become increasingly pervasive in recent years. In its annual Internet Crime Report in April, the FBI said online theft, fraud, and exploitation were responsible for $2.7 billion in financial losses in 2018, up from $1.4 billion in 2017. Similarly, romance scams cost Americans $143 million last year alone, according to the Federal Trade Commission.
On the home front, the acting chairman of the Economic and Financial Crimes Commission (EFCC), Ibrahim Magu, has said that the commission has arrested 28 suspects on the alleged FBI Internet fraud list and recovered $314,000 and about N373 million. The EFCC chairman stated that the collaboration between the agency and the FBI led to the recovery of the money from perpetrators of computer-related fraud. Magu said that while the sum of $314,000 had been recovered, N373 million (totaling N486 million) had been traced to various commercial banks by the Lagos zonal office of the EFCC.
Why fraud is on the rise – Experts
According to Mathias Baba Tsado a Public Analyst and former Presidential candidate, the reason for the rise in fraud is due to the make it at all cost culture that is pervasive in Nigeria.
“We have a culture that is gradually becoming acceptable in this country, this is the make it anyhow culture, then as soon as you have made it, come out and display it and the society will celebrate you without asking questions on how you came about the wealth. Ours is a country which is highly monetised, everything you want to do in Nigeria is in terms of Naira and Kobo and everybody is looking for how to get this money and in this process, we are damaging ourselves, damaging our reputation and damaging the reputation of our country. The brand called Nigeria has been damaged. It is very easy to brand a group of people because of who they are, because of the activities of a certain group and once this label is given to you, it becomes very difficult to peel off. It is not like the world cannot do without Nigeria, like we are too important for the rest of the world, the only thing the world is worried about is that we do not become a nuisance to them, unfortunately, that is the situation” he said.
Speaking further, he expressed sadness on how the activities of a few have dented the image of Nigeria considerably.
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“You can begin to imagine the kind of humiliation that Nigerians are going to be subjected to when you want to travel out of the country, also, when you apply for visas the scrutiny will be double. You can also imagine when companies are saying they do not want to do business with Nigeria and Nigerians because of fraud, it is a national crisis because, for every company that shuts down even if it is twenty people that this company employs, you are adding that figure to the already bloated figure of unemployed people in the country. Unfortunately, we cannot tell the world how to perceive us; it is up to them to define how they see us. It is really sad news,” he added.
On his part, Taiwo Oyedele, Partner and West Africa Tax Leader, PriceWater House Cooper, PwC expressed sadness that ours is a country that celebrates fraudulent people.
“In Nigeria, there seems to be a general acceptance of fraudulent people, this is a country where we welcome ex-convicts with thanksgiving, these things send out the wrong message,” he said.
How to address this menace – Stakeholders
Speaking on the way forward, Oyedele called for a re-orientation of the Nigerian value system.
“We need to take a step, first to do a re-orientation of the people so we can start focusing on values, on hard work, on integrity and honesty. The government should also pass an unexplained wealth order as they have in the United Kingdom, if you have wealth that you cannot explain, then the wealth will be taken from you. We need to start making people know that they can only brag with the wealth they made legitimately not some unexplained wealth from fraud” he said.
He also advised that we need to solve the problem of celebrating ill-gotten wealth.
“The biggest problem we need to solve is the penchant to see it as being okay to spend money that you cannot explain and people celebrate you. Nobody owes it to us to see that or image is not dented, it is up to us to see that people are seeing us as been serious and not just talking about it. We need to start doing systemic control and blocking all the loopholes to ensure that we clamp down on frauds in Nigeria. We all have a role to play in curbing this menace, if you see something, say something, do not condone it” he added.
He also charged the government to take this issue very seriously by taking a more decisive step in demonstrating to the world that we do not condone fraud as a country.
“We must take this very seriously if we must have a country to call our own and be proud of. Let us stop celebrating people who have wealth that we cannot explain, government, more importantly, must take steps to demonstrate to the rest of the world that we do not condone fraud by holding to account those who have been accused and bring them to justice. If we go back to the days of celebrating values, then we will see a transformation in the way Nigeria is perceived which in turn will have a significant impact on the business community, for Nigerians traveling abroad to do legitimate and honest businesses and everybody” he concluded.
On his part, Tsado called for a recalibration of our value system and a more proactive approach by EFCC in curbing this menace while charging the financial sector to develop a system that is capable of monitoring the financial activities of individuals in the country.
“Recalibrating our value system is very important, so is been able to also have a comprehensive system that can control and be able to monitor the financial activities of individuals and citizens of this country. Now, this is something that I find very interesting, we have EFCC in all the states of the country and if you find a lodgment in an account that is suspicious, it should be flagged. We should have an EFCC that is proactive and a system where every transaction that comes into this country is been reported and questions are being asked,” he added.
