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LequteMan
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Nigeria - Bashir Abdullahi, a witness during an EFCC trial describes how an Indian businessman, 'Fernandez' and his 3 companies defrauded several Nigerian banks to a sum of N32bn, Daily Independent reports.
The affected banks, he said, were Zenith Bank, Afribank, Intercontinental Bank, Union Bank and Wema Bank.
His investigations, he said, revealed high volume transactions from one account to another, which he said were suspected to be fraudulent.
“In our findings, we discovered that the accused was involved in cheque-kitting and round tripping. It is also known as Lazy Susan, a business model.”
Lazy Susan, he said, involves members of a business group transferring money from one sister company to another without selling any commodity, using money obtained from other banks.
He said as at September 2007, the accused had less than N2million in his account. “The volume of transaction was also minimal, starting with N20million. Within the same month, it rose to N600million. The volume of transaction also sky rocketed to billions of naira within just three months,” he said.
Abdullahi said the transactions involved the use of “suspended cheques” which did not go through the clearing house initially.
“If he brings a cheque, credit will be given to him immediately without going through clearance. Because he has a cheque discounting facility, if he brings N1billion cheque, they will give him N800million,” Abdullahi said.
He said Wema Bank, for instance, discovered that it allegedly lost N23billion to the activities of Fernandez and his companies.
On how the fraud was perpetrated, he said a high ranking staff of Wema Bank aided the fraudulent transactions.
The Wema Bank insider, the witness said, “was suppressing the cheque”, such that when other banks asked whether there is money in Fernandez’s account, the official would answer in the affirmative. “All the banks will ask Wema Bank staff, is there N5billion in his account, and he will say yes,” said the witness.
Abdullahi said the accused person claimed to be involved in oil and gas business which he said was “cash-intensive” and therefore needed to move money from one bank to the other.
He said the bubble burst when the banks, at the clearing house, discovered that “they were clearing the same cheque”.
Justice John Tsoho adjourned till June 16 for continuation of trial.
#Nigeria #Zenith #Wema #AfriBank
The affected banks, he said, were Zenith Bank, Afribank, Intercontinental Bank, Union Bank and Wema Bank.
His investigations, he said, revealed high volume transactions from one account to another, which he said were suspected to be fraudulent.
“In our findings, we discovered that the accused was involved in cheque-kitting and round tripping. It is also known as Lazy Susan, a business model.”
Lazy Susan, he said, involves members of a business group transferring money from one sister company to another without selling any commodity, using money obtained from other banks.
He said as at September 2007, the accused had less than N2million in his account. “The volume of transaction was also minimal, starting with N20million. Within the same month, it rose to N600million. The volume of transaction also sky rocketed to billions of naira within just three months,” he said.
Abdullahi said the transactions involved the use of “suspended cheques” which did not go through the clearing house initially.
“If he brings a cheque, credit will be given to him immediately without going through clearance. Because he has a cheque discounting facility, if he brings N1billion cheque, they will give him N800million,” Abdullahi said.
He said Wema Bank, for instance, discovered that it allegedly lost N23billion to the activities of Fernandez and his companies.
On how the fraud was perpetrated, he said a high ranking staff of Wema Bank aided the fraudulent transactions.
The Wema Bank insider, the witness said, “was suppressing the cheque”, such that when other banks asked whether there is money in Fernandez’s account, the official would answer in the affirmative. “All the banks will ask Wema Bank staff, is there N5billion in his account, and he will say yes,” said the witness.
Abdullahi said the accused person claimed to be involved in oil and gas business which he said was “cash-intensive” and therefore needed to move money from one bank to the other.
He said the bubble burst when the banks, at the clearing house, discovered that “they were clearing the same cheque”.
Justice John Tsoho adjourned till June 16 for continuation of trial.
#Nigeria #Zenith #Wema #AfriBank
