Monday, 05 June, 2023


Two Nigerian banks were rebuked for their role in a $4 million theft from pensioners

Abdulrasheed Maina, a former Nigerian government official who ran a defunct pension reform department, has been convicted of stealing 2 billion naira ($4.8 million) belonging to pensioners after a two-year trial.

Okon Abang, a judge at a federal high court in Abuja, sentenced Maina to eight years in prison on Nov. 8 after finding him and his company guilty of all twelve counts (essentially of money laundering) filed by the Economic and Financial Crimes Commission (EFCC), Nigeria’s anti-corruption prosecutor. Maina and his lawyer all but admitted guilt, signaled an apology, and asked for “the minimum possible punishment.”

The judge had only the harshest words for Maina—who had fled trial at some point but was arrested in Niger—describing him as inhumane, heartless, and lacking compassion for pensioners, “most of whom have died without reaping the fruits of their labor.” But Abang also directed his ire at two banks where Maina stored his loot, drawing attention to possible weaknesses in the anti-money laundering setup within Nigeria’s banking system.

Banks were faulted for poor due diligence on Maina 

Maina diverted N300 million ($730,000), N500 million ($1.2 million) and N1.5 billion ($3.6 million) into accounts he opened with United Bank for Africa (UBA), and Fidelity bank with family members as signatories, the court said. For failing to flag the identities, Abang said both banks “should have been arraigned with the convict for illegal transactions” and have their banking licenses withdrawn.

Since the Money Laundering Act of 2011 was passed, Nigeria’s central bank and the EFCC have tried to enforce stricter due diligence within the banking system, especially on know your customer (KYC) procedures.

The 2011 law prohibits anonymous accounts whose ownership is known to only a few bank employees. In 2014, the creation of unique bank verification numbers was supposed to tie an individual to every bank account they have, making it track anyone’s financial profile. The central bank demands banks to report irregular activity on customer accounts, especially inbound transfers that exceed what should be expected for an individual or company based on their usual income.

The bank has also been extra vigilant this year against cryptocurrency transactions, and has pressed banks to be more aggressive in spotting peer-to-peer crypto trades from users’ disguised transaction references.

Yet Maina got away with large transfers that were, as the court pointed out, orders of magnitude beyond his monthly civil servant’s salary of under N300, 000 ($730.) “The banks benefited from the proceeds of illegal transactions. UBA and Fidelity Bank provided the channels with which the convict used in defrauding the federal government,” Abang concluded.

As it turns out, the banks were not charged, and it may well be that they had no direct role in enabling Maina as the judge declares.

Nigerians shrugged at the verdict

In the meantime, Maina’s eight-year sentence takes effect from Oct. 2019 when he was first arraigned.

He will begin refunding at least N1 billion of his loot to the government within 90 days, a possible deterrent against future money launderers. It is not clear how the defrauded pensioners will get their money back as pension administration in Nigeria remains under a cloud of inefficiency and allegations of misappropriation.

Some Nigerians are already looking past the conviction to what happens next, perhaps disillusioned by other unsolved instances of alleged corruption involving higher-ranking government officials, including a current state governor affiliated with president Muhammadu Buhari’s government who was captured on video appearing to take a bribe in dollars (said governor’s wife was arrested by the EFCC for a different matter last month.)

And as rival security agencies tussled for Maina’s custody after the judgment, it seemed to counter expectations that he will suffer serious loss for his crime.’

What should be a rare but huge win for the anti-corruption fight under APC has again exposed the corruption in our security agencies – fighting for custody because Maina will pay well for access to comforts and come out looking more robust than many impoverished Nigerians.— Demola Olarewaju (@DemolaRewaju) November 8, 2021

Credit: Quartz Africa


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