Six Nigerian Fintechs, Banks Implicated In Massive Fraud That Burned Many

Nigeria’s Economic and Financial Crimes Commission (EFCC) has implicated a major commercial bank, six fintech companies, and several microfinance banks in large-scale fraud, accusing them of allowing criminals to move NGN 162 B (~USD 114 M) in suspicious cryptocurrency transactions with no oversight.

The anti-graft agency said the institutions failed basic financial security checks, enabling fraudsters to launder money through the system during the 2024/2025 financial year. In one extreme case, a single individual operated 960 bank accounts at one institution, all allegedly used for fraud.

The EFCC linked the banking lapses to two major scams that defrauded hundreds of thousands of Nigerians. The first was an airline ticket discount scheme. A syndicate, allegedly led by a foreign national, advertised heavily discounted flights. Victims were tricked into making payments that appeared to go directly to an airline, but the payment module was designed to drain their entire bank accounts. Over 700 people lost an estimated NGN 651 M to this scam.

The second was a fraudulent investment platform called Fred and Farid Investment Limited (FF Investment). The scheme promised high returns and used a network of at least nine shell companies to collect funds from more than 200,000 investors, generating approximately NGN 18 B. Foreign nationals are believed to be the masterminds, with three Nigerian accomplices already arrested and charged.

At the heart of the scandal is a catastrophic failure by the financial institutions to follow “Know Your Customer” (KYC) and anti-money laundering rules, the agency says. These are basic regulations that require banks to verify who their customers are and monitor transactions for suspicious activity.

EFCC Director of Public Affairs, Wilson Uwujaren, stated that NGN 18.1 B was moved through the traditional banking system “without due diligence,” but stressed that the NGN 162 B in unchecked cryptocurrency flows through one bank was “particularly worrisome”. He accused the institutions of having “serious weaknesses in internal controls” that allowed criminals to easily convert fraud proceeds into digital assets and move them overseas.

The EFCC has issued a stark warning to financial regulators, urging them to suspend any bank, fintech, or microfinance bank found aiding fraudsters and transfer them for investigation. Uwujaren called for strict enforcement of KYC, Customer Due Diligence (CDD), and rules on filing Suspicious Transaction Reports (STRs), warning that continued negligence “expose[s] the economy to systemic risks.”

So far, the EFCC’s intervention in the bank-facilitated fraud has led to the recovery of NGN 33.62 M, which has been returned to some victims. The crackdown signals a tougher regulatory stance as authorities grapple with the challenge of securing Nigeria’s rapidly digitalising financial system against sophisticated crime.

Feature Image Credits: AB Magazine