A first generation bank with a market capitalization of ₦829 billion (name withheld), has begun legal action to recover “huge sums of money” allegedly diverted by an employee in Iganmu, Lagos.
The employee, now on the run, allegedly diverted those funds to 98 bank accounts classified as first beneficiaries, including his wife’s.
The bank reported the incident to the Nigerian Police Force on March 25, 2024, and obtained three court orders between April 4 and 8, 2024, to block hundreds of bank accounts believed to have received the stolen funds.
Three people with direct knowledge of the incident told TechCabal that while the initial amount discovered to be diverted was around ₦12 billion, it now stands at around ₦40 billion ($29 million).
As a manager on the electronic products team at the affected bank, the employee, identified by court documents as Tijani Muiz Adeyinka, was authorised to process reversals for customers, said one employee of the affected bank with knowledge of the matter.
It meant he controlled an account with which he processed those reversals and could credit merchant accounts.
Muiz allegedly used that authority to instead credit customer reversal requests to a merchant he controlled.
As the last line of authority on the team, he allegedly did not need any further approvals, which allowed him to carry on diverting customer funds for almost two years without detection.
His scheme was eventually discovered when a customer made a complaint that was eventually escalated to the bank’s internal control unit.
The control unit discovered several suspicious transactions and reported them to the police.
“We hereby bring to your notice the discovery of fraudulent transactions into various transactions within and outside the bank and request your good offices to set up the machinery of investigation in place with a view to unravelling the circumstances surrounding the said fraud and getting the culprits apprehended to face the wrath of the law,” read a letter dated May 10, 2024, from the affected bank to the Lagos State Commissioner of Police.
The first generation bank did not respond to multiple calls and emails from TechCabal requesting comments.
A spokesperson for the Nigerian Police Force did not immediately respond to a request forunravelling
A request for comments from the Economic and Financial Crimes Commission (EFCC) spokesperson was not answered.
“I discovered that Muiz Tijani Adeyinka, a former staff member of First Bank, was involved in the nefarious posting of fraudulent transactions,” read a statement from the investigating police officer in charge of the case signed on March 26, 2024.
“It was discovered that he made some fraudulent transactions to his wife’s account number (name withheld) domiciled with Zenith Bank, which in turn transferred to other beneficiaries totalling thirty-four accounts, which also gave birth to second beneficiaries domiciled with other banks totalling 1,190 accounts,” the statement added.
Across multiple court documents and complaints, the first generation bank did not state how much money was stolen.
It was also silent on how the money was obtained while asking the police to “unravel the circumstances surrounding the fraud.”
Despite a decline in reported cases in Q1 2024, fraud remains a big issue in Nigeria’s financial services industry.
While fintech startups receive disproportionate scrutiny, the country’s biggest banks are often on the receiving end of fraud attacks too.
In 2023, Access Bank lost ₦6.15 billion to fraud and Fidelity Bank lost ₦2.5 billion in three incidents, per a report from BusinessDay.
The affected first generation bank obtained an order on April 8 to block the bank accounts of the first and second beneficiaries of the illegally obtained funds from a Federal High Court in Lagos.
The bank also obtained additional orders dated April 8 and May 5 from a Jalingo and a Lagos high court to block additional accounts believed to be involved in the incident.
One first beneficiary account reportedly used some of the stolen funds to buy the stablecoin USDT from several crypto traders, according to an anonymous email sent to TechCabal detailing their bank accounts.
Those traders claimed their only involvement was selling USDT and denied knowing the funds they received were proceeds of fraud.
They have now been drawn into a legal battle with the bank, with restrictions on their accounts at the time of this report.
Source: TechCabal
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