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Nigerian banks race to join CBN Too-Big-To-Fail (Part III)

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Note: Read ‘Institutional fraud and greed’ Nigerian banks race to join CBN Too-Big-To-Fail (Part 1), if you’re yet to do so.

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Internal fraud, unabated system breaches due to poor cyber security, banking mass fraud, asset hijacking

With a brand value of $379m (45% increase YoY), 28,000 employees and total asset of over $25bilion Access Bank is biggest and most valuable bank in Nigeria. Though business started 33 years ago (in 1989), Access Bank’s journey to mega status only began in 2012 when it moved from being a solely corporate bank and expanding into personal and business banking. The unprecedented mergers and acquisition that followed, particularly that of Diamond Bank in 2019, has seen the bank grow its total asset from about $9billion to the current $25billion (by 166%) in only 10 years. For context, other fast-growing banks like Zenith Bank only grew total assets by 46%, etc, therefore Access Bank outperformed top players by over 110% (on an average).

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Of course, this growth implies the bank has more capacity to mint credit and can make a lot more money from interests. Also, it means that the management of the bank has more depositor’s funds to fond with, and by implication puts them in the precious ‘Too Big To Fail’ class.

Therefore, Access Bank, just like First Bank, GTB, Zenith Bank and UBA, is a major variable in state of our economic health as a nation. Collapse of an Access Bank will have multiplier effects that will touch every single one of us! Remember the dreaded diabolic loop?

Access Bank’s growth has not come without its fair share of challenges, majorly fueled by the elite’s avarice and the owners’ race to beat the competition. Like most other players in the industry and their counterparts in the West, banks hack the financial industry rules in a bid to continue to satisfy, primarily, the shareholders’ interests and other vested interests.

There are so many cases that are linked to Access Bank but we will only examine three:

Fraud: internal and external

When it comes the case of fraud, Access Bank can be termed notorious. From internal fraud cases by employees to sadly, being the leader in the cases of external fraud, Access Bank seem to have out-grown its capacity to keep its coffers safe.

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Scammers and hackers have popularly confessed that Access Bank and First Bank accounts seem to be the easiest to compromise. Over the last five years it has topped the list of Nigerian banks with reported cases of fraud, with report putting it at N871m between 2016 – 2021. That even escalated further with a report of N502m lost to fraudsters in the last one year alone!

There are also reports of internal compromise of the system. One that made it to the press is the case of one Elizabeth Modupe Osunjuyigbe, who allegedly, fraudulently diverted funds to the tune of over N34m.

Investigations revealed that the suspect allegedly forged a solicitor’s letter dated January 19, 2021, directing the bank to issue the draft in favour of Best Timland, claiming that the request was for the payment of rent to the landlord of one of the bank’s branches in Akwa-Ibom State.

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That speaks volume of the poor internal control measures at Access Bank, which is not so strange given that the management’s focus has been more on growing bigger, rather than stronger.

'Institutional fraud and greed' Access Bank race to join CBN Too-Big-To-Fail (Part III)

Herbert Wigwe

Allegations of asset hijacking

Sources close to the internal workings of Nigerian banks have confirmed the wicked practice of bankers grabbing juicy assets that their customers use to collateralise their loans. Someone once dropped a scary joke that “realtors think they can sell prime estates, they should go and learn from Nigerian bankers.” Sad!

There are cases of borrowers whose loans become delinquent for genuine reasons and who continue to engage the bank to restructure and explore options that will save them from losing their key assets. Of course, bankers who are privy to such information go on to inform their major account holders of these sorts of situations, who also stay ready to buy off these assets (with the help of bank staff) once the owners are tussled off them.

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The asset hijacking allegations seems to be wide spread in the bank, even up to its highest office.

In 2019, former Access Bank managing director, Herbert Wigwe, and eight others were arraigned before a Lagos High Court, Ikeja by the Special Fraud Unit of Nigeria Police over allegation of $6.3 million fraud. The case was stalled “due to absence of some the defendants”.

It was reported then that Wigwe, now the Group managing director/CEO of Access Holdings Plc, was standing trial along with Cast Oil and Gas Ltd, Seyi Sanni, Adekunle Adebayo, Access Bank Plc, Titi Oshontoki, Chinyere Bishop-Adigwe, Sunny Amos Affiong and Augusta Energy Nigeria Ltd for allegedly defrauding former Petroleum Minister, Chief Don Etiebet, through his company, Top Oil and Gas Development Ltd.

The police in a four-count charge alleged that the defendants and Augusta Energy of Geneva Switzerland (still at large) between January and December 2015, in Lagos, fraudulently induced Top Oil and Gas Development Ltd, to invest about $6.3m in the supply of a 10,000 metric tonnes of Automative Gas Oil, Ago.

Wigwe’s lawyer, Paul Usoro, SAN, however, informed the court of a pending application dated April 30, 2019, he filed on behalf of his client challenging the jurisdiction of the court to determine the matter. The usual “technical justice” game lawyers play to perpetually keep cases in courts.

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Unfortunately though, character is like a smoke, and more cases jumped out of the box.

The Police Special Fraud Unit again, now in Ogun State High Court, charged Herbert Wigwe with 21 counts of conspiracy and stealing.

Wigwe, Alawode Oluseye, Bayo Adesina, and Access Bank Plc are accused of conspiring and stealing 23,754.413 metric tonnes of steel billets valued at ₦2.5 billion belonging to BMCE Bank International Plc.

The alleged crime took place in June 2017 at the premises of Metal Africa Steel Products Limited along Sagamu/Ikorodu road, Ewe Jagun, in Ogun State, the police said.

According to the police, the defendants falsely presented themselves as the owners and sold the steel billets to Metal Africa Steel Products Limited without the authorisation of the actual owner.

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The police said the defendants forged the Bill of Ladings number: MJINLOS150007’1A’; MJINLOS150007 ‘1B’; MJINLOS150007 ‘1C’; MJINLOS150007 ‘2A’; MJINLOS150007’2B’; MJINLOS150007 ‘2C’; MJINLOS150007 ‘2C’; MJINLOS150007 ‘2D’; MJINLOS150007 ‘2E’; MJINLOS150007 ‘2F’; MJINLOS150007 ‘2G’; MJINLOS150007 ‘2H’; MJINLOS150007 ‘2I’; MJINLOS150007 ‘2J’; MJINLOS150007 ‘2k’; MJINLOS150007’2L’ and MJINLOS150007’2M’, which they claimed were issued on January 9, 2016.

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On this particular case it was reported later in 2019 that Wigwe and Access Bank may be settling out of court. This may have held too much stormy waters for them; a better idea would be to make it go away!

The questions are:

  • Is the case not beyond civil?
  • The criminal charge of forgery is with the state not the plaintiff?
  • Has the CBN launched its own investigation (and made findings public) on this sharp practice by an institution it is supposed to monitor and regulate?
'Institutional fraud and greed' Access Bank race to join CBN Too-Big-To-Fail (Part III)

Maxwell Odum

Abetting mass fraud: MBA Forex/Maxwell Odum N213billion fraud and the role of Access Bank Plc

When the Economic and Financial Crimes Commission declared Maxwell Chizi Odum wanted for fraud amounting to N213billion, the questions that came to most people’s mind were; who were his bankers? How could he have evaded the scrutiny of SFU, the Nigeria Financial Intelligence Unit (NFIU) and other very stringent anti-fraud/anti-money laundering blocks of the government? Who facilitated the evacuation of the funds even after he was placed under investigation?

There is only one answer, and its simple.

N213bilion is almost five times larger than CBN’s minimum capital reserve of an International Commercial Bank practice in Nigeria. Banks like Access Bank, who ran Odum’s major collection accounts, had all the motivations to encourage his illicit business to flourish. Even more, there are allegations that top staffers were key beneficiaries of the scheme.

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Maxwell Chizi Odum masterminded the biggest ponzi schemes ever conceived in Africa.

'Institutional fraud and greed' Access Bank race to join CBN Too-Big-To-Fail (Part III)

Like it happens so frequently in Nigeria, few people cared to inquire as to how a Pentecostal preacher without a strong expertise in economics or investments allegedly discovered an investment strategy that would make them obscenely wealthy. All they observed was that other individuals invested money in this thing that was popularly known as MBA Forex, and they emerged with incredible double-digit returns using an investing strategy that was much too complex for anybody to truly comprehend, even if they tried.

It was a ponzi scheme, as one would expect, quite similar to MMM.

According to Nigerian law, soliciting and accepting monetary deposits from the general public is considered doing banking activity and necessitates a banking license from the CBN. Additionally, the commercial promotion of any assets that guarantee fixed interest rates for money deposited for certain periods of time is a carefully regulated activity that is directly under the Securities and Exchange Commission’s jurisdiction (SEC).

MBA Forex was engaging in both of these regulated operations while holding no official authorisation from any regulatory body. MBA Forex was actually a wholly unlawful enterprise, except from its registration with the Corporate Affairs Commission (CAC), which pretty much anybody with a pulse and a valid ID can accomplish without any type of regulatory attention.

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MBA Forex differentiated itself from MMM by openly accepting funds into the corporate accounts it was somehow able to open at Access Bank, Ecobank, FCMB, First Bank, GTBank now GTCO, Sterling Bank, Sun Trust Bank, UBA, Unity Bank, Union Bank, and Zenith Bank – despite having exactly zero CBN and SEC authorisation. MMM tried to conceal its centralised nature by using individual bank accounts. The plot becomes more engaging at this point.

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Then the clean-up game came with The World Citizen Equity Partners Limited firm. A few days after MBA Forex registered on March 14, 2018, this firm, which purports to be a British corporation that arranges citizenship-by-investment for affluent people, registered in Nigeria on March 21, 2018. The screenshot below refutes WCEP’s later assertion that it had nothing to do with MBA Forex until December 2020.

Remember this since it will be crucial later.

In August 2020, Maxwell Odum moved 100 million of his MBA Forex shares to WCEP, which led to some renowned investors investing in the Ponzi scheme.

Former members of the House of Representatives and a former Nigerian ambassador to the European Union (EU) and African Union (AU), respectively, are the two persons named in the share transfer paperwork. It is still unknown why Hon. Ahmed Aliyu Wadada and Ambassador Usman Baraya chose to invest in a ponzi scam.

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In December 2020, MBA Forex suffered the same fate as many ponzi scams, leaving thousands of Nigerians in despair as their hopes of becoming wealthy vanished. Court rulings and regulatory steps to freeze accounts and potentially repay investors started to come in over the next weeks and months. The focus of the inquiry was Access Bank, which had housed the majority of the cash amassed by MBA Forex and Maxwell Odum.

Access Bank, however, made the decision to downplay the genuine part it played in encouraging the Ponzi scam. The bank claimed in a sworn declaration submitted by its lawyer that it had immediately closed all the wrongdoing accounts and that, in any event, the primary MBA Forex account only had a little over N200,000 remaining in it. Access Bank also lied under oath, claiming that World Citizen Equity Partners (Respondent 10) never had an account with the bank, in an effort to conceal the crucial role it played in allowing Maxwell Odum to escape punishment for the scheme.

This version of events was flatly refuted by an affidavit signed by Dickson Ukaha, a former customer relationship manager for Access Bank in Port Harcourt. In his sworn evidence, Ukaha said that months prior to the alleged sale by Maxwell Odum, many transactions totaling hundreds of millions of naira—the kind that would typically set off every bank’s AML alarm—had been made from the MBA Forex account to the WCEP account.

See pictures below:

xxxxx

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Just for confirmation, try to make a transfer (try, not actually make) into Access Bank account 1241618171 (the very account stated in the former Access Bank staff, Mr Dickson Ukaha sworn affidavit that it exits), World Citizen Equity Partners Limited will pop up!

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So we have a bank that deliberately allowed an unlawful investment scheme to defraud consumers of billions of naira without CBN or SEC licences, and then lied under oath to conceal the depth of its role in the MBA Forex mess after that!

On to the next on; Wema Bank.

too big to fail freelanews

Crime

Diesel tanker catches fire in Edo, destroys houses

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Five houses, two vehicles, four kiosks, and other items were burnt when a diesel tanker travelling through Benin-Akure Road lost control and spilled its content on the road.

According to a statement signed by the Public Relations Officer of the Edo State Police Command, Chidi Nwabuzor, on Saturday, no life was lost.

He also noted that the accident was caused by the recklessness of the tanker driver.

He said,” Today, Saturday 19/11/2022 at about 13:50hrs, the Commissioner Of Police Edo State Command, Mohammed Dankwara, arrived at the scene of motor accident/ fire incident along Benin/ Akure Road by Owan Bridge, Sobe Town in Owan West Local Government Area Of Edo State, to assess the damage caused to houses and other properties by the reckless tanker driver of Automotive Gas Oil also known as diesel, and to sympathise with the victims of the inferno.

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“The CP, who was accompanied by CSP Isah Nasiru Hamisu, the Divisional Police Officer Ekiadolor Division; SP Chidi Nwabuzor, the Police Public Relations Officer; and other officers on arrival met CSP Joshua Esiolee, the Divisional Police Officer Sobe Division, Edo State at the scene of accident.

“The DPO conducted the CP round the areas engulfed by fire.

“During the preliminary investigation, it was revealed that the tanker driver was coming from Benin City heading to the Northern part of the country along Benin/Akure Road by Owan Bridge.

“The vehicle skid off the toad, spilled its content, caught fire, and burnt down five houses, four kiosks one Sienna Car, one Audi Car, one motorcycle and some unestimated items. So far, no life was lost, no one injured, and no one on admission at the hospital.

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“He then sympathised with the victims, informing them that the state government was aware of the unfortunate incident, and something needed to be done.

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“He, however, pray that this incident should not happen again and thanked the Okhomu Oil Company fire fighters for extinguishing the fire, stating that this patriotic act is in line with the community policing philosophy of the Inspector General Of Police, Alkali Baba Usman.”

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Crime

Lady cries out after lover kidnaps five-month-old daughter

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A new mum, Chidiebere Ogechukwu, narrates how she hasn’t seen her baby, Chidiebere Chidera Gabriella, for a while because her lover, Ifeanyi Christopher Obiora, took her away.

She said that she met Obiora in the south-east and he proposed marriage to her.

Obiora said he wanted to meet her people which he did and when she said she wanted to meet his people, he agreed but started acting awkward when she told him she was pregnant.

Ogechukwu, who is 25 years old, said Obiora stopped picking her calls, as well as that of her family members afterwards.

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Obiora later showed up after she had the baby. One day, on the pretext of preparing her for the visit of his family members, he took her to a hair salon and took their baby out. Since then, she hasn’t seen her baby.

Ogechukwu is seeking help to get her five-month-old baby back.

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Crime

16-year-old boy rapes brother’s wife and nine other ladies in Ondo

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16-year-old boy, simply identified as Precious, has been arrested by men of the Ondo state security outfit, codenamed Amotekun, for allegedly raping his brother’s wife and nine other women in the state.

The teenager is said to have walked into the bedroom of his brother, who was out of town for work, where he saw the wife naked and sleeping, and then took advantage of her.

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Precious, while being paraded before newsmen at the command’s headquarters on Friday, November 11, admitted to committing the crime and confessed to having raped nine other girls at Laosun, a farm settlement in Ondo West local government area.

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“In Laosun, I have raped nine girls. Some of them are 19 or 25 years, in the night, I will go into their rooms and start sleeping with them. I do not use gun or knives to threaten them. Sometimes I would be caught and they would beat me and leave me. I have been arrested before. I was arrested for stealing 25 litres of palm oil. I wanted to gather money to use it to buy phone. I came to the house and saw my brother’s wife sleeping naked. I went into the room and slept with her.” He said.

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