ECONOMY: Nigeria Tightens the Noose on Fraudsters

By Toye Olori Reprint | | Print |

Toye Olori

LAGOS, Jun 6 2003 (IPS) - Nuhu Ribadu is a tough police officer with a mission. Last week his men arrested 15 notorious fraudsters who have given Africa’s most populous nation a bad name over the years.

”We have gone after them and we got them. We got Fred Ajudua, we got Ade Bendel. The most important of the burst is the case of Brazilian scam involving 242 million U.S. dollars. The suspects are all in police cells and stations. This is the first step we are taking to round up these people and get them off the streets,” says Ribadu, who is in charge of the campaign.

The campaign, dubbed ”Operation Redemption”, is not only aimed to redeem Nigeria’s international image but also to clean up the country of fraudsters, says Ribadu, the chairperson of the Economic and Financial Crimes Commission (EFCC), which the government inaugurated in April.

Those arrested include a member of the House of Representatives who allegedly obtained 300,000 U.S. dollars and 750,000 Dutch Marks under false pretence from Munch Klause, the head of Munch Systemorganisation Company, in Germany.

All the suspects have been arraigned before a Lagos court.

The 419 Coalition, an international crime-busting watchdog, based in the United States, says the Nigerian scam had resulted in the loss of 5 billion U.S. dollars worldwide in 1996 and that the figure could be much higher now.

The scam, which has run since Nigeria’s oil booms in the early 1980s, is referred to as "Advance Fee Fraud" or "419 Fraud", after the relevant section of the criminal code of Nigeria.

It is a sophisticated operation. Often the target receives an unsolicited fax, email, or letter concerning crude oil deals or money that needs to be deposited urgently before it is squandered by the bad guy.

The victim is asked to pay up front advance fees until he, or she, either quits, runs out of money, or both.

Money stolen by 419 operations are almost never recovered from Nigeria, though there have been some indications of progress in anti-419 matters under the Obasanjo government, says the 419 Coalition.

President Olusegun Obasanjo, who won re-election last month, has warned that he would leave no stone unturned in his crusade against criminals ruining Nigeria’s economy.

”We will induce and encourage legitimate investors to participate in Nigeria. We will wage war against those who systematically destroy our economy. We have already embarked on a war against unpatriotic Nigerians who engage in Advance Fee Fraud. There will be no hiding place for those criminal individuals,” Obasanjo told a joint session of the National Assembly Thursday.

Most 419 letters and emails originate from or are traceable back to Nigeria. However, some originate from other nations, such as Ghana, Togo, Liberia, Sierra Leone, Cote d’Ivoire and South Africa.

”There are many Nigerians going about believing that they can earn a living without working for it,” Kanu Agabi, Nigeria’s minister of justice, told the 19-member Commission in April. He urged the agency to combat the vice.

At a three-day conference on ”Anti-Money Laundering in West African countries” which ended Thursday in Lagos, Joseph Sanusi, Governor of the Central Bank of Nigeria, warned that any bank that allows fraudulent transactions especially Advance Fee Fraud, will not only be penalised but will also be made to refund the amount involved to the victims.

Former Information Minister, Sam Oyovbaire who chaired the opening session of the conference, called for speedy trial of persons involved in financial crimes to deter others.

Nigeria’s Nobel Laureate, Wole Soyinka says the activities of the fraudsters have continued to cast a slur on the country’s image and have remained one of the major disincentives to foreign capital inflow to Nigeria.

”I want to call on Obasanjo’s government to explore all possible avenues to ensure that activities of advanced fee fraudsters are curtailed. It is embarrassing and works against the efforts of genuine Nigerian businessmen and women,” he was quoted as saying by the local media.

”Until government renews its determination to mobilise all its resources to wipe out this menace, its quest for foreign investment will remain an illusion, because no single foreigner will be interested in investing in Nigeria under this condition,” he said.

Last year Nigeria enacted three financial crimes laws, after the Financial Action Taskforce, a global watchdog for money laundering, threatened to blacklist it.

If blacklisted, it would have made it difficult for Nigerian banks to do business with international financial institutions as banks in a blacklisted country, are not allowed to open letters of credit.