So let’s say theoretically, you’ve got some good rackets going on. You’ve done some legal gun running traffic, some drugs, robbed a few banks or jewelry stores. Done some insider trading. The point is, you’re a professional criminal who’s only loyal to one thing, money. You’ve got some illegal businesses on your hands are doing really well. And now you’re literally drowning in cash. Great right. Wrong. Here’s the problem. Unless you can show that all the illegal money came from a legitimate source, like a regular business, for example. Then you and all the dirty money that you worked so hard to make are screwed.
If you just use the dirty money to fund your lavish lifestyle eventually, not necessarily right away, but eventually you’ll catch the attention of those pesky Nigerian government agencies like the EFCC, NPF, IRS and many others. But new problems are a good thing. It shows that you’ve been taking a fair amount of action. But if you don’t continue taking massive action, you’re probably going to end up in prison for up to a few decades with some hefty fines. We need a way to clean that money, to disguise it and the various origins of how we earned it. So now we can spend it on real estate, legitimate businesses and of course, to fund the lavish lifestyle that you rightfully deserve. We need to learn the game of one of the biggest industries in the world. We need to learn how to be laundrymen.
The Laundrymen – How to clean dirty money
Money laundering in Nigeria is the lifeblood to our profession of organized crime and corruption in Nigeria. Without it, there’s no point to committing our crimes in the first place. If the money we get isn’t usable and back in the good old days, cleaning the money you got from the criminal enterprise was pretty easy. Since banks get suspicious and have to report large sums of cash, that get deposited. You just send out a bunch of errand boys also known as laundry agents or smurfs. Once the laundry agents collected the day’s cash from their contacts, they’d worked their territory just like door to door salesmen going to different banks in their area and depositing small sums of cash. But not just any area will do. Too small of a town would mean that there wouldn’t be too many banks or customers and the tellers would be able to remember faces. Too big of a city and there would be long lines making the laundry agents a lot less efficient. So affluent suburbs being just the right balance for laundering. And with the simple system alone, if each laundry agent deposited just 50,000 naira into 20 different bank accounts each, which is very reasonable to do in one day, a mere 10 laundry agents could allow you to launder 10 million naira in dirty cash every single day.
But today it’s different. Law enforcement have realized just how vital money laundering is to us and have severely cracked down on it. They’re a lot stricter with bank statements or any business dealing in cash has to report transactions over 5 million naira, and they use algorithms to catch onto suspicious transactions, among other things. And although they barely made a dent in the money laundering world, it does raise the stakes. If you get caught with the postman being at 35 years or more in prison and fines up to three times the amount laundered. And just like any other business or industry, as the landscape evolves, so do the tactics. But the fundamentals on how to launder money are still the same.
1. We obviously don’t want people to know where the money came from.
So we have to conceal the ownership and the source of the money.
2. We want to change the money’s form.
If you have three million naira to wash, you don’t want to end up with the same three million naira bills. You want to consolidate that three million naira into, say, a thousand naira bills. This reduces the bulk and helps conceal the origin of it. At the same time,
3. Money laundering doesn’t work if a nosy detective can just follow the trail of money right back to you.
So we have to obscure the trail.
4. Dealing with tons of cash requires a ton of manpower.
And the more the manpower, the more opportunities for people to skim off the cash and says you can’t just call the police or sue someone if they stole dirty money from you. You have to have complete control over the process and the people. So now, you know, the fundamentals of laundering.
Let’s get into the actual wash
Before we can make dirty money look as if it came from a clean source, we have to get the dirty money into the banking system in the first place since we’re at the beginning of the money trail. This is where we’re most vulnerable and we are dealing with a lot of cash. One of the most popular ways to go about doing this is by using legitimate businesses as fronts for your laundering. It’s probably why a lot of holes in restaurants and drug trafficking areas only accept cash. The goal with fronts is for legitimate customers to walk in and out of the front door while dirty money sneaks in from the back by a restaurant, bar or retail store or any other business, then deals a lot in cash and carefully inject, a little extra cash into the business’s books every single day. If you do this gradually, you’ll be next to impossible to spot an extra 50,000 naira coming in daily for a restaurant that caters to hundreds of customers a day. That’s 18,250,000 naira a year of dirty money that all of a sudden, it looks like it came from your legitimate business. People also, will not raise any eyebrows, if you eventually scaled up to let’s say, 5 restaurants, that all happened to have 50,000 naira added to it every single day at that scale. That’s 91,250,000 naira every single year in safe, clean money going into your pocket. Now, before you get too excited, this is usually the part where laundry men get into trouble. They’ll think to themselves, oh, if I just sneak in extra dirty money and before you know greed sets in.
And then you try to get your local banker in on the scheme and then prison sets in.
large sums of cash to fronts like restaurants, raises the central bank’s antenna. It looks like one big money laundering machine. That’s not what you want there’s no way to win. Smaller sums of cash with more frequent deposits through my fronts fly right under the radar of the central banks. You know why? Because all of my fronts are legitimate.
Greed is what will attract the wrong attention. Greed is what will get you killed in the scheme. So don’t get greedy. Keep it gradual
Now let’s move on to step number two of the wash after dirty money is brought into the financial system. It’s time to hose off all that blood with some heavy soaping. This is where all of our work has been leading up to making our illegal money look like it came from a legal source. And the way we do this is by sending the dirty money through as many accounts as possible in our restaurant example, this is as simple as jacking up the receipts of what customers paid. So the dirty money is hidden into the customer’s transactions to make it look like it came from them. If you need to launder lots of money, it gets a little bit more complicated. But all it really entails is setting up a bunch of dummy companies around Nigeria in areas where the economy is stable and they don’t enforce money laundering as heavily. Since you chose areas where banks have a lot more secrecy and don’t have to disclose as much about their clients, a meddling detective trying to follow the money back to you will be out of luck. And once you’ve successfully obscured the trail leading back to you, it’s time for the fun part.
Spin dry the dirty cash
And just like that, by loading dirty money into the financial system and hosing out all the blood by sending the money through a series of hard to follow transactions, we’ve concealed the illegal origin of it. We’ve changed the money’s form. We’ve obscured the trail leading back to us and all the while maintaining complete control over the entire process. And now it’s time for the moment you’ve been waiting for with drawing that newly washed money from her accounts back into circulation. A as sweet taxable. And most importantly, legal income that you can spend on whatever your heart desires. And if you did your job right. Those vultures and law enforcement won’t be able to do anything about it, even if they’re suspicious, simply because they can’t trace the money back to you. Now I am compelled to give you this warning, since this is an underground illegal business, Laundrymen aren’t too keen on sharing their tips and secrets with the public. So everything we went over in this article is based on what law enforcement has found or in other words, is based solely on the people who’ve already been caught. So if you have the hopes of being a successful laundrymen, you better innovate and not just copy what everyone else has done or else you end up with the same fate prison and fines. Society is also gradually getting more and more cashless. And although cash won’t be going anywhere for a while. Crypto currencies have already taken over the criminal world by storm. Now, though, they’re not anonymous 100 percent of the time. It sure does make the job of an inspiring laundrymen a lot easier, with the law enforcement world still struggling to catch up. Well, whatever direction the moral of currency goes, the basics of laundering will always stay the same. Making illegal money look legal.
Different basic methods of money laundering in Nigeria
- cash removal from the country with couriers or money concealment in the cargo for the further repatriation through foreign banks
- passage of cash accounts, significantly exceeding the client’s actual capabilities
- multiple funds transfers to the account during the day by different persons
- transactions on a particularly large scale in the interests of third parties, for example, huge amounts exchanging
- contracts making with foreign companies for the various information and reference services
- personal information with knowingly distorted data; large amounts depositing in cash
- fictitious lease contracts and other contracts making for the supply of non-existent goods
- appointing trustees to manage funds held in accounts; securities purchase with their transfer to another bank
- concealment of the true money origin (accounts in foreign banks and cash placement in investment companies, an organization of fictitious companies, securities acquisition, antiques, overseas property, etc.)
- cash transfer to frontmen accounts with a breakdown of amounts
Causes of money laundering in Nigeria
- a high share of the population and business unofficial income, the “black market” existence
- the imperfection of mechanisms for activities of financial institutions monitoring, non-compliance with international financial management standards developed by specialized international organizations
- corruption among state executive, law enforcement, and judicial authorities
- impossibility or limitation of opportunity for financial information exchanging with foreign law enforcement agencies
- inadequate procedure for the establishment of financial and non-financial institutions, an opening of branches outside the country and the licensing of financial activity with not taking into account or improperly taking into account the necessity to identify the true company owners (especially when possession can be carried out by nominal holding)
- legislative securing of the financial transactions secrecy, insufficient requirements for transparency of financial transactions and ownership of assets
- miscalculations in the regulation of foreign exchange transactions and other transactions with cash; wide use of operations by enterprises, banks with offshore companies involving
- anonymous cash accounts and financial instruments, including shares and bonds, with the payment of “bearer” funds
- access of financial institutions to international trading centers for gold bars, trade in precious stones and metals.
Anti-money laundering
There are many global and regional organizations and programs to combat this type of criminal activity in the world. In 1997, the UN established the Global Program for anti-money laundering. Money laundering remains a very serious problem both in the FATF and GIABA member countries and others.
It’s difficult enough to determine the amount of laundered capital, although, according to experts, it’s about hundreds of billions US dollars a year. Nigeria is a member of Inter-Governmental Action Group against Money Laundering in West Africa (GIABA). It’s a regional group of the FATF (RGTF) type established in the Economic Community of West African States (ECOWAS) on December 10, 1999.
Nigerian government issued the first legislative Act against money laundering. It was Nigerian NDLEA Decree 48 in 1989. Later the government amended Decree 48 with the Money Laundering Decree in 1995 as it limited crimes of money laundering caused by incomes of illegal drug distribution. In 2000, the UN accepted the so-called Palermo Convention. After the ratification of Palermo convention, Nigeria replaced the Money Laundering Decree (1995) with the Money Laundering Prohibition Act (2003). Then it was replaced by Money Laundering Prohibition Act (2004).
Moreover, the government issued the Economic and Financial Crimes Commission (EFCC) Act (2004). Thus EFCC, NDLEA, and CBN were authorized to investigate allegations of money laundering and check bank accounts to assist in solving crimes. The mentioned act introduced the term ‘Designated Financial Institutions.’ They included activities as the Federal Ministry of Commerce or adequate regulatory authorities may denote occasionally. Later, National Assembly adopted the Money Laundering Prohibition Act (2011), and after signing by the President, it became the present Nigerian anti-money laundering law.
Besides, The Money Laundering Prevention and Prohibition Bill 2016 and the Criminal Matters Bill 2016 were issued to provide adequate punishment for money laundering and enough anti-money laundering agencies. Thus, according to the Section 15 of MLPA Act (2011), a person who committed money laundering activities faces imprisonment from 7 to 14 years. A company involved in money laundering is liable to a 100% fine of the received benefits for unlawful activity and annulment of the license.
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