Fraudulent Activities in Namibia: A Growing Concern
Introduction
A recent report by the Financial Intelligence Centre (FIC) has highlighted the increasing trend of fraudulent activities in Namibia, with potential losses totaling NAD 3,268,310,000.00 since inception.
Escalation of Fraudulent Activities
The FIC’s latest report reveals that the highest total potential monetary value of NAD 1,321,530,000.00 was recorded in 2019, indicating a significant escalation of fraudulent activities in the country.
Typical Reasons for Reporting Transactions as Suspicious
- Transactions inconsistent with customers’ financial profiles or behavioral patterns
- Unusual ownership structures of companies
- Significant cash withdrawals from government accounts
Cases and Investigations
A total of 44 cases were reported to the FIC, with the majority involving fraud. The potential monetary values cited in the table above emanated only from the Suspicious Transaction Reports (STRs) that featured Fraud as the potential predicate offense.
Common Indicators of Fraud
- Transactions inconsistent with customers’ financial profiles or behavioral patterns
- Unusual ownership structures of companies
- Significant cash withdrawals from government accounts
Perpetrators’ Techniques
Perpetrators are continually finding new methods to hide or conceal the illicit origins of funds they launder. Therefore, it is crucial for accountable and reporting institutions to constantly conduct risk assessments on their products, services, and customers to enable a proactive approach to combating money laundering, terrorist financing, and predicate fraud (ML/TF/PF) threats.
Case Studies
One such case study involved an employee who defrauded his employer by registering close corporations and opening bank accounts under their names. The employee used his position to fabricate fictitious invoices for “catering services rendered” to the company, processed and facilitated electronic payments to the “service providers,” and spent the funds on a high-end lifestyle.
- Law enforcement arrested the suspects and charged them with Fraud/Alternative theft.
- Three vehicles and a large cash amount were forfeited to the state.
Conclusion
The FIC’s report serves as a wake-up call for institutions and individuals alike, highlighting the need for increased vigilance and cooperation to combat fraudulent activities in Namibia.