Financial Crime World

Money Laundering in Ghana: Unmasking Typologies and Techniques

The Financial Intelligence Centre (FIC) in Ghana has published its first typology report on money laundering schemes, providing financial institutions and law enforcement agencies with valuable insights into prevalent money laundering techniques in the country. Based on Suspicious Transaction Reports (STRs) and feedback from investigative bodies from 2014 to 2018, the report outlines twelve distinct types of predicate offenses, each with various schemes and real-life case examples.

Background

The FIC was established under Section 4 of the Anti-Money Laundering (AML) Act of 2008 to assist in identifying proceeds of unlawful activities, combat money laundering and terrorism financing, and maintain information exchange with similar bodies worldwide. Mutual evaluation exercises by regional organizations like Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) and the Financial Action Task Force (FATF) identified the need for more comprehensive typology studies and the importance of continuous efforts to update and enhance the understanding of various money laundering schemes in Ghana.

Money Laundering Typologies and Techniques

The typology report covers twelve money laundering techniques and the various means and methods employed to launder illicit proceeds.

1. Fraud

  • Inheritance Fraud
  • Visa Processing Fraud
  • Football Profession-related Fraud
  • Misrepresentation/False Pretenses
  • Investment Fraud
  • Hacking into Accounts
  • Procurement Fraud
  • Bank Employee Fraud
  • Collusion between Bank Employee and Customer

Case study: 1.1 An amorous relationship between a fraudster and a victim on the internet, with the fraudster orchestrating a gold scam using inheritance as a bait, was presented in Case Study 1.1.

1.2 Trade Based Money Laundering

  • Supply of Shea Butter
  • Over invoicing of goods
  • Funds received for the purchase of high value goods

Case study: 1.2 Case Study 1.2 illustrates a visa application fraud, where an embassy inquired about the authenticity of a bank statement, and after some investigation, Bank A discovered the applicant had provided fake ID cards and conducted most transactions on the account using third parties.

1.3 Drug Trafficking

  • Legitimate businesses used as fronts
  • Association with drug traffickers

Case study: 1.3 Case Study 1.3 reveals that a footballer was perpetrating fraud by having his account receive several inflows from unrelated persons, but could not provide relevant documentation to prove the source and purpose of the funds.

1.4 Tax Evasion

  • Association with a politically exposed person (PEP)
  • Advance payment of taxes on new entities to sham-move goods

1.5 Counterfeiting of Currency

  • Fake currency deposited into the financial system
  • A new bank account receiving fake currency
  • A bank customer depositing fake currency

Case study: 1.6 Case Study 1.6 presents a hacking case where a hacker gained access to a victim’s bank account, conducted a cash withdrawal, and was eventually referred to law enforcement for further investigation.

1.6 Use of Foreign Bank Accounts

  • Transferring funds through a foreign bank account

Case study: 1.7 Case Study 1.7: A sole-sourced procurement contract was awarded to a company, with the bid originally priced much lower than the contract price. The profit made totaled US$3,730,500.

1.7 Insurance Fraud

  • False death claims
  • False hospitalization claims
  • False insurance claims

1.8 Securities Fraud

  • Investment fraud
  • Frequent use of funds for investment purposes

1.9 Cyber Crime

  • Phishing
  • Identity theft

The FIC’s typology report is crucial for financial institutions, investigative bodies, and policymakers to better combat money laundering and remain updated on the latest trends and techniques employed by money launderers. The report’s findings and recommendations will significantly contribute to Ghana’s efforts in strengthening its AML/CFT regime and meeting international standards set by organizations such as the FATF.