Illicit Funds Trail Linked to Wildlife Crime Uncovered
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A recent investigation has revealed a trail of illicit funds originating from Hong Kong and linked to wildlife crime in Malawi. The funds, amounting to US$50,000, were allegedly transferred to a mining company with no clear connection between the directors of the company and the origin of the funds.
Indicators of Illicit Activity
The Financial Intelligence Authority (FIA) identified several indicators of illicit activity, including:
- A mismatch between economic activity, country of origin, or person and the money received
- International funds transfer receipts not tallying with declared business
- Unverified financial capital investments from other jurisdictions
- Collusion between exporters and local officials to circumvent pre-shipment inspection at the port of exit
Case Study: Wildlife Crime Syndicate in Malawi
In 2013, two individuals were arrested in Malawi after being found in possession of 781 pieces of ivory weighing 2,640 kg and valued at about US$6 million. The ivory was concealed in a consignment of cement bags.
The investigation revealed that one of the convicted individuals received funds from Hong Kong through Western Union. Hong Kong and China are known to be destinations for wildlife products. There was no mutually beneficial legal economic activity connecting the origin and beneficiary of the funds, leading investigators to believe that the funds were likely payments for wildlife products.
Other Indicators
The FIA also identified several other indicators of illicit activity, including:
- International funds transfer receipts not tallying with declared business
- Unverifiable connection between the originator and beneficiary of international funds transfers
- Concealment of illegal items or contraband in regular imports
Abuse of Public Funds
In addition to wildlife crime, the FIA also uncovered a scheme involving the abuse and theft of public funds. Pension funds were targeted, with some officials tampering with the system and inserting ghost pensioners on the payroll.
The lack of checks and balances, as well as laxity in transaction monitoring, allowed officials to manipulate the system and overpay some pensioners by figures exceeding 500%. The involvement of third parties in the system created an opportunity for officials to insert names and tamper with figures.