Evolving Money Laundering Trends in Malawi

New Trends in Money Laundering

Money laundering is an ongoing challenge for financial institutions and law enforcement agencies worldwide. In Malawi, new trends and typologies have emerged, making it essential to stay informed about the evolving nature of these schemes.

Business Email Compromise (BEC) Fraud

• Definition: Hackers use email impersonation to trick victims into transferring funds.
• Examples:
  • Fraudsters create email addresses similar to those of overseas suppliers.
  • Victims are instructed to make urgent fund transfers to fraudulent email accounts.

Use of New Payment Methods (NPMs)

• Definition: Fraudulent claims by merchants using Electronic Point of Sale (POS) devices and collusion between debit/credit cardholders and merchants.
• Examples:
  • Merchants use POS devices to make unauthorized transactions.
  • Collusion between cardholders and merchants results in fraudulent charges.

Typologies of Money Laundering

Typology 1: Collusion between Bank Officials and Businesses

• Definition: Bank officials collude with foreign nationals to externalize funds without supporting documents.
• Case Study: A syndicate involving bank officials and foreign nationals externalized over K4 billion without supporting documents.

Typology 2: Money Laundering using Business Email Compromise

• Definition: Hackers use email impersonation to trick victims into transferring funds.
• Case Study: A Malawian was tricked into transferring funds to a fraudulent email account, which was impersonating an overseas supplier.

Conclusion

These new trends and typologies highlight the evolving nature of money laundering schemes in Malawi. As technology continues to advance, it is crucial for financial institutions and law enforcement agencies to stay ahead of these emerging threats.