Financial Crime World

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Money Laundering Trends and Typologies in Malawi

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Introduction

This report highlights several continuing trends and emerging typologies in money laundering, specifically covering the period under review.

The following are some of the continuing trends in money laundering in Malawi:

Theft of Public Funds

Senior public officials are abusing their powers by authorizing payments without validation of supporting government instructions. They create private businesses and use mobile banking to transfer funds to their personal accounts, which are then used for real estate, motor vehicles, and luxury lifestyles.

  • Creating private businesses to launder funds
  • Using mobile banking to transfer funds to personal accounts
  • Abusing power to authorize payments without validation

Payment of Salaries to Ghost Workers

Perpetrators open bank accounts that receive payments with transaction descriptions from various Government ministries and departments. These accounts are abandoned after withdrawing the funds.

  • Opening bank accounts to receive payments from government ministries and departments
  • Withdrawing funds and abandoning the account

Case Studies

The following are some case studies of money laundering in Malawi:

Theft of Malawi Government Funds by Senior Public Official through Fictitious Payments

A senior public official stole over MK350 million by authorizing payments to a business registered in the name of his girlfriend, which received 9 payments amounting to over MK340 million. The official used mobile banking to transfer funds from the business account into his personal account.

  • Authorizing payments to a fictitious business
  • Using mobile banking to transfer funds to personal account

Payment of Salaries to Ghost Workers

Bank accounts were opened and used to receive payments with transaction descriptions from various Government ministries and departments. These accounts were funded twice only with funds from Government, abandoned after withdrawing the funds.

  • Opening bank accounts to receive payments from government ministries and departments
  • Withdrawing funds and abandoning the account

Indicators

The following are some indicators of money laundering in Malawi:

Business Accounts Receiving Huge Amounts of Funds Transfers Inconsistent with Business Profiles

Business accounts receiving huge amounts of funds transfers inconsistent with business profiles.

  • Large volumes of transactions
  • Transactions inconsistent with business profile

Deposits Followed by Transfers to Personal Accounts

Deposits followed by transfers to personal accounts.

  • Deposits made into a business account
  • Transfers from the business account to a personal account

Account Transactions Inconsistent with Customer Profiles

Account transactions inconsistent with customer profiles.

  • Transactions inconsistent with customer profile
  • Suspicious transactions

Preferential Use of Mobile Banking to Transfer Funds Through Mobile Banking by Targeting Daily Limits

Preferential use of mobile banking to transfer funds through mobile banking by targeting daily limits.

  • Using mobile banking to transfer large amounts of funds
  • Transferring funds in excess of daily limits

Use of Third-Party Accounts in an Attempt to Make the Transactions Look Legitimate

Use of third-party accounts in an attempt to make the transactions look legitimate.

  • Using a third-party account to launder funds
  • Making the transactions appear legitimate

Actions Taken

The following actions have been taken to combat money laundering in Malawi:

  1. Arrests
  2. Freezing
  3. Restraining
  4. Preservation