The News: Two Nigerian executives have been found guilty of flouting anti-money laundering policy while at Ping Express, a Texas-based fintech. The offenders, Anslem Oshionebo (Chief Executive Officer) and Opeyemi Odeyale (Chief Operating Officer) pleaded guilty at a US high court in Texas.
- According to court documents seen by CrestHub, $167 million were transferred from illegal sources, $160 million of which went to Africa.
- The court also found that Ping Express was making transfers in states within the US where it wasn’t licensed, including Nevada, New Jersey, Utah, West Virginia, and Connecticut.
- Other charges against the company include the promotion of ‘romance scam’ businesses.
Breakdown of the events:
- Within 3 three years of operation after it launched in 2014, the company had made unverified transfers of more than $167 million overseas, including $160 million transmitted to Nigeria. And while Know Your Customer (KYC) policies are existent to prevent money laundering and terrorist financing, Ping Express admitted to ignoring and verifying the identity of customers and the source of funding. Both CEO and COO were each sentenced to 27 months in federal prison.
- In another filing, the company violated its anti-money laundering policy with failure to limit first-time customer transactions at $499, cap daily transactions at $3,000, and check monthly transactions at $4,500. Shockingly, over 1,500 customers flouted these rules. In an instance, Ping allowed a customer to remit more than $80,000 in a single month – more than 17 times the stipulated limit.
- Romance scams were also rife in the company. A statement by the US Department of Justice reads , “One, Collins Orogun, admitted last week that he accepted a fee in exchange for transferring money for “romance scam” fraudsters and other criminals.
In one instance, an Indiana woman sent $15,000 to “Carson Jacks,” a purported oil roughneck in the Gulf of Mexico she fell in love with online, after he told her he’d contracted malaria. In another, a second Indiana woman sent $6,300 to “Thomas Ken,” a purported Irish ship captain she fell in love with online, to fix his ship. ”
Within 2 years, Mr. Orogun had to receive $1.3 million across several banks in the US and subsequently transferred the money to Africa through Ping. He faces up to 20 years in federal prison and is set to be sentenced next year.
Similarly, Ping’s IT/Business Development Manager, Aleoghena Okhumale, received a prison sentence of 42 months after pleading guilty to knowingly transmitting illegally-derived funds.
Ping Express now faces five years of probation and a fine of up to $500,000.
One too many money laundering allegations on Nigerian-related fintech companies.
- Earlier this month, 56 bank accounts belonging to the Nigerian fintech champion, Flutterwave Payment Technology Limited and 6 other businesses were frozen by a High Court in Kenya over money laundering. An investigator with Assets Recovery Kenya’s Asset Recovery Agency (ARA). —Isaac Nakitare said there was no evidence of retail transactions from customers paying for goods and services via Flutterwave.
- In the same token, Nigerian fintech companies, Kora Limited Technologies saw 14 of its Kenyan accounts frozen over the alleged illegal channelling of money into the country. Likewise, Kandon Technologies Limited was accused of fraud in Kenya. Together, they have been accused of pumping $51 million into the country.
The aforementioned startups with allegations in Kenya have since denied the allegations, citing that the allegations are politically motivated.