How Nigerians used fake documents to wire funds from Kenya to Citibank

A Nigerian company that was at the center of a multibillion-dollar money laundering investigation last year used forged documents to transfer millions of dollars from Kenyan banks to US bank Citibank.

RemX Limited, which was investigated and later cleared by the Asset Recovery Agency (ARA) over concerns of card fraud and money laundering, deceived the bank’s compliance teams and Kenyan regulators using bogus agreements, disclosures in a new case brought by the Hong Kong-based company in the High Court have revealed.

Whatsapp group messages between representatives of RemX and Lae Technologies Hong Kong Limited revealed in court how the payments service company forged documents to move billions of cash without arousing suspicion for four years.

Lae Technologies wants the Supreme Court to freeze the accounts of RemX and its subsidiaries pending resolution of a lawsuit demanding $88 million in credit for software sold to Nigerians.

Documents filed in court reveal a series of text messages from Nehikhare Eghosasere – the director of RemX – sharing details of how the regulatory network circumvented moving huge sums of money in and out of the country through Kenyan banks and Citibank.

To prevent questions from being investigated by Citibank’s compliance team, we’ll need to make sure the paperwork is very tight. Normally, how we’ve circumvented this in the past is to make sure that the name of the payee in the SWIFT instructions is the same as the name of the sender. That’s why we’ve set up RemX in several countries. multiple so that it is seen as a “transfer of the company’s own funds,” Mr. Eghosasere said in a Whatsapp message dated October 9, 2020.

Nigerian company registry shows that RemX is registered as Nehikhare Eghosasere and Demuren Olufemi Olukunmi, with its offices at 16C Ruxton Road, Ikoyi, an island in Lagos, the commercial capital of Nigeria.

The Kenyan entity of the same name is owned by Mr Eghosasere with 200 shares and Demuren Olufemi Olubukunmi who owns 800 shares, according to information available at the online business registration portal.

The intended purpose of the transactions is not clear in the chain of exchanges, but last year the ARA cited the company for moving illegal funds that could have been proceeds of crime.

“…I just want to put measures in place to ensure it’s sustainable and doesn’t get in trouble when Citibank starts asking questions. They usually come asking questions in 1-2 years after the deal lol. Just to present it to Citibank (whenever they ask questions), that would be great,” Mr. Eghosasere told his potential partners.

The two, along with Olubunmi Akinbanjo Akinyemiju, have operations across continents and have several companies registered in Kenya, the United States, the United Arab Emirates and Nigeria.

ARA investigations showed that the Lagos-based payments company and other companies registered under the same names received more than NIS 84 billion and sent NIS 78 billion between 2019 and last year through Equity Bank and UBA.

Their other companies that were part of last year’s investigation and listed as interested parties in the latest court battle include Pumicells Ltd, OIT Africa Ltd, Avalon Offshore Logistics Ltd, RemX Capital Ltd and Multigate Limited.

Equity Bank and UBA Bank could find themselves in trouble after revelations that the company used fake agreements to move billions, and failed know-your-customer (KYC) requirements aimed at curbing illicit cash flows and money laundering.

Kenyan banks are expected to alert the Financial Reporting Center (FRC) of suspicious transactions under anti-money laundering laws, including reporting large transactions and conducting customer due diligence.

ARA has since withdrawn the lawsuit against RemX in which the High Court filed orders to unfreeze Sh5.6 billion that was owned by the company.

is reading: Court lifts Sh5.6 billion dirty cash freeze linked to Nigerian politicians

Transactions in Kenya took place through multiple dollar accounts at Equity and UBA. However, the money sent to the US was transferred via money transfer through Citibank as the correspondent bank.

Egusasir said on the exchanges that local banks pose no risk to their operations, but Citibank has strict anti-money laundering (AML) rules that could get them into trouble.

Equity Bank is the sending bank, but Citibank is the correspondent bank. “Citibank always gives ‘headache’ to the sending (and receiving) banks,” Igusasir told the group.

The documents also revealed that prior to entering into the regulatory turmoil last year, Nigerians were keen to make Kenya a payments settlement hub, which could partly explain the huge amounts of foreign currency transferred during this period.

“RemX normally moves money globally all over the world. We are currently looking to set up our settlement center in Kenya, but they need us to get a transfer license anywhere else in the world… Does that make sense? So, we just Need a license in the easiest jurisdiction,” Mr. Igusasir.

The Central Bank of Kuwait and the Financial Reporting Center – the agency that tracks illicit funds – has maintained in the past that transactions by companies were illegal and that companies were not authorized to process payments in Kenya.

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