IMF Seeks Tighter Checks on Kenyan Banks Amid Money Laundering Concerns

Richard Marley
July 26, 2022
3 minutes read
218

The International Monetary Fund (IMF) is tightening the checks to prevent money laundering and wants stronger controls on bank transactions in Kenya

According to a report by an IMF team, Kenya should use financial intelligence tools to increase checks on the risk of money laundering related to corruption in banks and other higher-risk industries.

“Anti-money laundering and counter financing of terrorism supervision should be intensified to mitigate corruption-related money laundering risk in banks and other higher risk sectors and make greater use of financial intelligence,” the IMF team said.

Recently, Kenya has seen an increase in alleged money-laundering operations, leading to the seizure of billions of shillings from businesses and people who were unable to account for their income.

For instance, the State has this year seized from Nigerian citizens and businesses a total of roughly Sh15 billion, most of which is thought to have come via card fraud or remittances made by payment service providers.

The startup company Flutterwave was the target of the largest cash haul from the west African country; according to Kenyan officials, Sh6.2 billion was found in 62 bank accounts as part of money-laundering and card fraud schemes. On the grounds that the money was perhaps used in a money laundering operation, the Asset Recovery Agency also seized over Sh108 million from a woman living in Kiambu County last December.

According to court documents, the agency said that between August and November of last year, Tebby Wambuku Kago and a friend—Felesta Nyamathia Njoroge and a sister Jane Wangui Kago—received Sh260 million from Belgian Marc De Messel through two accounts at Equity Bank. In his declaration paperwork, the Belgian, a bitcoin trader, stated that the funds were a gift.

As per a recent report from the US State Department, warnings were issued due to laxity among the Kenyan officials in the prevention of money laundering, with officials tipping the suspects to move assets before the seizure.

While Kenya’s proximity to Somalia has made it an “attractive destination for funds from unregulated Somali sectors,” the annual International Narcotics Control Strategy Report (INCSR) suggested mobile lending platforms on Safaricom’s M-Pesa system such as Mshwari and KCB-M-Pesa were not strictly regulated.

A team of 19-country Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) will file an evaluation report on the effectiveness of Kenya’s financial systems in September as per expectations. The regional watchdog will track the laws of the country in fighting against terrorist financing and money laundering.

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Along with the rise in virtual and remote work, the number of cases of recruitment fraud is increasing at an unprecedented pace, urging authorities to take decisive action against criminals. Especially the pandemic resulted in huge mass layoffs giving setbacks to many sectors, ultimately creating massive inflation across the globe.

Now that the pandemic’s effects are diminishing, 97 million new job roles are to be expected by the next year, which will expedite fraudulent practices in the talent acquisition sector. Companies should be on their guard and implement a joint action plan to counter rising recruitment scams to secure their onboarding process.

How do Online Recruiting Scams Work?

The scammers fraudulently use an established company’s name, logo and even the details of real employees working in human resource departments to post jobs on recruiting websites or other social media platforms.

Keeping their credentials almost identical to the official company’s details, they send emails to job-seekers or post fake jobs. As soon as interested candidates apply, they conduct interviews to get sensitive information about candidates through telephonic or on-site interviews.

Through fake interviews and telephonic/email conversations, criminals ask for sensitive personal information, particularly social security, ID number and bank account details that job seekers often provide, paving the way for identity fraud.

In some cases, the scammers even seek money from the candidates in the name of background checks or certifications which directly cost them financial losses. In the US alone, users lost $86 million due to fake job opportunities posted on the internet.

Spotting the Signs of Recruitment Fraud

Recruitment fraud is the most unfortunate part of modern job hunting, where criminals prey upon candidates’ eagerness to find work for their living by creating scam job opportunities.

Here are a few signs that can help job seekers spot fraudulent elements during the recruitment process:

Legitimate hiring managers and employers never ask applicants to make any financial transaction in their personal or company account. Always say No to any person who is asking you to send money for any recruitment purpose.

Although the majority of companies ask the candidates to provide their personal information, this step usually comes when the recruitment process is near to complete. Any person asking for sensitive information like bank account details, social security number, date of birth or identity details could be a scammer who must be turned down.

The majority of companies recruit their employees using their official email accounts; rather than contacting the person through common numbers or email addresses. Any job letter/offer from any such account could be a fake one.

Legitimate recruiters always follow a comprehensive plan to get all the relevant information about the candidate. Any person offering you a job without following a standard hiring process raises suspicions.
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2. UK Government – Raising Awareness of Employment Scams

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How Shufti Pro can Help

With transforming technologies, the overall market is growing to produce more job opportunities for interested candidates. As per the surveys, this number is expected to grow in the coming years, increasing recruitment fraud risks.

Through talent acquisition scams, criminals not only defraud job seekers but also damage the reputation of established companies. So it is in their higher interest to find and implement a credible solution that efficiently mitigates the risks of stolen identity or credentials.

Shufti Pro’s identity verification services present an ideal option to counter this problem through its advanced identification features, including document authentication, facial recognition and address verification.

Want to learn more about identity verification services for eliminating recruitment fraud?

Connect with a KYC Expert

IMF Seeks Tighter Checks on Kenyan Banks Amid Money Laundering Concerns

How Much Have Australians Lost to Scams?

How do Online Recruiting Scams Work?

Spotting the Signs of Recruitment Fraud

High Profile Criminal Cases of Recruitment Fraud

1. Europol Arrested a Gang Involved in €20 Million Employment Fraud

2. Hampton Gang Member Convicted for Pandemic Employment Fraud

Talent Acquisition Fraud and the Role of Law Enforcement Authorities

1. FBI Issued Instructions to Avoid Employment Scam

2. UK Government – Raising Awareness of Employment Scams

How Shufti Pro can Help

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