Two Nigerian executives of a Texas-based fintech, Ping Express, have been convicted of money laundering in the US in a matter involving US$167 million fraudulent transfers.
Ping Express CEO Anslem Oshionebo and COO Opeyemi Ode, both recently received 27-month prison sentences, and the company’s business manager, Aleoghena Okhumale, received a 42-month prison sentence for intentionally transferring criminal proceeds.
The fintech itself faces up to 5 years of probation and a $500,000 fine for the offence.
According to a statement released by US Attorney for the Northern District of Texas, Chad E. Meacham, the firm admitted it failed to maintain an effective anti-money laundering programme, and operated without a licence in at least five US states.
In its initial memo to state officials, Ping Express claimed that its anti-laundering policy limits first-time customer transactions at $499, cap daily transactions at $3,000, and cap monthly transactions at $4,500.
This was later found to be untrue after the company admitted it allowed more than 1,500 customers to violate these rules. For example, Ping Express allowed a customer to remit more than $80,000 in a single month—17 times the limit.
Within three years, the company transmitted more than $167 million overseas, including $160 million transmitted to Nigeria, some of which were proceeds from online romance scams, popularly known in Ghana as ‘Sakawa’.
The company also admitted it failed to seek sufficient details about the sources or purposes of the funds it helped to transmit, or the customers initiating the transmissions. By law, the company was supposed to report any suspicious transactions to regulators. But according to the company’s court filings, it failed to make a single anti-money laundering report in 3 years of operation.
One of Ping’s top customers, Collins Orogun—who is also facing 20 years in prison—admitted to using Ping Express to help other fraudsters commit romance scams. For example, an Indiana woman was deceived into sending $15,000 to a fake Irish captain she fell in love with. In his 2 years of operation, Orogun transferred over $1 million using Ping Express, without any checkmating from the fintech.
It is important to note that Ping Express has in the past used the services of very respectable Nigerian stars as its brand ambassadors, while they engage is such fraudulent activities as a norm.