TYPOLOGIES OF MOΝΕΥ LAUNDERING THROUGH KIDNAPPING FOR RANSOM IN NIGERIA

M UNITY AND FAITH, PEACE AND PROGRESS

TYPOLOGIES OF MOΝΕΥ LAUNDERING THROUGH KIDNAPPING FOR RANSOM IN NIGERIA

MARCH 2025

TYPOLOGIES OF MONEY LAUNDERING THROUGH KIDNAPPING FOR RANSOM IN NIGERIA Table of Contents

ACKNOWLEDGEMENT 4

LIST OF ACRONYMS 5

Executive Summary 6

1.0 BACKGROUND 8

1. 1 Objectives 9

2. 2 Methodology 10

3. 0 Nigeria's Legal and Institutional frame work for Combatting Kidnapping for Ransom. 12

4. 1 Constitution of the Federal Republic of Nigeria (1999) 12

5. 2 Criminal Code Act (South) and Penal Code (North) 12

6. 3 Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Laws. 12

7. 4 Cybercrimes (Prohibition, Prevention, etc.) Act, 2015. 13

8. 5 State-Specific Anti-Kidnapping Laws. 13

9. 6-Armed Robbery and Firearms (Special Provisions) Act, 2004. 13

10. 7 Extradition Treaties and International Cooperation 13

11. 8 Enforcement and Agencies Involved: 13

12. 0 Geographical Heatmap for Kidnapping and Hostage Keeping in Nigeria 16

Geographical Heatmap for Kidnapping and Hostage in Nigeria. 17

12. 0 Typologies of Money Laundering through Kidnapping for Ransom 18

13. 1 The Use of Betting Platforms to Move Proceeds of Kidnapping for Ransom (KFR) 18

14. 2 The Use of Fintech Platforms to Move Proceeds of Kidnapping for Ransom (KFR) 19

15. 3 The use of Wire Transfer and Crypto Exchange to Move the Proceeds from KFR.. 20

16. 4 The use of Cash in moving the proceeds of KFR 21

17. 5 The Use of the Bank Accounts to Move the Proceeds of Kidnapping for Ransom 23

18. 6 Laundering Proceeds from Kidnapping for Ransom through Livestock 25

19. 7 Use of formal and informal sectors to move the proceeds of KFR (Joint investigation). 26

20. 8 Laundering of Proceeds from Kidnap Hostages into Spare Parts Business 28

21. 0 Generic Money Laundering Trends Associated with Kidnapping for Ransom. 30

22. 1 Other crimes linked to KFR in Nigeria 30

23. 2 Vulnerable Group Analysis. 31

24. 2. 1 Age. 31

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25. 2. 2 Vulnerable Group 31

26. 3 Proceeds of Crime from KFR in Nigeria 32

27. 4 Mode of Ransom Payment 32

28. 0 Nigeria's effort in mitigating KFR in Nigeria Based on the Survey Findings.. 35

29. 1 Military and Police Operations 35

30. 2 Anti-Kidnapping Legislation 35

31. 3 Community and Intelligence Collaboration 35

32. 4 School Safety Initiatives 36

33. 5 Technology and Surveillance 36

34. 6 Public Awareness and Reporting Mechanisms 36

35. 0 Challenges in Combatting Money Laundering through KFR in Nigeria 37

36. 0 Conclusion 39

37. 0 International Best Practice for Combatting KFR.... 40

38. 0 Recommendation for mitigating kidnapping for Ransom in Nigeria 42

Table of Figures

Figure 1: Geographical Heatmap for Kidnapping and Hostage in Nigeria. 17

Figure 2: Vulnerable age Analysis Deduced from Survey Response.. 31

Figure 3: Proceeds of Crime from KFR in Nigeria Deduced from Survey Response 32

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TYPOLOGIES OF MONEY LAUNDERING THROUGH KIDNAPPING FOR RANSOM IN NIGERIA

A publication of the Nigerian Financial Intelligence Unit

NIGERIAN FINANCIAL INTELLIGENCE U

NFIU

INTEGRITY & DILIGENCE

The Nigerian Financial Intelligence Unit (NFIU) is the central national agency responsible for the receipt of disclosures from reporting organizations, the analysis of these disclosures and the production of intelligence for dissemination to competent authorities. The NFIU is an autonomous unit, domiciled within the Central Bank of Nigeria and the central coordinating body for the country's Anti-Money Laundering, Counter-Terrorist Financing and Counter-Proliferation Financing (AML/CFT/CPF) framework.

No reproduction or translation of this publication may be made without prior written permission.

Applications for such permissions, for all or part of this publication, should be made to

The Director/Chief Executive Officer, Nigerian Financial Intelligence Unit

12, Ibrahim Taiwo Street, Aso Villa Abuja, Nigeria

1, Monrovia Street, Block 3, Wuse II, Abuja, Nigeria

(e-mail: info@nfiu.gov.ng)

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ACKNOWLEDGEMENT

We extend our profound gratitude to all those who contributed to the successful completion of this report on assessment of money laundering typologies through kidnapping for ransom in Nigeria. We would like to express our heartfelt appreciation to the following agencies for their tremendous support and contributions towards the completion of this project:

1. Defence Intelligence Agency

2. Department of State Service

3. Nigerian Communication Commission

4. Nigerian Police Force

5. The International Criminal Police Organization – National Central Bureau

6. The Office of National Security Adviser

This collaborative effort between government agencies is crucial in comprehending the intricate dynamics of money laundering through kidnapping for ransom, especially in the context of emerging technologies. The recognition of the high threat posed by money laundering through kidnapping for ransom, as identified in Nigeria's national inherent risk assessment of money laundering in Nigeria 2022, underscores the urgency and importance of this study.

The outcomes of this research are poised to elevate our collective understanding and response to the ever-evolving challenges posed by kidnapping activities. This report will serve as a vital resource for reporting entities and competent authorities, equipping them with the knowledge required to detect and combat kidnapping for Ransom cases effectively.

Finally, we would like to express our gratitude to all of the Nigerian Financial Intelligence Unit (NFIU) team members whose persistent work and commitment made this study possible. We appreciate their efforts to this project and their excellent dedication to professionalism and quality.

Thank you all for your support and contributions to this report on money laundering typologies through Kidnapping for ransom in Nigeria.

Hafsat Abubakar Bakari

Director/CEO

Nigerian Financial Intelligence Unit

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TYPOLOGIES OF MONEY LAUNDERING THROUGH KIDNAPPING FOR RANSOM IN NIGERIA LIST OF ACRONYMS AML Anti-Money Laundering CBN Central Bank of Nigeria CFT Counter Financing of Terrorism CPF Counter Proliferation Financing ML/TF Money Laundering/ Terrorism Financing DIA Defence Intelligence Agency DSS Department of State Services EFCC Economic and Financial Crimes Commission INTERPOL- NCB International Criminal Police Organisation National Central Bureau ISWAP Islamic State of West African province KFR Kidnapping for Ransom NFIU Nigerian Financial Intelligence Unit ΝΙΑ National Intelligence Agency NCC Nigerian Communication Commission NPF Nigeria Police Force NSDC Nigerian Civil Defence Corps ONSA Office of National Security Adviser SCUML Special Control Unit against Money Laundering SEC Securities and Exchange Commission STR Suspicious Transaction Report CPF Counter Proliferation Financing EFCC Economic and Financial Crimes Commission UNODC United Nations Office on Drugs and Crimes LEA Law Enforcement Agencies

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TYPOLOGIES OF MONEY LAUNDERING THROUGH KIDNAPPING FOR RANSOM IN NIGERIA Executive Summary Introduction

The growing problem of Kidnapping for Ransom (KFR) in Nigeria poses a significant threat to national security and economic stability. KFR is defined as the unlawful abduction of individuals with the intent to demand a ransom. This crime is intricately connected to other serious organized criminal activities and money laundering, which undermine the integrity of financial systems. This report utilizes a triangulated research method that combines qualitative and quantitative data along with a comprehensive descriptive analysis of KFR in Nigeria. It covers various aspects, including the legal framework, geographical hotspots, demographics, financial implications, and recommendations for effective countermeasures.

Problem Statement

KFR has become a pervasive problem in Nigeria, impacting various societal sectors and leading to substantial financial losses. Key issues include:

1. Rising Incidents: Since 2019, there have been over 735 mass abductions, with significant ransom payments reported.
2. The cash-based economy and use of informal channels complicate the tracing of illicit financial flows.
3. Complex Criminal Networks: The involvement of organized crime such as terrorist financing, human trafficking, illicit drug trafficking and the exploitation of weak regulatory frameworks exacerbate the problem.

Solutions

To combat KFR and its associated money laundering activities effectively, the following but not limited to below multifaceted strategies are recommended:

4. Government and Policy Makers:

o Develop a comprehensive national strategy integrating law enforcement, financial regulation, and community involvement.

Ο Allocate resources for KFR-related operations and establish specialized AML courts for financial crime cases.

5. Reporting Entities • Strengthen Know-Your-Customer (KYC) procedures and enhance suspicious transaction reporting to improve detection of ransom-related financial activities.

Ο Invest in Al-based monitoring tools to identify patterns indicative of KFR. 6. Telecom and ICT

Ο Enforce SIM card registration and monitor digital platforms to reduce anonymity in criminal communications. Collaborate with law enforcement to provide call records and geolocation data for investigations. 7. Law Enforcement

o Enhance intelligence gathering using technology and improve interagency cooperation to facilitate prosecutions. • Combat corruption and ensure accountability within law enforcement agencies.

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8. Regulatory Bodies

○ Implement risk-based AML/CFT regulations and conduct periodic inspections of financial institutions to ensure compliance with standards. 9. Civil Society Organizations Launch community awareness campaigns to educate the public about the dangers of ransom payments and encourage reporting of suspicious activities. 10. International Cooperation

Ο Strengthen regional partnerships and engage with international entities for intelligence-sharing and joint operations against cross-border KFR activities.

Conclusion

Addressing KFR in Nigeria requires an urgent, coordinated response that involves multiple stakeholders across various sectors. By implementing the proposed recommendations contained in the report, stakeholders can significantly reduce the impact of KFR, enhance the resilience of financial systems, and protect vulnerable populations. Continuous training, technological investment, and community engagement are essential to building an effective framework for combating KFR and associated money laundering activities.

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1. 0 BACKGROUND

Article 1 of the Hostages Convention states that any person who seizes or detains another person (referred to as the "hostage") and threatens to kill, injure, or continue to detain that person in order to compel a third party—such as a state, an international intergovernmental organization, a natural or legal person, or a group of people—to take or refrain from taking any action as a condition for the hostage's release, commits the offense of hostage-taking¹.

In the same light, Kidnapping for Ransom (KFR) is the unlawful seizure, detention, or confinement of a person with the intent to demand payment or other benefits for their release. This act constitutes a serious offense under both national and international legal frameworks and is recognized as a predicate crime to money laundering because it generates substantial illicit proceeds that perpetrators often seek to disguise or integrate into legitimate financial systems2.

The United Nations Office on Drugs and Crime (UNODC) defines kidnapping for ransom as a criminal act where victims are abducted and held against their will to compel a third party to provide money or other concessions in exchange for their release. In Nigeria, kidnapping for ransom is criminalized under various laws, including the Terrorism (Prevention and Prevention) Act 2022 which addresses acts linked to organized crime and terrorism³.

The trends and dynamics of kidnapping in Nigeria have escalated significantly, affecting a wide range of victims, from high-profile individuals such as politicians and business people to low- income individuals. Geographic distribution shows that kidnapping is particularly common in the In the Northwest and North-Central geopolitical regions. The actors involved in these kidnappings include criminal gangs, armed groups, and insurgent organizations like Boko Haram and ISWAP4.

The roots of kidnapping for ransom in Nigeria can be traced back to the 1990s, with the emergence of militant groups in the Niger Delta region. These groups used kidnapping as a tactic to pressure the government for resource control and economic development. This crime has become a pervasive security challenge in Nigeria, undermining national stability and economic growth. KFR, perpetrated by organized criminal groups, terrorist organizations, and opportunistic individuals, generates substantial illicit proceeds that often require laundering to integrate into the legitimate economy.

The 2022 National Inherent Risk Assessment of money laundering (ML) in Nigeria classified KFR as a HIGH-risk predicate crime for money laundering. This rating was based on the sophistication of criminal actors involved, the substantial proceeds generated from the crime,

1 https://www.fatf-gafi.org/content/dam/fatf- gafi/reports/organised%20maritime%20piracy%20and%20related%20kidnapping%20for%20ransom.pdf 2 Financial Action Task Force (FATF). International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (The FATF Recommendations). 3 United Nations Office on Drugs and Crime (UNODC). Manual on Kidnapping and Organized Crime. 4 https://www.unodc.org/conig/uploads/documents/NOCTA Web Version 25.09.2023.pdf https://jssidoi.org/ird/uploads/articles/16/Agbaje Toward querying the national peril of kidnapping in Ni geria.pdf

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and its extensive scope. Furthermore, a residual risk assessment conducted in 2023 rated KFR as MEDIUM, taking into account the controls implemented to mitigate the crime.

To further understand the ML trends of KFR, this report provides an understanding of the main typologies, of laundering proceeds derived from the offence. Recommendations for combating these interconnected crimes are also outlined.

1. 1 Objectives

The objectives of the study are as follows;

i. To identify financial flows through tracing the movement of funds generated through kidnapping for ransom and understanding how they are laundered through various system. This involves identifying channels, mechanisms, and actors hiding or cleaning the illicit proceeds.

ii. To gain a better understanding of the tactics used by kidnappers and affiliated groups (criminal or terrorist) to collect ransom, use middlemen, or exploit weak points in the financial system. Exploring the connection between kidnapping for ransom and other criminal activities.

iii. To identify the vulnerable channels in Nigeria's financial and non-financial systems that allow for the laundering of ransom payments.

iv. To improve the understanding of law enforcement, financial institutions, and regulators to the patterns of ML/TF related to kidnapping for ransom to better detect and disrupt these financial activities.

v. To provide insights and understanding to policymakers and regulatory bodies on areas that need stronger controls and interventions based on current findings.

vi. To raise the awareness of financial institutions, government agencies, and the public about the methods used by criminals to launder ransom payments and the risks associated with the financing of terrorism through the crime.

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1. 2 Methodology

To effectively identify the various types of money laundering associated with kidnapping for ransom in Nigeria, a working group was established and inaugurated by the management of the Nigerian Financial Intelligence Unit (NFIU). This group comprised experts from security, law enforcement, and intelligence agencies. The report utilized a triangulation research method, which combined qualitative and quantitative data from multiple datasets, including credible reports and expert opinions to meet its goals and objectives. A purposive sampling technique was employed to gather expert insights from various agencies to ensure the highest quality of information.

A structured survey questionnaire was distributed among the working group members, returned validly by all respondents, and analysed using a descriptive analysis method. The scope of datasets used in this report is from 2019 to 2024.

The working group consisted of experts from the National Central Bureau of International Criminal Police Organization (INTERPOL-NCB), the Nigerian Financial Intelligence Unit (NFIU), Department of State Service (DSS), Nigerian Police force (NPF) Nigerian Communication Commission (NCC), Office of National Security Adviser (ONSA), and Department of Intelligence Agency.

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In 2014, Boko Haram seized more than 270 girls from a school in Chibok, north-east Nigeria, triggering global outcry.

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2. 0 Nigeria's Legal and Institutional frame work for Combatting Kidnapping for Ransom

The legal framework for addressing kidnapping for ransom in Nigeria is established through various laws and regulations at the federal and state levels, aimed at both deterring and prosecuting the crime. This framework includes constitutional provisions, criminal laws, counter-terrorism statutes, and state-specific laws.

2. 1 Constitution of the Federal Republic of Nigeria (1999)

While the Constitution does not specifically mention kidnapping, it guarantees the right to life (Section 33) and the right to personal liberty (Section 35). Kidnapping violates these constitutional rights, making the crime prosecutable under broader human rights provisions.

3. 2 Criminal Code Act (South) and Penal Code (North)

Criminal Code Act (Sections 364–371): In Southern Nigeria and the Federal Capital Territory Abuja, kidnapping is treated as a felony under the Criminal Code. It defines kidnapping and prescribes severe penalties, which may include life imprisonment or even the death penalty in some cases.

Penal Code (Northern Nigeria): The Penal Code similarly prohibits kidnapping and unlawful detention which are covered under sections related to abduction and wrongful confinement (sections 272-275). The penalties for kidnapping vary but can include long-term imprisonment.

4. 3 Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Laws

Nigeria's AML/CFT framework, spearheaded by agencies like the Economic and Financial Crimes Commission (EFCC) and the Nigerian Financial Intelligence Unit (NFIU), applies to ransom payments as these payments are often laundered through financial institutions or used to fund terrorism. Relevant laws include:

I. Money Laundering (Prohibition and Prevention) Act, 2022: This Act criminalizes the laundering of proceeds from crimes, including kidnapping for ransom.

II. Terrorism (Prevention and Prohibition) Act, 2022: Kidnapping for ransom is often linked to terrorism financing in Nigeria, particularly in regions affected by insurgency. The Act is a key legal instrument used to prosecute acts of terrorism, including kidnapping where ransom money is used to finance terrorist activities.

Under the Act (Sections 24), persons involved in kidnapping for ransom, particularly when linked to terrorist organizations, can be prosecuted for terrorism-related offenses. Sections 79-81) of the law allows for the freezing of bank accounts, seizure of properties, and other penalties associated with the laundering of ransom money.

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2. 4 Cybercrimes (Prohibition, Prevention, etc.) Act, 2015

Given that ransom demands often involve electronic communications, the Cybercrimes Act plays a role in combating kidnapping for ransom. The Act criminalizes the use of digital platforms for extortion or threats of violence, which often overlap with kidnapping activities.

3. 5 State-Specific Anti-Kidnapping Laws

Many Nigerian states have enacted their own specific anti-kidnapping laws to complement federal laws. Some of these laws are more stringent, imposing harsher penalties such as the death penalty or life imprisonment. For instance:

I. Lagos State Kidnapping Prohibition Law, 2017: This law prescribes the death penalty for kidnappers whose victims die in captivity and life imprisonment for kidnappers who receive ransom without causing the victim's death.

II. Anambra State Anti-Kidnapping Law: Anambra imposes stiff penalties, including the demolition of properties used for harbouring kidnapped persons.

III. Rivers State Kidnapping (Prohibition) Amendment Law, 2015: Similar to Lagos, Rivers State imposes capital punishment for kidnappers whose actions result in death.

4. 6-Armed Robbery and Firearms (Special Provisions) Act, 2004

Where firearms are involved in the commission of kidnapping, the Armed Robbery and Firearms (Special Provisions) Act can be applied. This Act prescribes severe penalties, including the death penalty, for armed robbery and associated crimes, which may include kidnapping.

5. 7 Extradition Treaties and International Cooperation

Nigeria has signed various extradition treaties and participates in international cooperation to combat cross-border kidnapping. Since kidnapping rings sometimes operate across borders, international collaboration is essential, particularly when the proceeds of ransom payments are moved through international financial systems.

6. 8 Enforcement and Agencies Involved:

7. Nigeria Police Force (NPF): The NPF plays a leading role in investigating and apprehending kidnappers.

8. Department of State Services (DSS): The DSS is often involved in high-profile kidnapping cases, particularly those with national security implications.

9. Economic and Financial Crimes Commission (EFCC): The EFCC is key in investigating ransom payments linked to money laundering and terrorist financing.

10. Nigerian Armed Forces: In areas affected by insurgency, the military is often deployed to rescue kidnapped victims, particularly in northern Nigeria.

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Nigeria has strong laws at both federal and state levels, along with counter-terrorism and money laundering regulations, to address the issue of kidnapping for ransom. However, despite this, the practice continues to thrive in the country. Since 2019, there have been 735 mass abductions in Nigeria, with 3,620 people abducted in 582 kidnapping cases between July 2022 and June 2023. It is estimated that about 5 billion naira ($3,878,390) was paid in ransoms during this period. To effectively combat this issue, it is essential to track the financial transactions of those involved in these activities. This requires a coordinated effort involving financial regulators, other financial institutions, non-financial businesses, security agencies, intelligence agencies, law enforcement, and the judiciary to ensure the detection, investigation, and conviction of the individuals responsible for these crimes.

6 https://www.aljazeera.com/features/2024/4/3/why-mass-kidnappings-still-plague-nigeria-a-decade-after- chibok- abductions#:~:text=Since%202019%2C%20there%20have%20been,(%243%2C878%2C390)%20paid%20in%20r ansoms

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On March 28, 2022, gunmen attacked the crucial rail link between the capital, Abuja, and the northern city of Kaduna. The assault occurred in the evening, causing a train carrying 362 passengers to halt. At least nine passengers were reported dead as a result of the attack, and the state rail company indicated that approximately 168 people were missing afterward.7

7 https://www.bbc.com/news/world-africa-61250213

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3. 0 Geographical Heatmap for Kidnapping and Hostage Keeping in Nigeria

According to the DIA respondent, the most vulnerable states for kidnapping for ransom are classified into Northern and Southern regions. States identified in the Northern region include Kaduna, Zamfara, Katsina, Niger, Kogi, and Borno, while states in the Southern part are Ondo, Rivers, Delta, Imo, and Edo.

The respondent also identified the most abused routes for kidnapping for ransom in and out of Nigeria according to regions: Northern Region (Zamfara, Sokoto, Gusau road, Katsina-Birnin Kebbi road, Kaduna-Abuja Road, Niger-Abuja, Abuja-Lokoja highway) and Southern states (Benin-Lagos highway, Port Harcourt-Owerri Road, Enugu-Onitsha, Ibadan-Lagos, Ibadan-llorin highway).

Based on DIA experiences, the modes of transporting hostages for kidnapping for ransom in and out of Nigeria are the use of motorcycles through densely forested areas and the use of vehicles through forested areas that provide cover and concealment. Additionally, the modes and techniques of hiding hostages include the use of isolated houses within a village or community, isolated motels, built-up areas at night for safekeeping, and criminal caves that are difficult to penetrate.

According to the Nigerian police force respondents, Niger, Imo, Kaduna, Anambra, FCT, Kogi, Katsina, Zamfara, Rivers, Delta, Borno, and Yobe are the most vulnerable states for kidnapping for ransom.

The modes of transporting hostages for kidnapping for ransom in and out of Nigeria, based on NPF experiences, are via illegal porous land borders. The modes and techniques of hiding hostages identified include deeply forested regions, especially abandoned forest reserves.

Respondents from NFIU stated that Kaduna, Niger, Kano, Zamfara, Sokoto, Kebbi, Nasarawa, Plateau, and Taraba are the most vulnerable states for kidnapping for ransom. The most abused routes, according to NFIU, are Abuja-Kaduna, Zaria to Funtua, Abuja-Mina, Zamfara-Sokoto Okene/Benin, Kaduna/Abuja, Kaduna/BirninGwari, Makurdi/Katsina-Ala/Jalingo, Lagos/Benin, Katsina/Jibya/Kaura Namoda, Funtua/Gusau/Sokoto, Owerri/Port-Harcourt, Enugu/Okigwe/Aba/Port-Harcourt, Minna/Zungeru/Kontagora highways.

Based on NFIU experiences, the modes of transporting hostages for kidnapping for ransom in and out of Nigeria are motorcycles and by foot. NFIU respondents also stated that most of the techniques and modes that kidnappers use for their hideouts for hiding hostages are villages far from town or on mountains in some places.

To buttress above responses, the organized crime in Nigeria: a threat assessment report 2023 reported that In December 2020, 344 schoolboys were kidnapped in Kankara, Katsina State and in a similar incident in February 2021, 277 schoolgirls were abducted from a boarding school in Jangebe, Zamfara State. Similarly, a series of further attacks occurred in schools across Kaduna, Katsina, Kebbi, Niger, and Zamfara States.

8 https://www.unodc.org/conig/uploads/documents/NOCTA Web Version 25.09.2023.pdf

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Geographical Heatmap for Kidnapping and Hostage in Nigeria

Sokoto

Katsina Kebbi Zamfara

Yobe Borno Kano Kaduna Niger Plateau FCT Nassarawa Taraba Kogi Ondo Edo

Anambra Delta Imo Rivers

HIGH MEDIUM LOW

Figure 1: Geographical Heatmap for Kidnapping and Hostage in Nigeria

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4. 0 Typologies of Money Laundering through Kidnapping for Ransom

5. 1 The Use of Betting Platforms to Move Proceeds of Kidnapping for Ransom (KFR)

Case Study 1

A betting platform, Platform X, filed a Suspicious Transaction Report (STR) with the Nigerian Financial Intelligence Unit (NFIU) concerning a customer identified as Customer A. Customer A is a 24-year-old male residing in Bwari, Abuja. He received a sum of N351,000 in his betting wallet, which was ransom money paid by the families of a kidnap victim. The payment was instructed to be deposited into the betting wallet.

After receiving the funds, Customer A attempted to transfer the money to his bank account at Bank A, but the platform declined the transaction. The NFIU reviewed the STR and forwarded the intelligence report to a law enforcement agency for further investigation.

Indicators Large, one-time deposits into a betting wallet that are inconsistent with the customer's usual behavior or financial profile. Funds deposited into a betting wallet without any apparent intention to gamble or place bets. Funds originating from unidentified or suspicious sources, such as direct instructions to deposit ransom payments into a betting wallet. Attempts to move large sums out of a betting wallet shortly after receipt, particularly when the transaction is declined due to suspicious activity. Residency in high-risk areas known for KFR activities. Young individuals with limited financial resources receiving large sums of money without plausible explanations

Source: NFIU

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6. 2 The Use of Fintech Platforms to Move Proceeds of Kidnapping for Ransom (KFR)

Case Study 2

A Law Enforcement Agency made a request for information to the Nigerian Financial Intelligence Unit (NFIU) on a subject herein referred to Mr. A, who is said to have received Ransom on a kidnap victim via his account on a Fintech platform A. NFIU Analysis revealed that, upon receiving the funds in his Fintech account, Mr. A went ahead to transfer the funds of the kidnapped individual's ransom to some number of individuals through conventional bank accounts in smaller tranches.

The NFIU analysed the request and disseminated the intelligence report to the requesting LEA for further investigation.

Indicators/techniques/methods Large sums deposited into a fintech account followed by rapid transfers to multiple recipients. Breaking down large sums into smaller transactions to avoid detection thresholds. Fintech platforms with weak Know-Your-Customer (KYC) processes that fail to verify the source of funds or the identities of beneficiaries. Residency or operation in high-risk areas associated with KFR activities. Sudden deviations from typical financial behavior, such as infrequent users suddenly receiving large sums Combining fintech platforms with traditional banking systems to move illicit funds.

Source: NFIU

Case Study 3

A