Banker, Seven Others Arraigned Over Alleged ₦710m Fraud

Abstract

• The compliance focus is on alleged abuse of banking controls, suspicious account activity, identity verification and the integrity of documents used to lift or circumvent restrictions on funds. The Police Special Fraud Unit (PSFU) says the case followed a petition concerning ₦710 million allegedly disbursed from eight accounts subject to Post-No-Debit (PND) restrictions.

A banker and seven other defendants have been arraigned before the Federal High Court in Lagos over an alleged ₦710 million proof-of-funds fraud, raising concerns about internal banking controls, customer identification procedures and the enforcement of restrictions on suspicious accounts.

The defendants were arraigned on a 12-count charge following an investigation by the Police Special Fraud Unit (PSFU), Lagos, according to a statement issued by the unit’s Public Relations Officer, DSP Ovie Kenneth Ewhubare.

The police said the investigation began after a petition was submitted to the Commissioner of Police concerning the alleged fraudulent disbursement of ₦710 million placed under Post-No-Debit (PND) restrictions across eight designated accounts.

According to the PSFU, its investigation implicated Emmanuel Obinyan Osenonome, a banker and Senior Relationship Officer, who allegedly conspired with Egharevba Emmanuel Osagioduwa to obtain the cooperation and personal identification details of other individuals. The police alleged that the information was used to facilitate the opening of accounts suspected of receiving proceeds connected with the alleged fraud.

A forensic analysis conducted by the unit’s Corporate and Public Accounts Fraud Section reportedly traced significant movements of the suspected proceeds to accounts linked to individuals allegedly connected with the principal suspect.

Investigators also alleged that forged or disputed proof-of-funds, indemnity and PND documents were used to facilitate the transactions.

The police said assets suspected to have been acquired with the proceeds had been identified. These reportedly included a 2020 Lexus RX 350 valued at ₦25 million, two Toyota Camry vehicles valued at ₦8 million each, and a plot of land in Magodo Phase I, Lagos, reportedly purchased for ₦40 million.

Further findings allegedly indicated that some of the funds were used to meet personal financial obligations, finance gambling activities, invest ₦40 million in CIBEX trading, and establish a spa and beauty business reportedly furnished at a cost of about ₦60 million.

The Commissioner of Police, PSFU, CP Eloho Edwin Okpoziakpo, said the unit remained committed to conducting thorough, professional and evidence-based investigations into complex financial transactions and suspected abuse of banking processes.

Compliance and Internal Control Implications

The case highlights the importance of effective internal controls around restricted accounts, particularly PND instructions designed to prevent debit transactions. Financial institutions need robust procedures for validating instructions, authenticating supporting documents and ensuring that restrictions can only be removed or overridden by duly authorised personnel.

It also underscores the importance of customer due diligence, identity verification, suspicious transaction monitoring and independent review of unusual account activity. Banks should ensure that staff access rights are appropriate, sensitive transactions are subject to segregation of duties, and audit trails can support subsequent investigations.

Where staff members have access to restricted accounts or sensitive customer information, institutions should maintain effective oversight and escalation procedures to mitigate insider risk.

The allegations remain before the court and have not been established as proven facts. The case nevertheless highlights the potential financial, legal and reputational consequences of weaknesses in banking controls.

For compliance teams, the key lesson is to ensure that account restrictions, identity checks, transaction approvals and exception-handling procedures are consistently enforced, documented and independently monitored.