The Executives of a United States fintech company, Ping Express, have pleaded guilty to breaching money laundering rules after sending $167 million to Africa unchecked in less than 3 years. Out of this total amount suspected to have been laundered, $160 million was sent to Nigeria.
According to a statement from the U.S Department of Justice, the company admitted it failed to seek sufficient details about the sources or purposes of the funds involved in the transactions, or the customers initiating the transmissions. Part of the money sent to Nigeria was also suspected to be proceeds of internet fraud.
The DOJ disclosed that Ping CEO, Anslem Oshionebo and its COO, Opeyemi Odeyale pleaded guilty to failure to maintain an effective anti-money laundering programme. Ping’s IT/Business Development Manager, Aleoghena Okhumale, was said to have also pleaded guilty to knowingly transmitting illegally-derived funds.
The CEO and COO were recently each sentenced to 27 months in federal prison, while the IT/Business Development Manager received a prison sentence of 42 months.
Offences committed by the company
- According to court documents, the company – which was licensed to transmit money but was not licensed to conduct currency exchange – charged U.S. customers a fee to remit money to beneficiaries in Nigeria and other African nations.
- By law, Ping was required to report any suspicious transactions to regulators.
- In plea papers, it admitted that it failed to file a single report over a three-year period, despite a significant amount of suspicious customer activity.
- Ping also admitted that it conducted money transmission business in states in which it was not licensed to do so, including Nevada, New Jersey, Utah, West Virginia, and Connecticut.
- The company claimed to have software that could detect and deter transmissions initiated in “unlicensed” states, but in reality, it admitted, the programme did not function.
- In its summaries to state regulators, Ping chose to include a column labeled “IP Location,” but only recorded states in which Ping was properly licensed: Texas, Maryland, Georgia, Washington, and Washington, DC.
Other Nigerians fingered
According to the DOJ statement, three individuals – including two of Ping’s top customers – previously pleaded guilty to transmitting illegally-derived funds through Ping.
- “One, Collins Orogun, admitted last week that he accepted a fee in exchange for transferring money for ‘romance scam’ fraudsters and other criminals. In one instance, an Indiana woman sent $15,000 to ‘Carson Jacks’, a purported oil roughneck in the Gulf of Mexico she fell in love with online, after he told her he’d contracted malaria. In another, a second Indiana woman sent $6,300 to ‘Thomas Ken,” a purported Irish ship captain she fell in love with online, to fix his ship.
- “In two years, Mr. Orogun received more than $1.3 million in cash, cashier’s checks, and wires into several U.S. bank accounts he controlled, and then quickly moved more than $1 million of the funds to Africa through Ping. He faces up to 20 years in federal prison and is set to be sentenced on Jan. 23, 2023,” the statement read.
Ping Express, the company, now faces five years of probation and a fine of up to $500,000. Sentencing has been set for December 19, 2022.