Notorious gun dealer puts Kenyan bank on the spot for laundering money for Somalia guns

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African Banking Corporation (ABC), has come under fire for a massive breach of anti-money laundering regulations.

The scandal and resulting fallout will have far-reaching implications, not just for ABC, but for the financial compliance and regulatory community at large.

Amidst heightened alert by global regulators against money laundering, ABC bank launched a new software, OMNIEnterprise a new technology from Infrasoft Technologies.

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ABC group head of risk and compliance John Rioba said that the application identifies any suspicious account activity and patterns as well as compiles real-time filing of Suspicious Activity Reports or Suspicious Transaction Reports. It also features a Cash Transaction Reporting system, which identifies and reports cash transactions of Sh1 million and over.

However, the African Banking Corporation could be blacklisted over concerns that the bank could be a conduit for criminal activities, according to Cyprian Nyakundi.

On February 13, the European Union published a list of countries whose banking systems have loopholes that could facilitate money laundering, illicit financial flows, terrorism financing and more importantly human trafficking.

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It is alleged that among the 23 countries blacklisted by the EU, six African states namely Botswana, Ethiopia, Ghana, Libya, Nigeria, and Tunisia were in the list.

A confidential exchange on August 4, between the Central Bank of Kenya and the United States Government with the subject: Bank Fraud & Money Laundering in the East African names ABC as a Kenyan bank that should be investigated for money laundering.

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Former Soviet military officer Viktor Bout arrivES at Westchester County Airport, Nov. 16, 2010 in White Plains, N.Y

It also states that ABC is used by a “notorious” gun runner, Victor Butt, to launder money as well as buy small arms from the unstable countries like Somalia, South Sudan and Pakistan. Pakistan, sources at the Banking Fraud Unit (BFU) intimate, the money came through ABC bank.

A confidential letter from the Scotland Yard to Central Bank and copied to the Banking Fraud Unit in January also urges BFU to investigate the “strong appetite” ABC bank has for the housing sector, particularly in Nairobi and the Kenyan coast, Mombasa.

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National Lands Commission confirms that the bank has acquired a huge swath of land in Lamu about 100 acres, near where the new proposed port is to be built. The commission, however, can’t tell me if the land was acquired legally and for what purposes.

In July 2017, the National Intelligence Services (NIS) released what it referred to as a situational report, saying that there were a lot of commercial banks’ irregularities in Kenya.

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