First Bank, a Nigerian bank with a market capitalisation of ₦829 billion, has begun legal action to recover “huge sums of money” allegedly diverted by an employee at a head office team in Iganmu, Lagos. The employee, now on the run, allegedly diverted those funds to 98 bank accounts classified as first beneficiaries, including his wife’s.
The bank reported the incident to the Nigerian Police Force on March 25, 2024, and obtained three court orders between April 4–8, 2024, to block hundreds of bank accounts believed to have received the stolen funds.
Three people with direct knowledge of the incident told TechCabal that while the initial amount discovered to be diverted was around ₦12 billion, it now stands at around ₦40 billion ($29 million).
Details of the Fraud
As a manager on the electronic products team at First Bank, the employee, identified by court documents as Tijani Muiz Adeyinka, was authorised to process reversals for customers. A First Bank employee with knowledge of the matter said this role meant he controlled an account used to process those reversals and credit merchant accounts.
Muiz allegedly used that authority to instead credit customer reversal requests to a merchant he controlled. As the last line of authorisation on the team, he did not need further approvals, allowing him to carry on diverting customer funds for almost two years without detection.
Discovery and Investigation
His scheme was eventually discovered when a customer made a complaint that was escalated to the bank’s internal control unit. The control unit discovered several suspicious transactions and reported them to the police.
“We hereby bring to your notice the discovery of fraudulent transactions into various transactions within and outside the bank and request your good offices to set up the machinery of investigation in place with a view to unravel the circumstances surrounding the said fraud and get the culprits apprehended to face the wrath of the law,” read a letter dated May 10, 2024, from First Bank to the Lagos State Commissioner of Police.
First Bank did not respond to multiple calls and emails from TechCabal requesting comments. A spokesperson for The Nigerian Police Force did not immediately respond to a request for comments. The spokesperson for the Economic Financial Crimes Commission (EFCC) also did not respond to a request for comments.
Police Statement
“I discovered that one Muiz Tijani Adeyinka, a former staff of First Bank, was involved in the nefarious posting of fraudulent transactions,” read a statement from the investigating Police officer in charge of the case signed March 26, 2024.
“It was discovered that he made some fraudulent transactions to his wife’s account number (name withheld) domiciled with Zenith Bank, which in turn transferred to other beneficiaries totalling thirty-four accounts which also gave birth to second beneficiaries domiciled with other banks totalling 1,190 accounts,” the statement added.
Court Actions
First Bank obtained an order on April 8 to block the bank accounts of the first and second beneficiaries of the illegally obtained funds from a Federal High Court in Lagos. The bank also obtained additional orders dated April 8 and May 5 from Jalingo and Lagos high courts to block additional accounts believed to be involved in the incident.
Use of Stolen Funds
One first beneficiary account reportedly used some of the stolen funds to buy the stablecoin USDT from several crypto traders, according to an anonymous email sent to TechCabal detailing their bank accounts. Those traders claimed their only involvement was selling USDT and denied knowing the funds they received were proceeds of fraud. They have now been drawn into a legal battle with the bank, with restrictions on their accounts at the time of this report.
Despite a decline in reported cases in Q1 2024, fraud remains a significant issue in Nigeria’s financial services industry. While fintech startups receive disproportionate scrutiny, the country’s biggest banks are often on the receiving end of fraud attacks too. In 2023, Access Bank lost ₦6.15 billion to fraud, and Fidelity Bank lost ₦2.5 billion in three incidents, per a report from BusinessDay.
“`