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FIA report confirms COVID-19 funds theft fears


A financial intelligence Agency (FIA) report has revealed that criminals appeared to have defrauded COVID-19 Relief Fund during the first few months of its launch. According to the report seen by this publication titled “Guidance note for detection of Covid-19 related crimes,” FIA said it has identified various criminal activities in which criminals engaged in scams to access government Covid-19 Relief Fund.

The report says that some public officials were suspected to have misallocated COVID-19 relief funds by misdirecting contracts to businesses that do not exist or have no reasonable business purpose, which ultimately benefited their own interests and/ or financial gain.  The report says that, “typology includes government contracts for Personal Protective Equipment (PPE) and other healthcare supplies being unduly awarded to newly established businesses which ultimately benefit themselves or family members.”

Similarly, the COVID-19 relief funds may have been inappropriately used to pay for items that have no benefit(s) to help stop the spread of COVID-19, reveals the report. FIA said emergency procurement of PPEs and other healthcare supplies created an opportunity for corrupt public officials to abuse their powers to circumvent laid down procurements processes for their personal gain. It says this led to award of procurement contracts to undeserving entities, overpriced supplies and delivery of substandard goods.

It says some businesses which took Covid-19 loans from the government but diverted the money to fund other projects outside the country. FIA says some companies created ghost employees to increase wage subsidy claims while directors/shareholders in private companies who are at the same time employed as government officials claimed the wage subsidy thereby double dipping from the Covid-19 aid.

FIA said it has identified the financial red flag indicators aimed at alerting financial institutions to potential fraud, corruption, and thefts related to COVID-19 relief funds as well as to assist financial institutions in detecting, preventing, and reporting suspicious transactions related to such activities.  According to FIA, based upon each reporting entity’s risk-tolerance level, exposure to risk, and in accordance with a risk-based approach, these red flags may result in the filing of a Suspicious Transaction Report (STR).

FIA said some criminals engage in suspicious activities whereby an existing account receives, or an account holder makes, multiple COVID-19-related deposits for individuals other than the account holder(s), and the individuals named do not have a relationship with the account holder. The Agency noted that this may be indicative of funnel account activities in which multiple payments are deposited or transferred into one account, which may be held by a fraudster or a money mule working for the fraudster.

The Agency said some activities involve a situation whereby an existing account receives an excessive number of COVID-19 relief deposits related to a prepaid debit card linked to the same address (e.g., an account receiving more deposits than expected relative to the customer’s profile and financial institution’s customer due diligence). FIA also warned that a customer may open a new account with a COVID-19 relief cheque, and the name of the potential account holder is different from that of the depositor or the payee.

FIA further warned that in some instances, rapid transfers of multiple relief payments into one account could indicate that bad actors are consolidating the payments. After the funds are consolidated, FIFA said, the funds may be quickly withdrawn via large cash withdrawals or serial or ATM withdrawals could be used to purchase convertible virtual currencies. FIA said funds could also be transferred out of the account via a money services business such as cryptocurrency exchangers and peer-to-peer mobile payment systems or wire transfers to other accounts or transferred onto prepaid debit or gift cards.

FIA also gave an example where an account receives several COVID-19 relief deposits and almost immediately thereafter disburses funds for large purchases at merchants that offer cash back as an option, in amounts not typical of this type of merchant, or has funds transferred onto prepaid debit or gift cards. FIA an account holder may also attempt to deposit one or more cheques that appear to be issued for COVID-19 relief, but are fraudulent or counterfeit cheques.

“When questioned, the customer may disclose that he or she was sent a partial payment, and needed to verify his or her PII or financial information before receiving the full payment; or received the check purportedly from a current or former employer with instructions that the cheque was the customer’s “relief payment” and that he or she was to buy prepaid cards and send them to another individual,” the report says.


Over 2 000 civil servants interdicted

6th December 2022

Over 2,000 civil servants in the public sector have been interdicted for a variety of reasons, the majority of which are criminal in nature.

According to reports, some officers have been under interdiction for more than two years because such matters are still being investigated. Information reaching WeekendPost shows that local government, particularly councils, has the highest number of suspended officers.

In its annual report, the Directorate on Corruption and Economic Crime (DCEC) revealed that councils lead in corrupt activities throughout the country, and dozens of council employees are being investigated for alleged corrupt activities. It is also reported that disciplined forces, including the Botswana Defence Force (BDF), police, and prisons, and the Directorate of Intelligence and Security (DIS) have suspended a significant number of officers.

The Ministry of Education and Skills Development has also recorded a good number of teachers who have implicated in love relationships with students, while some are accused of impregnating students both in primary and secondary school. Regional education officers have been tasked to investigate such matters and are believed to be far from completion as some students are dragging their feet in assisting the investigations to be completed.

This year, Mmadinare Senior Secondary reportedly had the highest number of pregnancies, especially among form five students who were later forcibly expelled from school. Responding to this publication’s queries, Permanent Secretary to the Office of the President Emma Peloetletse said, “as you might be aware, I am currently addressing public servants across the length and breadth of our beautiful republic. Due to your detailed enquiry, I am not able to respond within your schedule,” she said.

She said some of the issues raised need verification of facts, some are still under investigation while some are still before the courts of law.

Meanwhile, it is close to six months since the Police Commissioner Keabetwe Makgophe, Director General of the Directorate on Corruption and Economic Crime (DCEC) Tymon Katlholo and the Deputy Director of the DIS Tefo Kgothane were suspended from their official duties on various charges.

Efforts to solicit comment from trade unions were futile at the time of going to press.

Some suspended officers who opted for anonymity claimed that they have close to two years while on suspension. One stated that the investigations that led him to be suspended have not been completed.

“It is heartbreaking that at this time the investigations have not been completed,” he told WeekendPost, adding that “when a person is suspended, they get their salary fully without fail until the matter is resolved”.

Makgophe, Katlholo and Kgothane are the three most high-ranking government officials that are under interdiction.

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Masisi to dump Tsogwane?

28th November 2022

Botswana Democratic Party (BDP) and some senior government officials are abuzz with reports that President Mokgweetsi Masisi has requested his Vice President, Slumber Tsogwane not to contest the next general elections in 2024.

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African DFIs gear to combat climate change

25th November 2022

The impacts of climate change are increasing in frequency and intensity every year and this is forecast to continue for the foreseeable future. African CEOs in the Global South are finally coming to the party on how to tackle the crisis.

Following the completion of COP27 in Egypt recently, CEOs of Africa DFIs converged in Botswana for the CEO Forum of the Association of African Development Finance Institutions. One of the key themes was on green financing and building partnerships for resource mobilization in financing SDGs in Africa

A report; “Weathering the storm; African Development Banks response to Covid-19” presented shocking findings during the seminar. Among them; African DFI’s have proven to be financially resilient, and they are fast shifting to a green transition and it’s financing.

COO, CEDA, James Moribame highlighted that; “Everyone needs food, shelter and all basic needs in general, but climate change is putting the achievement of this at bay. “It is expensive for businesses to do business, for instance; it is much challenging for the agricultural sector due to climate change, and the risks have gone up. If a famer plants crops, they should be ready for any potential natural disaster which will cost them their hard work.”

According to Moribame, Start-up businesses will forever require help if there is no change.

“There is no doubt that the Russia- Ukraine war disrupted supply chains. SMMEs have felt the most impact as some start-up businesses acquire their materials internationally, therefore as inflation peaks, this means the exchange rate rises which makes commodities expensive and challenging for SMMEs to progress. Basically, the cost of doing business has gone up. Governments are no longer able to support DFI’s.”

Moribame shared remedies to the situation, noting that; “What we need is leadership that will be able to address this. CEOs should ensure companies operate within a framework of responsible lending. They also ought to scout for opportunities that would be attractive to investors, this include investors who are willing to put money into green financing. Botswana is a prime spot for green financing due to the great opportunity that lies in solar projects. ”

Technology has been hailed as the economy of the future and thus needs to be embraced to drive operational efficiency both internally and externally.

Executive Director, bank of Industry Nigeria, Simon Aranou mentioned that for investors to pump money to climate financing in Africa, African states need to be in alignment with global standards.

“Do what meets world standards if you want money from international investors. Have a strong risk management system. Also be a good borrower, if you have a loan, honour the obligation of paying it back because this will ensure countries have a clean financial record which will then pave way for easier lending of money in the future. African states cannot just be demanding for mitigation from rich countries. Financing needs infrastructure to complement it, you cannot be seating on billions of dollars without the necessary support systems to make it work for you. Domestic resource mobilisation is key. Use public money to mobilise private money.” He said.

For his part, the Minster of Minister of Entrepreneurship, Karabo Gare enunciated that, over the past three years, governments across the world have had to readjust their priorities as the world dealt with the effects and impact of the COVID 19 pandemic both to human life and economic prosperity.

“The role of DFIs, during this tough period, which is to support governments through countercyclical measures, including funding of COVID-19 related development projects, has become more important than ever before. However, with the increasingly limited resources from governments, DFIs are now expected to mobilise resources to meet the fiscal gaps and continue to meet their developmental mandates across the various affected sectors of their economies.” Said Gare.

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