Cyber-Scams: The Ill-Wind Raging Across Nigeria’s South-West, By Bámidélé Adémólá-Olátéjú
What is going on in the South-West is organised crime. It is an ill wind that will destroy us. This kind of money multiplies crime and makes our communities unsafe. We have a values problem. Our worship of material success is killing us. We must realise that money from proceeds of fraud can be used to fund terrorism and sponsor insurrection against the state…
Immediately the United States Congress passed the Cares Act in March, to provide economic assistance to American workers, Nigerian scammers tapped into its expanding network of global cyber fraud to take advantage of the programme. These criminals targeted the $600 monthly unemployment benefits paid to out-of-work Americans. Within two weeks, young boys in secondary schools and those attending Universities across the South-West of Nigeria were buying Toyota Camrys and other used cars called Tokunbo locally. They felt no compunction in flaunting their loots and made no secret about how they got their toys and latest gadgets. Within two weeks, word went round and they earned the sobriquet: “Ọmọ Benefit”; children of benefit.
How did they do it? According to the cybersecurity firm, Agari, Nigerian scammers swooped on unemployment insurance agencies in eleven states, using stolen identities to claim standard benefits, as well as additional benefits administered by the Pandemic Unemployment Assistance (PUA) programme. Much of the information used were obtained from the dark web, from prior data breaches or direct attacks on systems of the targeted states. According to the New York Times, the United States Secret Service issued a memo in May warning states that a well-organised Nigerian fraud ring was targeting state unemployment systems. The affected states have lost hundreds of millions of dollars to the benefit scam. It has also caused untold suffering to individuals whose identities have been stolen. Many claims were rejected for being duplicate applications because the scammers beat the real beneficiaries to it, with payments going to the scammers. On the government side, efforts to control fraud have clogged up benefit systems, causing delay in payments to the jobless and making people’s lives harder.
While the payments lasted, an estimated $550-$650 million was lost to the Ọmọ Benefit, according to the Employment Security Department (ESD). With Federal Government help, approximately $333 million has been recovered. Up until now, the ESD is not confident that they had all the data as investigation continues into the extent of the fraudulent fillings. Independent reports have suggested that the figure may run as high as $1 billion.
Times have changed! The most unfortunate turn of events is the involvement of teenagers, who should be in school or learning different trades, in these scams… It is obvious that as we evolve in our interactions, criminals and their fraudulent schemes are also evolving.
Yesterday, September 7, the Nigerian Police arrested Babatunde Adesanya and Akinpelu Hassan Abass, members of what the police called a “sophisticated transnational criminal network” in Abuja. They had cloned the website of a Dutch company to obtain an order to supply personal protective equipment (PPE) from the German state of North Rhine-Westphalia. The order was for €2.3 million (£2 million). When the German state did not receive the PPE, a state government official visited the company’s offices in the Netherlands. The company then told the official that they had never done business with the German state. The representative of the German state notified the Dutch police and investigations led them to Abuja, where the two suspects were arrested. One can be certain that the FBI is on the trail of crime masterminds and looking at their footprints. Sooner, rather than later, another ring of Nigerian scammers will be bursted.
Times have changed! The most unfortunate turn of events is the involvement of teenagers, who should be in school or learning different trades, in these scams. What is the future of the Yoruba and indeed Nigeria if we continue at this rate? Nigerian scams used to be by letters, and later the email. In the past few years, these have taken the colouration of romance scams, phishing, identity theft, including the cloning of the character of legitimate businesses. It is obvious that as we evolve in our interactions, criminals and their fraudulent schemes are also evolving. Advances in technology, telephony and the use of data have changed how we communicate, do business and they have also aided the criminally minded in plying their trades. Committing cross-border fraud seems far more easier through the computer than inside one’s country, given the interconnectedness of information and data.
What are the implications of this hydra-headed foe that is destroying our society in a number of ways? Many of our youths are leading lives that can only lead to perdition. Crime is not a sustainable enterprise that one can engage in throughout life with comfort. Sadly, scammers, their parents, families, friends and associates are increasingly seeing cyberfraud as being smart, cool and an easy way out. It is about time for our government to take this issue seriously. Fraud is not a victimless crime. For victims, fraud is a real, devastating and traumatic experience. When government is defrauded, it impacts those who depend on government services, like the elderly, the poor and those on disability benefits. Fraud compounds their disadvantage and increases their vulnerability, in addition to perpetuating inequality. For Nigeria, fraud costs us our international and economic reputation. It also damages our international standing and ability to get international support and confidence.
How about the distorted markets that fraud create? For example, can a teacher who saved diligently compete with an SS3 student who got an easy $5000 to buy a Tokunbo Toyota Camry? How about people who lauder such proceeds through businesses? Such frauds have unfair competitive advantage in the market because they will sell at lower prices…
Everyone is complaining that there are no jobs, who will bring investment to an environment that is very corrupt and fraudulent with tainted law enforcement and a compromised judiciary? If there are no jobs, isn’t that a nebulous circle of poverty and lack of upward mobility? There has been a perennial call to disband the notorious Special Anti-Robbery Squad (SARS). Is having a squad like SARS not a drain on government resources, given the duplication of investigation, prosecution, prison, and forensic systems? How about the distorted markets that fraud create? For example, can a teacher who saved diligently compete with an SS3 student who got an easy $5000 to buy a Tokunbo Toyota Camry? How about people who lauder such proceeds through businesses? Such frauds have unfair competitive advantage in the market because they will sell at lower prices to clean the money and drive legitimate businesses in the same line of trade out.
I know that measuring lost economic opportunities may be more difficult because the exercise focuses on what might have been, instead of what actually occurred; but we can’t continue to fold our hands. What is going on in the South-West is organised crime. It is an ill wind that will destroy us. This kind of money multiplies crime and makes our communities unsafe. We have a values problem. Our worship of material success is killing us. We must realise that money from proceeds of fraud can be used to fund terrorism and sponsor insurrection against the state, as they get more sophisticated with eyes on influencing politics and policy. Now is the time to tackle this menace. We can begin by having a whistle blower policy on scammers and a special court to try them. It is not too late to take urgent steps to ensure that knowledge of digital technology by the youth is used as a force for good.