First Bank of Nigeria, a financial institution with a market capitalization of ₦829 billion, has launched a legal battle to recover substantial funds allegedly siphoned off by a former employee. The employee, identified as Tijani Muiz Adeyinka, is now on the run after allegedly diverting approximately ₦40 billion ($29 million) from the bank.
The scandal came to light following a report to the Nigerian Police Force on March 25, 2024. The bank obtained three court orders between April 4 and April 8, 2024, to freeze hundreds of bank accounts suspected to have received the stolen funds. This dramatic turn of events underscores the vulnerabilities within Nigeria’s banking sector and raises serious concerns about internal security measures.
**The Fraudulent Scheme**
Muiz, who was a manager on the electronic products team at First Bank’s head office in Iganmu, Lagos, allegedly exploited his position to divert funds intended for customer reversals. With the authority to process these reversals and credit merchant accounts, Muiz is accused of redirecting substantial sums to accounts he controlled, including one belonging to his wife.
The fraudulent activities reportedly went undetected for nearly two years due to Muiz’s position as the final approver of these transactions, allowing him to operate without needing further authorization. His scheme was finally uncovered when a customer complaint was escalated to the bank’s internal control unit, which then identified numerous suspicious transactions.
**Legal and Investigative Actions**
In a letter dated May 10, 2024, First Bank formally requested the Lagos State Commissioner of Police to initiate an investigation. “We hereby bring to your notice the discovery of fraudulent transactions within and outside the bank and request your good offices to set up the machinery of investigation to unravel the circumstances surrounding the said fraud and bring the culprits to justice,” the letter stated.
Following the initial investigation, police discovered that the stolen funds had been distributed to 98 accounts classified as first beneficiaries. These accounts further dispersed the funds to an intricate web of second beneficiaries, involving over 1,190 accounts across multiple banks.
Despite these revelations, neither the Nigerian Police Force nor the Economic and Financial Crimes Commission (EFCC) have provided immediate comments on the ongoing investigation.
**Impact on the Financial Sector**
This incident highlights the persistent challenges faced by traditional banks in combating sophisticated financial fraud, particularly in the wake of increasing competition from neobanks and fintech companies. The clash between established financial institutions and emerging digital banks underscores the need for robust security measures and enhanced oversight within the banking sector.
As First Bank continues its efforts to recover the diverted funds, the broader financial community is left grappling with the implications of such a high-profile fraud case. This situation serves as a stark reminder of the critical importance of stringent internal controls and vigilant monitoring to safeguard against internal threats.
