When the criminal gets educated

For one to get connected and successful in life, one needs to be educated, but getting education can be very expensive and time consuming. Many have lost the opportunity to be educated because they (parents or themselves) did not have the resources to do that. The holy book (Bible) talks a lot about education, wisdom and knowledge and even encourages us to get them. In Proverbs charter 16 verse 16, the bible says that having wisdom and understanding is better than having silver or gold. The more educated the citizenry, the more productive the economy of that country is, as the educated workforce will be effective and efficient and apply critical thinking to their duties performed. All these go to show how important education is in the life of the individual and country as a whole.

Because of poverty, lack of resources and lax regulation for proper education in Ghana, criminals have shifted their attention to the education sector to launder their dirty money. These criminals use all sort of methods and/ or means to wash their ill-gotten funds without being noticed.

I was not surprised when the Managing Director (MD) of Cal Bank, Mr. Frank Brako Adu made that damning revelation, saying 40% graduates who go into the banking and financial sector have intentions to defrauding institutions to achieve quick money⁽¹⁾. This is because criminals now employ people (without any criminal records) at their tender age and sponsor them through school and after graduation “plants” them in the targeted institutions. Any background test done on these graduates will not disclose any criminal information. The graduate’s duty is just to be the link between the criminal and the institution. At times the graduate is given a flash drive to plug it into any computer. Others also share their login credentials with their supposed “employers”.

Another way the criminal can launder money through the education sector is by using the dirty money acquired to pay for the school fees of associates and/ or family members. At times the criminal makes large advance payment for multiple semesters/ terms only to cancel their enrollment and request for a refund. The dirty money is used to make payment for every education related service and fees.

The criminal setting up a school is another smart way to disguise the source of the dirty money. After setting up the school, the criminal co-mingle the dirty money with the school fees paid by the students and deposit same at the bank. Since there is no available data on average turnover (income) and other financial data of schools in Ghana to establish industry trends, the criminal is able to make the deposits without any trace or suspicions. Any money deposited at the bank will be attributed to the running of the school (school fees) but the question is, Is this true?

Criminals are using the proceeds of crime to buy a good education to launder the family’s reputation and give the next generation an entry card and a foothold into the global elite and respectable society. These criminals send their children to the best schools in the world to have influential contacts and access to the world of business opportunities. They buy the future of their children with the dirty money. This makes their criminal activities to go on generations after generation.

Luckily enough, we can reduce the risk of money laundering in the education sector by instituting Know Your Customer (KYC) principles in our schools. School authorities should institutes measures to identify and know the source of funds of parents, what these parents do for a living. Customer Due Diligence (CDD) should be performed on all students and/ or parent to determine the level of risk they pose to the school and other students. For students and/ or parents considered as high risk such as foreign students, Politically Exposed Persons (PEPs), Financially Exposed Persons (FEPs), Enhanced Due Diligence (EDD) should be done. This should not only be the completion of forms but also gathering information about the student and/or parents from other sources to be well informed.

Mention can be made of training and creating awareness as a means of controlling the influence of criminals in the education sector. The staff of the school should be trained and educated on the issues of money laundering and terrorist financing to be able to identify suspicious activities and report same to the appropriate authorities to investigate. The general public should also be educated on the various methods/ means used as conduit to wash dirty money so that they don’t fall victims to these schemes.

Another way to fight the menace of money laundering and terrorist financing in the education sector is to avoid the payment of school fees and other related charges in cash. Students and/ or parents should be made to pay fees through the bank and/or direct transfer. Further the school authorities should be careful about students or parents who offer to pay multiple semesters or terms fees in advance and seek for a refund after cancelling enrollment (this should raise the money laundering risk antenna of authorities).

Money laundering and Terrorist Financing guidelines should be developed by the regulator (Ghana Education Service) for the education sector so as to fight this menace. The guideline should focus on at least the currency transactions reporting, third party identity, AML reporting Officer, KYC/ CDD principles. School authorities should put in place, policies to avoid becoming targets for laundering money when accepting large amounts of cash.

It is high time companies start to monitor the activities and lifestyle of their staff and any suspicious behavior questioned and reported accordingly. For financial institutions, the staff account (accounts in the name and control of the staff) and related accounts need to be monitored to identify any suspicious transactions. The lifestyle of company staff in and out of the office must also be monitored. This will go a long way in fighting criminals who uses company staff to launder their ill-gotten funds and/ or advance their criminal activities.

The lack of mandatory checks on the provenance of school fees, especially from countries with a reputation for corruption, means it is difficult to gauge how much might be based on dirty money, so collective efforts are needed to fight criminals from watching their dirty money.

Would you mind doing me a favor? Share this article with someone so that the awareness of money laundering and terrorist financing could be spread to avoid being use as a conduit by criminals.

By Richieson Gyeni-Boateng, CAMS | If you require further information on this article, please contact Richieson @richieson.gyeniboateng@gmail.com

¹ https://www.ghanacrusader.com/40-graduates-go-into-banking-financial-sector-to-defraud-cal-bank-md/

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