Mozambique: E-money scam network dismantled in north, 28 detained

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Mozambique: E-money scam network dismantled in north, 28 detained

7:52 CAT | 20 May 2024

FILE - For illustration purposes only. [In file CoM]

Vodacom’s M-Pesa digital wallet has dismantled a “network of account registration agents and fraudulent SIM card sales” of the Mozambican telecoms operator in “high-risk areas”, leading to 28 detentions.

“So far, 28 individuals have been detained for questioning, and the investigation is continuing, pending resolution,” reads the statement released on Friday by the operator, reporting that its Forensic Fraud team dismantled this “network of account registration agents and fraudulent sales” of cards in the province of Nampula.

“The operation was the result of the anti-money laundering and anti-terrorist financing monitoring and investigation activities carried out by Vodafone M-Pesa,” it adds.

The operator, which owns the largest digital wallet in the country – whose transactions work only using mobile phones and their SIM card – said that in February it detected “the existence of a significant number of accounts opened by tampering with identification documents in the High Risk Zones (Northern Region)”, which was followed by an “in-depth investigation process that made it possible to identify registration agents involved in fraudulent activities”.

“The fraud was carried out through the use of a single identification document by several agents, who proceeded to create several registrations based on that same document,” it is further explained.

It also noted that “the Namicopo and Carrupeia neighbourhoods in the city of Nampula were identified as the main focus of this illicit practice”.

After identifying those involved, the case was referred to the Criminal Investigation Service (Sernic) in Nampula province, “where an expanded field operation was launched, focussing on the individuals with the highest number of registrations and the highest commissions, with the aim of uncovering the source of the fraud”.

The Mozambican authorities have classified the Electronic Money Institutions (EMI) sector, which operates through mobile telecoms operators, with a “high” threat level for terrorist financing, according to a government report published in March by Lusa.

“The e-money sector’s threat level for terrorist financing in the country is high,” reads the National Terrorist Financing Risk Assessment Report.

The document also recognises an “excessive movement of funds to areas of active terrorist threat using e-money institutions” operating in Mozambique, noting that it is “concentrated in rural areas and with limited access to the national banking network”.

“For this reason, there is a preference for using electronic money institutions, given the ease of use of the service and the rapid movement of funds it provides. These factors combined precipitate and make appetising the abuse of this sector by terrorist sympathisers. The existence of population clusters that reside and carry out social and commercial activities, among others, in regions with an active terrorist threat, makes it possible for terrorists and terrorist sympathisers to abuse the services of electronic money institutions for the movement of funds,” it reads.

In February, Lusa reported that the number of EMI agents in Mozambique, guaranteeing transfers, purchases, withdrawals and deposits through mobile telecoms operators, increased by 10.5% in three months, to 224,704 in December, covering all 154 districts of the country.

“At the end of 2021 and beginning of 2022, in Cabo Delgado province, particularly in rural areas, transactions were mostly made in cash and using mobile wallets (electronic money), given the lack of banks operating in these areas, and terrorists had in this system, given the weak control, the preferred mechanism for moving funds channelled by family, friends, sympathisers and others and later withdrawn from agents by people with friendship ties and who later delivered cash for their terrorist activities,” the report states.

Source: Lusa