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₦2.9 Billion Customer Funds: Customers report frozen accounts over illegal transfers from Flutterwave.. ( + Documents)

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1 year ago

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On Sunday, payments fintech Flutterwave denied a report that hackers stole ₦2.9 billion of customer funds. In its response to the story, Flutterwave said it noticed unusual activities in its systems and told users to activate safety protocols. But it insisted that customers did not lose any funds.

However, several sources revealed a different story. One of those sources told this publication that his company lost ₦8 million. Three other sources said their accounts were frozen for being beneficiaries of illegal transfers from Flutterwave accounts.

A call to action

On March 3, 2023, Alex Onyia tweeted about a hack at Flutterwave. Part of his tweet said, “Flutterwave has been hacked by Omar Edewor Trades, who has an account in Access Bank, and several millions of naira have been stolen from people’s [Flutterwave] accounts.” He advised everyone to get a new API key—one of the safety precautions that Flutterwave asked its users to take two days later.

Onyia is the CEO of Educare, a school management software provider that integrates Flutterwave and Paystack payment technologies into their software for educational institutions and other businesses. On a call with TechCabal, Onyia maintained that money was fraudulently transferred out of the Flutterwave accounts of his clients
through API calls.

He said, “On Thursday, March 2, 2023, I got a message from my account manager at Flutterwave asking if we authorised some transactions. I looked into the matter and was already blaming my dev team. I thought they introduced something new or a backdoor that was triggering the debit. After further investigation, I discovered that
there was no problem with my company and that there was a compromise in Flutterwave’s system.”

Onyia claimed that the hacker moved ₦4,990,000 out of the client’s Flutterwave account first and ₦3,360,000 moments later. “They even initiated a third debit for
₦3,360,000, but the balance wasn’t up to that, so it didn’t materialise,” he said.

Following the money trail
Onyia said that he called Access Bank, where the money had been transferred into an account named Omar Edewor Trades. “We called the bank, but we were told that the
money had been moved to another bank. After sharing the necessary documents, including information about the illegal transaction on Flutterwave, I asked Access Bank to
freeze the account.” According to Onyia, while the bank was investigating, it noticed that a lot of money was flowing into that account and immediately froze the
account.

“We asked the bank to send us back our money since there was money in the account and proof that about ₦8 million moved from our account to the fraudster’s. The bank
refused, saying that they had no right to, as based on the transaction trail, our money has been moved to a different account.” TechCabal could not verify that the
Access Bank account was frozen at the time of this report.

Onyia said that on March 3, Flutterwave asked customers to activate IP whitelisting, a security measure that was previously optional and asked everyone to change their
API keys. “If you know your system was not compromised, why are they asking everyone to take all these measures?”

Flutterwave’s response
Flutterwave answers this question in its official statement, saying, “During a routine check of our transaction monitoring system, we identified an unusual trend of
transactions on some users’ profiles. Our team immediately launched a review (in line with our standard operating procedure), which revealed that some users who had
not activated some of our recommended security settings might have been susceptible.” However, the fintech flatly denied that any user lost any funds, as its security
measures were “able to address the issue before any harm could be done to our users”.

But court documents seen by TechCabal raise questions about Flutterwave’s version of events. Those documents include certified true copies of a petition by
Fluttewave’s legal counsel to the police dated February 20, 2023. The letter asked for police assistance to recover funds by obtaining court orders from the magistrate
court to sustain account freezes on 107 bank accounts in 27 banks that allegedly, directly or indirectly, received money from the illegal transfers from Flutterwave accounts.

Some of the frozen accounts
Ajeka Iliasu Opaluwa, owner of Pajek Signature, a cryptocurrency trading business, is listed in court documents as a first beneficiary of the illegal transfer from
Flutterwave accounts. A first beneficiary is an account that received a transfer directly from a Flutterwave account. On a call with TechCabal, Opaluwa said, “I sold
USDT worth ₦1.6 billion to William Atong Chen, a Chinese merchant who has been a customer since 2019. When we first transacted five years ago, my partner met him in
Lagos to complete KYC (know your customer). The transactions started on February 5, 2023, and I got paid, just like all the others I have had with him. It was on
February 7, 2023, after the trade had been concluded, that the bank froze my account.”

Opaluwa told Chen that the bank had frozen his account. “I asked him to come to the bank and help me resolve the issue, but he said he was no longer in Nigeria. His
Nigerian numbers are still reachable, and when I call him to recount my plight, he insists that he made the transaction in good faith and that it was not stolen money
he sent to me,” Opaluwa said on the call.

Opaluwa insists that the Chinese customer’s name is William Atong Chen, however, the only Chinese name found on Flutterwave’s court document listing bank accounts to
be frozen is Quiang Chen. Opaluwa shared evidence of the transaction with TechCabal. “I made the transaction lawfully. I sourced USDT, and when I saw evidence that I
had been paid, I handed them over. Three days later, somebody comes to tell me that the money I was paid was stolen. Was I supposed to take it to a digital money
detector? How could I have known the money was stolen?” he asked on the call. He told TechCabal that he has filed a petition against Flutterwave as he is also a
victim.

The accounts of other crypto traders who received payments for crypto assets from Opaluwa were also frozen. David Ofedu Audu, whose five bank accounts are listed on
Fluterwave’s petition for account freezing, is one of them. Audu told TechCabal that his transactions with Opaluwa started on February 5 and ended on February 7. The
day after, February 8, his five accounts were frozen.

He also shared an email from StanbicIBTC Bank confirming that his accounts were frozen because of the illegal transfers from Flutterwave accounts. His account manager
at Providus Bank, where his accounts were also frozen, cited the same reason for the freeze, on a call.

“I am a second beneficiary because the person who paid me received the money directly from Flutterwave. Opaluwa bought USDT from me for a Chinese customer called
Chen,” Audu said on the call. In the court documents, Chen’s account is listed as one of the accounts frozen for receiving funds from the impacted Flutterwave
accounts.

TechCabal also spoke to sources whose accounts were blocked but who claimed they had no dealings whatsoever with Flutterwave. Henry Awaka, one such person, told
TechCabal that his Fidelity Bank account was frozen around the same period. He told TechCabal, “I sent several emails to Fidelity Bank but got no response.”

He remained in the dark until his friend, who was a second beneficiary, saw his name in the court documents and told him about it. According to the document, Awaka’s
Fidelity bank account is a fourth beneficiary and received ₦1,199,291 from an account named Nnam Monday Kingsley at Providus Bank. Awaka said that he traced the
transaction and discovered that it was from a bulk sale of alcoholic drinks—350 crates of Trophy and 27 crates of Budweiser alcoholic drinks.

Awaka is a sales manager at an international brewery and he claimed he makes these sorts of transactions regularly. He didn’t suspect that he had become a beneficiary
of some of the N2.9 billion illegally transferred from Flutterwave accounts. He has since emailed his bank several times with the receipt of his transaction but has
received no response. “Fidelity Bank is so complacent about the matter,” he said. According to him, there are about 180 people in a Whatsapp group whose accounts have
been frozen after making one legitimate transaction with someone who received money that came from the Flutterwave account.

 

Source: The Tech Cabal

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N3bn Fraud Trial: Court permits Yahaya Bello’s accused nephew to travel abroad

Published

3 days ago

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July 23, 2024

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The Federal High Court in Abuja has permitted an accused nephew of former Kogi State Governor Yahaya Bello to travel to the United Kingdom for medical attention.

 

To enable the defendant, Ali Bello, to embark on the foreign medical trip, the court ordered the release of his passport seized from him as part of his bail conditions.

 

Obiora Egwuatu, the trial judge, issued the order on Monday, overruling the objection of the prosecution agency, the Economic and Financial Crimes Commission (EFCC), to grant the accused person’s request.

 

He said the prosecution failed to present convincing evidence to back its claim that Ali would jump bail or tamper with evidence if allowed to embark on the medical trip.

 

He said he had no reason to believe Ali would jump bail, having fulfilled previous undertakings to return to Nigeria to continue his trial on two separate occasions.

 

“Since the grant of bail, he has not breached the terms of bail and has been coming to court to stand his trial.

 

“It is not controverted that this court had on two previous occasions granted the applicant similar prayers.

 

“On those two occasions, that is, between the 1 to 31 August 2023 and 17 December 2023 and 10 January 2024, the applicant did not breach the terms of the permission granted,” the judge said.

 

Stressing the need to ensure a defendant is healthy to stand trial, the judge said, “I wholeheartedly subscribe to the view that a defendant should be alive to stand trial” and face the consequences of his crime if found guilty.

 

Mr Egwuatu ordered the court’s deputy chief registrar who keeps Ali’s passport to release it to him, the News Agency of Nigeria (NAN) reports.

 

He also ordered the defendant to return the passport on or before 15 September.

 

Series of charges relating to Kogi funds

Ali and three others are standing trial on money laundering charges involving N3 billion allegedly diverted from the Kogi State coffers during former Governor Bello’s tenure.

 

The three co-defendants in the case are Abba Adaudu, Yakubu Siyaka Adabenege and Iyadi Sadat.

 

The case is only one in a series of prosecutions the EFCC brought against Ali, Mr Bello and their associates over their alleged fraudulent handling of Kogi State Government’s funds.

 

Ali and a co-defendant, Dauda Sulaiman, are charged with money laundering in another case involving the alleged diversion of N10 billion of Kogi State’s funds. The case is before a different judge of the Federal High Court in Abuja, James Omotosho. The prosecution has already called seven witnesses in the trial.

 

Mr Bello, the former governor, faces money laundering charges involving an alleged diversion of Kogi State’s N80 billion in a separate case before Mr Omotosho. Both Ali and Mr Suleiman are named as accomplices in the case.

 

EFCC brought the charges against Mr Bello after completing his two terms of eight years as governor in January but has been unable to get him to court for arraignment.

 

Since April, Mr Bello has shunned six court sessions scheduled for his arraignment, which has now been rescheduled for 25 September.

 

Ali’s medical trip request

On 5 April, Ali filed an application in the trial before Mr Egwatu seeking an order to release his passport from the deputy chief registrar of the court to enable him to travel abroad for medical consultation and examination.

 

He said the trip was to fulfil a routine cardiologic follow-up to review his medication and undergo cardiac tests.

 

He said he received medical advice to undergo the process annually.

 

He also recalled that the judge had granted him similar permissions to embark on the foreign medical trip on two occasions – first between 1 and 31 August 2023 and second between 17 December 2023 and 10 January 2024.

 

He said he returned to Nigeria on both occasions and returned his passport to the court’s deputy chief registrar as he was ordered to.

 

He pleaded with the judge to order the release of his passport again, undertaking to return it to the official upon his return from the UK to Nigeria.

 

The defendant also gave an assurance to be law abiding in the UK.

 

EFCC opposes request

The EFCC opposed the application.

 

Arguing against the request in court, EFCC’s prosecuting counsel, Rotimi Oyedepo, a SAN, cited a five-paragraph counter-affidavit detailing reasons for the commission’s objection. An EFCC official, Abubakar Salihu Wara, swore to the facts in the document on 19 April.

 

Mr Oyedepo argued that Ali failed to place any medical report before the court to show the health condition that necessitated the medical appointment.

 

Mr Oyedepo said Exhibit ‘A’ attached to the application did not disclose the email address of the sender and the receiver of the said medical appointment.

 

He added that the applicant did not present anything to show that Exhibit ‘A’ emanated from the London Centre for Advanced Cardiology as claimed.

 

He argued that Ali might tamper with evidence gathered for his prosecution if his application is granted.

 

However, Ali filed a further affidavit to dispute the prosecution’s claims.

 

Ruling

Apart from banking on the reputation Ali had earned by fulfilling his promises to return to Nigeria when granted the foreign trip permissions on two previous occasions, the judge also ruled that EFCC’s reasons for objecting to the request were not convincing.

 

Mr Egwatu held that EFCC failed to show that the name of the London hospital Ali planned to visit and its address “are not in existence”. He said there was no contrary evidence disputing the fact that the applicant “has a scheduled appointment with the said cardiologist.”

 

According to him, there was also no evidence presented by the EFCC to show that while Ali was on bail, he did or attempted to interfere with evidence or collude with any person to tamper with evidence.

 

The judge further said that a defendant ought to be healthy to stand the rigours of trial.

 

Former Central Bank of Nigeria (CBN) governor Godwin Emefiele, facing multiple corruption trials, recently applied to the High Court of the Federal Capital Territory, Abuja, to seek medical attention in the UK, but the court rejected the request.

 

The judge in the case upheld EFCC’s objection, which was argued by Mr Oyedepo, the same prosecutor in Ali’s trial.

 

(NAN)

 

 

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News and Report

Reps ask FG to suspend NMDPRA boss over anti-Dangote refinery comment

Published

3 days ago

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July 23, 2024

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The House of Representatives has called on the Federal Government to suspend the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, pending the conclusion of the investigations of allegations against what it called the unguarded statement by the CEO.

 

The resolution of the House followed the adoption of a motion of urgent public importance sponsored by the member representing Esosa Federal Constituency, Edo State, Esosa Iyawe, during Tuesday’s plenary on the need to address issues arising from Farouk’s utterances about the nation’s local refineries.

 

The lawmaker reminded his colleagues that claims of adulterated fuel in the Nigerian market must be thoroughly investigated, stating that fuel quality can impact engine hardware.

 

This he said, is the reason ultra-low sulphur diesel is recommended for all types of power plants, storage tanks, industrial facilities, fleets and heavy equipment, and even ships, as high sulphur content in fuels, causes damage to engines and contributes to air pollution.

 

He said considering the various risks associated with sulphur, countries across the world have taken steps to regulate it by setting standards that require maximum reduction of emissions of this chemical compound, which diesel producers are expected to adhere to.

 

The Labour Party lawmaker, however, noted that the NMDPRA permits local refiners to produce diesel with Sulphur content of up to 650 parts per million until January 2025, as approved by the Economic Community of West African States.

 

He quoted the NMDPRA boss as saying that the diesel produced by the Dangote Refinery is inferior to the ones imported into the country and that their fuel had a large content of sulphur, which he put at between 650 to 1,200 ppm.

 

 

“In their defence, Dangote called for a test of their products, which was supervised by members of the House of Representatives, wherein it was revealed that Dangote’s diesel had a Sulphur content of 87.6 ppm (parts per million), whereas the other two samples diesel imported showed sulphur levels exceeding 1800 ppm and 2000 ppm respectively, thus disproving the allegations made by the NMDPRA boss.

 

 

“Allegations have been made that the NMDPRA was giving licences to some traders who regularly import high-sulphur content diesel into Nigeria, and the use of such products poses grave health risks and huge financial losses for Nigerians.

 

“The unguarded statements by the Chief Executive of the NMDPRA, which has since been disproved, sparked an outrage from Nigerians who tagged his undermining of local refineries and insistence on the continued importation of fuel an act of economic sabotage, as the imported products have been shown to contain high levels of dangerous compounds.”

 

He condemned what he called the careless statement by Farouk, noting that “Without conducting any prior investigation, he was not only unprofessional but also unpatriotic, especially in the face of the recent calls for protest against the Federal Government.”

 

Recall that a joint committee of the House on Monday, July 22, 2024, commenced investigations into Farouk’s allegations against Dangote Refinery.

 

The panel, made up of the Committees on Petroleum (Downstream and Midstream) is also conducting a legislative forensic investigation into “The presence of middlemen in crude trading and alleged unavailability of international standard laboratories to check adulterate

d products”, among others.

 

 

 

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Democrats Raise Over $40 Million Online Following Biden’s Presidential Race Exit

Published

5 days ago

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July 22, 2024

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In a remarkable display of financial support, Democrats raised more than $40 million online following President Joe Biden’s announcement that he would be exiting the presidential race. This surge in donations, which occurred on Sunday, marked the most significant single day of online contributions for the Democratic Party since the 2020 election.

According to a New York Times analysis of ActBlue’s online contribution tracker, the wave of donations began shortly after President Biden’s withdrawal and coincided with Vice President Kamala Harris gaining momentum in the nomination race. Prior to Biden’s announcement, donations were averaging less than $200,000 per hour. However, within just one hour after the news broke, donations soared to $7.5 million.

The ActBlue platform processes contributions for various Democratic candidates and causes, not limited to Biden or Harris. It includes donations to Democratic House and Senate candidates as well as political nonprofits. The overall increase in donations highlights the unified support within the party during a pivotal moment.

Kenneth Pennington, a Democratic digital strategist, expressed his enthusiasm on X (formerly Twitter), stating, “This might be the greatest fundraising moment in Democratic Party history.” The previous record for single-day donations on ActBlue was set after the death of Justice Ruth Bader Ginsburg in September 2020, with approximately $73.5 million processed. Sunday’s donations, reaching over $50 million by the end of the day, made it one of the platform’s most successful days ever.

The influx of contributions comes at a critical time for the Democratic Party, which has been grappling with internal conflicts and a need to regain momentum in the race aga inst former President Donald J. Trump. Fundraising had significantly slowed among major Democratic donors following President Biden’s underwhelming debate performance, but his departure from the race seemed to galvanize the party’s base.

Biden’s exit and his endorsement of Vice President Harris appeared to unify Democratic supporters, resulting in a dramatic spike in contributions. As Harris builds momentum to secure the nomination, the financial backing will undoubtedly play a crucial role in her campaign.

President Biden’s withdrawal had been anticipated by many, although the timing came as a surprise. He announced his decision while recovering from Covid at his Delaware beach house. In a letter posted on X, Biden reflected on his presidency, calling it the “greatest honor of my life.” He emphasized that stepping down was in the best interest of the party and the country, allowing him to focus on his duties for the remainder of his term.

Biden’s endorsement of Harris was swift and unequivocal, with his campaign quickly rebranding to “Harris for President.” Prominent Democrats and potential rivals, including California Governor Gavin Newsom, promptly voiced their support for Harris.

The surge in donations following Biden’s exit signifies a critical juncture for the Democratic Party. With substantial financial resources now at their disposal, the party aims to leverage this momentum to overcome recent challenges and strengthen their position in the upcoming election.

 

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