- One of the Nigeria's governors is reportedly in trouble over N100b local government fund
- The fraud was said to have been uncovered by a federal agency, NFIU
- NFIU had shown widespread abuse of the State Joint Local Government Accounts (SJLGA) by state governors
A report by The Nation indicates that a state governor is in trouble for allegedly withdrawing about N100billion from his state’s Joint Local Government Account (SJLGA) under the guise of addressing security challenges.
Legit.ng reports that the newspaper noted that much of the funds was withdrawn in cash on the orders of the governor.
The alleged fraud was uncovered by the Nigerian Financial Intelligence Unit (NFIU) following suspicious transactions by the governor.
The banks which facilitated the withdrawals have been assisting security agencies, especially the NFIU, on how the fraud was perpetrated.
It was gathered that sources said ongoing investigation by the NFIU has shown widespread abuse of the State Joint Local Government Accounts (SJLGA) by state governors.
The development was said to have informed the decision of the NFIU to ban banks, governors other financial institutions, public officers and relevant stakeholders from tampering with the statutory allocations of local government areas from the federation account.
It was learnt that although new financial guidelines by the NFIU would become effective from June 1, the agency has already put all the banks on alert to forestall last minute withdrawal from the joint account by governors.
The NFIU said as from 1st June, any bank that allows any transaction from any local government account without monies first reaching a particular local government account will be sanctioned 100 per cent, both locally and internationally.
According to a reliable source, the NFIU has retrieved a table of massive withdrawals by state governors from the joint account.
The source said: “Of all the instances at hand, we have a case of cash withdrawal from a joint account which was as much as N100 billion by a governor. This is a state with all sorts of insecurity. About N10billion out of the N100billion was recently withdrawn in suspicious circumstances.
“We have shared the intelligence with all relevant agencies. We cannot allow the trend to continue at all because whatever we are doing have global implications. Some agencies are already handling the case of the said governor.
“The NFIU has tightened the noose on some complicit banks. Before the international community comes talking to us, we have decided to act with the issuance of new guidelines.
“Remember that all these electronic transactions are regulated worldwide, they have worldwide connection. They are seeing it; they are not just coming to Nigeria simply because they just want to blacklist us for blacklisting sake.
The source said the NFIU would fully monitor compliance with the new guidelines on financial transactions by local governments.
The source added: “The volume of transactions from the account doesn’t matter; we have ways of how money laundering can be detected.
“Even if the guidelines do not work, we will do everything to make the banks comply because our main concern about local government account is the corruption aspect of it, money laundering, terrorism financing and proliferation of weapon.
“We are prepared to face the task, we have options in stages on how to handle the issue at hand but if it gets apparent that our national security is threatened, we go international and blacklist the banks.”
The source said the agency will take all precautionary steps before wielding the big stick on banks collaborating with governors to siphon local governments’ funds.
Continuing, the source said: “We intend to be friendly with the banks with the assumption that they will implement the guidelines but if the banks refused, they will be blacklisted internationally.
“We will not allow the country to be blacklisted, instead we will sacrifice the banks and the individuals involved.
“We didn’t put this in the guidelines because once we blacklist anyone or bank, it appears real time in over 160 countries that are linked to the system.
“This is a system that politics don’t come to play. You can play your politics anywhere but you can’t bring politics into NFIU because once a name is on the system, it’s global and finger print scrambled internationally immediately.
On the constitutionality of NFIU’s action, the source said: “We have instruments within our law and we’ll work with the federal ministry of justice on the implementation of the new guidelines.
“Previous issue of contention between the federal government and the governors was about control of funds, and not within the context of money laundering, terrorism financing issues among others, which are our exclusive mandate.
“Constitutionally, the governors do not have powers to do anything with the joint account other than collection and distribution. The account is not for transactions to pay individuals or companies.”
The NFIU had on Monday, May 6, unveiled the new guidelines in Abuja.
The complete copy of the guidelines has been released to the governor of the Central Bank of Nigeria, the chairman, Economic and Financial Crimes Commission (EFCC), the chairman, Independent Corrupt Practices Commission (ICPC) and chief executive officers of all banks and other financial institutions.
Meanwhile, Legit.ng had previously reported that the Nigerian Financial Intelligence Unit (NFIU)'s new financial guidelines for local governments received the backing of the Senate.
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