A texas-based remittance company, Ping Express has pleaded guilty in the United States to money laundering scam, after sending over $160 million to Nigeria in suspicious transactions over a period of three years, some of which the proceeds were disclosed to be from online romance scams.
According to a statement released by the U.S attorney for the Northern District of Texas, Chad E. Meachan, he disclosed that the firm admitted that it failed to maintain an effective anti-money laundering program and they operated without a license in at least 5 U.S states.
The CEO of Ping Express Anslem Oshianebe and the COO Opeyemi Odeyale pleaded guilty to failing to maintain an effective anti-money laundering program. They both received 27-month prison sentences according to U.S legal filings.
Ping Express IT/Business Development Manager, Aleoghena Okhumale who pleaded guilty to knowingly transmitting illegal funds, received a prison sentence of 42 months.
The U.S Department of Justice disclosed that Ping Express’s anti-money laundering policy claimed that it limited first-time customer transactions to $3,000 and monthly transactions to $4,500.
The company also admitted in the court that it allowed more than 1,500 customers to violate these rules. Ping Express also admitted that it failed to seek sufficient details about the sources or purposes of the funds it helped to transmit, or the customers initiating the transmissions.
By law, Ping Express was supposed to report any suspicious transactions to regulators, but according to the U.S court filings, the fintech company violated the law by failing to make a single report on anti-money laundering in 3 years of operation.
The company disclosed that it has a software that could detect and deter transmissions initiated in “unlicensed” states, but it revealed that the software did not function. This money laundering scam and transmitting business in States where it was not licensed in the U.S by Ping Express has spelled doom for not just the executives of the company who risk jail terms, but also the company as a whole.
The company faces five years of probation and a fine of up to $500,000. The sentencing of these offenders has been set for December 19, 2022.
Ping Express’s experience should be a wake-up call to other fintech companies to take their anti-money laundering law seriously and also, they should not hesitate to report any suspicious transactions on their platform to the relevant authorities.
Fintechs today are constantly exposed to the risk of money laundering and much more. In a bid to curb such risk, one Fintech solution that has great potential to help fight money laundering is machine learning.
This program uses algorithms to analyze information, make decisions, and learn from those decisions. Machine Learning can modify its code without human oversight, so it can make faster and more accurate decisions.
This machine learning technology has been proven to review money laundering and identify obscure predictive variables that often go unnoticed by data scientists.
It might interest you to know that some fintech start-ups continue to underestimate the reach of compliance regulations which is very risky. Fintech firms must ensure to be constantly committed to preventing their company from persons seeking to launder proceeds from criminal activity or risk a jail term and fine.