The PF regime has finally allowed the Financial Intelligence Centre (FIC) to release an edited and generally useless 2019 money laundering report.
The 2019 money laundering report attempts to paint a picture that money laundering, corruption and other financial crimes have reduced in Zambia. For example, the FIC report claims that ‘Suspected Tax Evasion From 2018 to 2019, there was a decline in cases involving tax evasion.’ The FIC is quick to laud the Zambia Revenue authority by claiming the so called reduction in tax evasion ‘ may be attributed to increased implementation and enforcement of tax laws and regulations by the Zambia Revenue Authority (ZRA)’.
The FIC report claiams that ‘In 2019, ZRA assessed ZMW 27.7 million as a result of the disseminations made by the Centre compared to ZMW 62 million assessed in 2018’.
FIC which is now headed by Mrs Irene Mambilima says ‘in 2019, the Centre analysed one hundred and one (101) STRs compared to one hundred and seventy-six (176) in 2018. A total of forty four (44) intelligence reports were disseminated to LEAs bordering on ML and various predicate offences in 2019 compared to eighty (80) in 2018.
Despite the attempt to paint Zambia as paradise, the FIC could not resist mentioning some key criminal activities that occurred in 2019. Of course FIC does not give names of the persons involved in such crimes but the Watchdog will mention the culprits one by starting on Thursday. But we mention one below:
Suspected Corruption Case 1
PEP A, head of a public institution H, manipulated the tender process and influenced the awarding of a contract to company Y for the supply of equipment at an inflated price. He received a percentage of this inflated price in return.
Case 2 Companies MC and PM, foreign owned, were awarded contracts by a public institution headed by P (THIS IS MINISTER OF HEALTH CHITALU CHILUFYA) who acquired unexplained wealth after his appointment in the public sector. Company MC transferred ZMW 10 million to a law firm. The funds were then used for the purchase of properties on behalf of P. Company V, another foreign owned company, subcontracted by Company MC, purchased properties on behalf of P. These properties were registered in the names of third parties associated to P. He was subsequently accused of concealing property reasonably suspected to be proceeds of Crime.
Case Studies: Fraud Case 1 A Zambian incorporated Company H, engaged in a campaign advertising the sale of crypto currencies. A few months after incorporation, Company H received funds from members of the public as deposits for investments in cryptocurrencies. These funds were later sent to various entities in Asia. Company H was created as a special purpose vehicle to defraud unsuspecting members of the public as they did not obtain a return on their investments.
Case 2 Public officials with access to payment systems abused their positions and embezzled ZMW 4 million. These officials created fictitious accounts onto the system as employees and paid them monthly salaries. The proceeds were used to purchase various properties.
Case study on Wildlife/ Environmental crimes
A civil servant based in a rural district where the prohibited rosewood is indigenous and earns a monthly income of ZMW 5,000 received funds in excess of ZMW 2.5 million from various third parties mostly of foreign origin. These funds were suspected to be proceeds from the sale of the prohibited rosewood and were subsequently withdrawn in the form of cash. Page 27 of 36 Environmental crimes pose significant risks to the financial system and society as a whole.
Case study A civil servant based in a rural district where the prohibited rosewood is indigenous and earns a monthly income of ZMW 5,000 received funds in excess of ZMW 2.5 million from various third parties mostly of foreign origin. These funds were suspected to be proceeds from the sale of the prohibited rosewood and were subsequently withdrawn in the form of cash.
The Watchdog will in the next few days put names to the criminals mentioned in these case studies.