A government official was found having suspicious bank transactions of more than Tk520 crore during the Covid-19 pandemic by securing a government tender for a contracting firm in his wife's name.
The tender was for supplying surgical equipment to government hospitals and institutions. That official was also found maintaining bank accounts under his own and his wife's names in four foreign countries, and the amount of Tk114 crore laundered was in those accounts.
The disclosure came in the annual report of the Bangladesh Financial Intelligence Unit (BFIU) for 2019-20, which shows how pandemic fuelled illicit outflow through import and export of counterfeit Covid-19 related products by misusing various trade channels.
Citing a particular fraud case of a government official without mentioning the fraudster's name, the BFIU report on Thursday revealed that money was transferred from the bank accounts of the contracting firm to the account of another entity whose proprietor's name was published in the Panama Papers.
An analysis revealed that the government official was the ultimate controller and also the beneficiary of his wife's company.
The BFIU investigation revealed that he used to prepare fake papers of supplying goods and controlled government tenders in favour of his wife's company and even managed to get the tender without paying the minimum security deposit.
Additionally, a business entity in a foreign country in the name of that government official was detected, though a Bangladeshi cannot invest in a foreign country without approval from the appropriate authority.
After the analysis, it appeared that the government official – with the assistance of his wife – amassed a huge amount of illegitimate wealth. He then tried to legalise his illegally earned money by establishing a contracting company in his wife's name and ultimately funnelled the amount to foreign countries through illegal channels.
Based on the findings, the BFIU prepared an intelligence report and disseminated it to the Anti-Corruption Commission (ACC) for further investigation and necessary legal action.
The BFIU in its annual report said, "Crime never stops and it has not stopped during this pandemic as well."
It continued, "Mandatory lockdowns and social distancing measures have changed the way people shop, transact, and even meet each other. Today we are seeing an explosion in online shopping, most of it innocuous, such as groceries, and other necessities.
"We have also observed that the trade channels are being misused for import and export of counterfeit Covid-19 related products."
Although there were two months – April and May – of general holidays during the Covid-19 pandemic, the fiscal 2019-20 has seen an increase in the number of suspicious transactions and activities compared to that of FY2018-19.
The number of suspicious transactions increased due to several reasons, including the government's special drive on casinos, corruption, increasing awareness among reporting organisations, reads the annual report.
The BFIU received reports of 306 suspicious transactions on average in each month of FY2019-20, while the figure was 298 in the previous year. The highest number of such transactions was received in December 2019 and February 2020.
On the other hand, the lowest number of such transactions was reported in April due to the general holidays.
Besides, the BFIU received reports of 2,908 suspicious transactions from the scheduled banks. Moreover, mobile financial service (MFS) providers were the second highest reporting organisations, lodging 703 suspicious transactions to the BFIU in FY2019-20.
The BFIU analysis found that despite the availability of digital financial services, people of Bangladesh still feel comfortable doing cash transactions. People choose cash transactions to hide the source and destination of embezzled money.
Besides, for organising terrorist financing and other criminal activities, cash transactions are preferred. That is why each year the BFIU conducts strategic analysis on cash transactions considering geographical location, number and volume of cash transactions and other factors to provide strategic direction in preventing money laundering and terrorist financing.
In FY2019-20, on an average, 13.5 lakh cash transactions valuing Tk97,661 crore have been reported in each month. The highest number and volume of transactions were both in June 2020.
Bangladesh Bank Governor Fazle Kabir in his written speech said, "There has unfortunately been no let-up in financial crimes even in this emergency. New money laundering and terrorist financing schemes have been devised using sales of counterfeit medicines, vaccines and personal protective equipment.
"The Bangladesh Bank has chosen to maintain the highest state of vigilance to keep our financial system safe and prevent the abuse of stimulus packages, and necessary directives have been issued to the banks."
Abu Hena Mohd Razee Hassan, head of the BFIU, took the lead in providing guidance on preventing phishing attacks, cybercrime and other emergent threats during the pandemic situation.
The number of suspicious cash transaction reports showed an upward trend over the first three quarters of the year until the novel coronavirus induced slowdown.
The BFIU also disseminated 116 intelligence reports which combined tactical and strategic analysis, including, among others, on government procurement related corruption, scams involving foreign nationals, online gambling and casinos, contributing to a number of successful investigations.
The BFIU is aware of the new challenges and the changes in the nature of money laundering and terrorist financing threats that the next year may bring to light, Governor Fazle Kabir added.