Bank loans Telexfee investors, loses $365K & fires staff
To me this is one of those “everybody was in on it but now nobody wants to take responsibility for getting scammed” type stories.
Increasingly Africa is a hotbed of recruitment for the MLM underbelly. Over these last twelve months I’ve seen Nigeria in particular popping up time and time again in marketing efforts for various dubious opportunities.
With a notorious reputation for internet fraud, I suppose the two go hand in hand but you’ve got to wonder exactly how many Nigerian princes there to keep falling for these scams.
Today we take a look at a case in Ghana, a country a few hundred kilometers west of Nigeria.
TelexFree, bank staff making off the books loans to investors and bank management in denial… yeah, you know this isn’t going to end well.
So the story goes, a bunch of employees from Ghana’s Opportunity International bank got together with TelexFree investors and wrote them loans.
Employees involved include a Credit Officers, Relationship Managers, a Transformation Officer, Compliance Officer and Branch Manager of Opportunity International’s Madina branch.
Madina is a town in the south-east of Ghana with a population of around 137,000.
Back in December 2013, when everybody involved with TelexFree was running around naively with huge dollar-signs in their eyes, the Transformation Officer involved brought in a bunch of TelexFree affiliates seeking loans to invest in the scam.
The Branch Manager herself put the Transformation Officer in touch with the investors, allegedly cc’ing the entire branch staff and senior management of her intentions to provide them with loans.
For reasons unknown, the mention of TelexFree failed to trigger any compliance alarms.
Says Prince Asamoah Welbeck, the Transformation Officer involved,
We had a meeting and the Telexfree agents made a presentation of their business they wanted us to finance. We were given forms that have already been filled to complete and distribute without complaints.
In our normal practice orientation and assessments are done before forms are filled but with the Telex Free loans, there was no orientation done” he stated.
Orientation and assessment would appear to be due diligence that should have set off the bank’s compliance alarms.
But for some reason Branch Manager Yvone Nortey didn’t want these loans scrutinized. Instead she pre-prepared the loan forms before the loan request and sought to expedite the process.
Again, for reasons unknown, this plan worked and Opportunity Savings loaned Ghanaian’s 1.2 million GH₵ ($365,000 USD).
To put that figure into perspective, the average monthly salary in Ghana is about 3,746 GH₵ ($1,141 USD).
In March 2014, one month before TelexFree was shut down by the SEC, a bank employee went to a local TelexFree affiliate’s office to fill out their loan forms.
Once again, established regulatory procedure went out the window.
On Tuesday 4th March 2014, I visited the Telexfree business centre at Legon to fill the forms for the clients that is when I got to meet some of them. No residential assessment was done.
This was against the principle but the team leaders took responsibility during their meeting with the branch management team. Cash flow was prepared based on inflow and outflow of cash and commission on the investment.
As usual, nobody involved in the Ponzi could look beyond the jabillions of dollars everybody was going to make.
The rest is of course history, with TelexFree shutdown by the SEC on April 18th, 2014.
Nobody the bank loaned money to had time to generate a significant ROI. And having had to apply for a loan to invest, none of the loanees were in a position to make loan repayments, which the bank would have known had they of conducted background checks – but they didn’t, so Opportunity Savings took the loss.
In the aftermath of the scandal, nine employees of the bank were fired.
It sounds like an open and shut case but not according to those fired. They’re now threatening to sue Opportunity Savings for unfair dismissal.
According to Rabiatu Alidu, one of the Credit Officers involved,
Management knew everything about the Telexfree loan financing. And if (they) claimed (they) knew nothing about the (loans) why are the officials still (employing) Efia Acheampong, the operations manager and Esther Torgbor, the relationship manager?
They are keeping them because the two persons have threatened to release all the official emails sent to inform them about the transaction and expose the management team should it attempt to relieve them of their posts.
All they are trying to do is to sacrifice us to save their image but this will not work.
According to Alidu, these latest loans weren’t the first TelexFree related business the bank had engaged in.
It will interest you to know that Prince Asamoah, was adjudged best worker of the company last year for bringing this particular deal to the company after it generated a profit of 100,000 GH₵ ($30,400 USD) in the first year.
Sounds like whoever was promoting TelexFree in Madina had previously used the bank to fund their downline’s investments. And with that turning a profit, was eager to secure more funds for new recruits.
The bank having previously profited handsomely from the first round of loans, threw compliance out the window and dropped a cool $300,000.
And I’d be willing to bet if you looked hard enough, someone at the bank is related to or best friends with whoever lead the Ghanaian TelexFree collective, or at least that of it in Madina.
As for Opportunity Savings management, they don’t seem to fussed.
Spy Ghana spoke to the CEO of the bank and all he had to say was,
I believe we have institutions in Ghana like the Labour commission where they can go and lodge their complaints and they have the right to refer the case to their lawyers if they so wish and we can debate it.
Apart from this, we cannot go further.
I sack staff based on internal police and breach of contract. They have been sacked for breaching the contracts that we have with them.
We have sacked all those involved at the Madina Branch. We have also reported whatever we have lost to the Bank of Ghana. The affected workers should pray that they don’t go to jail.
This loss has not affected our ability to pay our depositors so there is no cause for alarm.
The board and management were not aware of the transaction. If we were we would have informed the board .
They (the fired employees) have gone against our internal policy and they have been sacked based on that.
Banking is about trust but when you betray… you are dealt with..
Assuming nobody at Opportunity Savings was a TelexFree investor, sounds fair enough to me.
To the fired employees, guess it’s time to release those emails or accept you got greedy and couldn’t help yourselves…
TelexFree – Changing lives even almost a year after it was shut down.