The accounts of a sole proprietorship business, Company A, were reported by a bank, upon the suspicion of high turnovers in the accounts through numerous small value inter-bank fund transfers received from multiple locations.
As per the account details, the afore-mentioned business was owned by Mr. S, who was engaged in digital marketing and advertising services through social media. Mr. S along with Mr. O registered the business with the Securities & Exchange Commission of Pakistan (SECP) as a private limited company with the name as “Company A” and another business with the name “Company B”, with similar principal activities. The individuals were attracting the public to invest in online paid-to-click programs with the promise to investors of a share of the program’s profits in exchange for paying an upfront fee or buying products.
During the analysis, it was determined that Mr. S and Mr O were using sole proprietorship accounts instead of company accounts for conducting business related transactions. The APG Typologies Report 2022 118 individuals received significant funds in more than 25,000 inter-bank funds transfer transactions ranging between PKR 3,000 (approx. USD 15) to PKR 50,000 (approx. USD 252). As per records provided by the reporting entity, the individual received funds in one account from several branches of the same reporting entity while the funds were mostly transferred from unrelated counterparties like housewives, students, and salaried persons’ accounts. Company A was also reported in the news media and social media campaigns as the members of the public protested and reclaimed their investments.
Based on the findings, financial intelligence was shared with an LEA which initiated an inquiry against the reported individuals. After the completion of the LEA’s investigation, both individuals were arrested.