Transactional Pattern used to inflate account statement for Visa Purpose
A number of suspicious transactions were reported to FMU wherein similar nature of transaction activity was noticed in several accounts maintained by different individuals at ABC Bank. Based on transactional activity, it was suspected that the accounts were being used for statement structuring for unknown purpose.
After analyzing the account opening documents and statement of accounts, following observations were noticed;
Geographic Location
The individuals reported in suspicious transactions mostly belonged to Faisalabad, however some individuals were also found residents of other areas such as Lahore, Rawalpindi, Islamabad, Karachi, KPK/FATA and other different cities of Punjab (Jhelum, Mandi Bahuddin, Sargodha, Sialkot, Khushab, Jhang etc.). Below is the geographic segregation of reported individuals;
Account Opening Date
The reported accounts were opened during the period of October 2013 to January 2014 and the transactional activity in the accounts was observed during the period of November 2013 to March 2014.
Source of Funds
As per KYC documents and AOF, the source of funds was mentioned as sale proceeds of property in all the accounts.
Transaction Pattern
Apparently the transactions were used to inflate the account balances in an artificial manner to meet the criteria for different proposes e.g. education/ residency/ visit Visa etc. In this context, following types of modus operandi were adopted:
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Internal Transfers
Funds were credited through internal transfers and debited in the same manner without retention of funds.
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Banker Cheque
Funds were credited into the accounts through Banker’s Cheques and further Banker’s Cheques of same amounts were issued from the account.
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Cheque Return
Multiple Cheque return transactions in clearing mode were noticed to build the turnover in the accounts.
Inter account transactions
Based on the above transactional pattern and span of transactions, it appears that same funds were routed between the accounts to enhance the turnover in the accounts above a certain level.
Turnover in the accounts
The average aggregate activity of PKR 26.3 million was noticed in the accounts, with the average monthly turnover of PKR 5.6 million. Below is the segregation of accounts based on the aggregate turnovers;
Status of the accounts
Most of the accounts were closed by the bank due to zero balance in the accounts. Other accounts mostly remained inactive and only few accounts were active. Below is the segregation of accounts based on their current status as of 20th September 2017.
| S. No | Status | No. Of Accounts |
|---|---|---|
| 1 | Closed | 189 |
| 2 | Inactive | 69 |
| 3 | Active | 20 |
Signature Change
The signature of individuals on account opening forms were significantly different from their CNICs, 106 such instances were found out of 178, which indicate that the accounts might have been opened by a travel/immigration agent without the knowledge of the accountholders and thus construed as Benami accounts.
NICOP Holder
Many individuals were NICOP holders having their declared country of stay as UK. 59 such instances were found out of 178.
Occupation
Most of the individuals were associated with the textile business (65) or Agriculturist (27) as declared on their account opening forms, however 5 individuals were found to be engaged in VISA consultancy and Immigration services. These consultants were appeared to be linked with many of other individuals via contact numbers and counterparties.
Age of Individuals
Most of the individuals belong to middle age class. It was found that 141 individuals were falling between 30-40 age brackets.
Tax Status
The individuals mostly are not registered for tax with FBR. However, 74 individuals were NTN holder out of which only 10 individuals were active tax payer.
Conclusion & Recommendations
Based on the above analysis, it was concluded that the accounts were being used to inflate the account statements in an artificial manner apparently for the Visa purpose and that no actual economic activity took place via such transactions conducted in the accounts. As most of the accountholders belong to different cities other than Faisalabad and the accounts were mainly opened at ABC Bank, which raises concerns regarding KYC/CDD process adopted by the bank for opening of accounts.
Although, most of the accounts had been closed or inactive, but the activity was shared with the State Bank of Pakistan, keeping in view that such type of activity should not be allowed by the banks. It is pertinent to mention here that similar type of activity was reported by other banks and such instances can warrant a reputational risk at the bank’s end. Therefore, the strategic analysis was shared with the State Bank of Pakistan under the AML – Act 2010 with the suggestion to share the information of the activity conducted through these accounts in a sanitize manner with all the banks so that the banks be able to identify such instances and protect their bank from such risks originating from the highlighted activity by the individuals related to immigration/ travel businesses.