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Crack team set up for mobile money crime . . . as fight moves a gear up

A crack team of 15 experienced prosecutors has been set up to work with seasoned investigators to come up with watertight dockets and so effectively prosecute economic saboteurs abusing mobile money platforms to weaken the local currency.

Besides assigning some of his top staff, Prosecutor General Kumbirai Hodzi has also roped in experts from a swathe of sectors of the economy to assist in technical areas where criminals use more sophisticated strategies.

The saboteurs were transferring huge amounts of money from corporate bank accounts into mobile money agent lines and bulk payment lines to buy up the foreign currency offered on the streets, and many are still being prosecuted, but even with these systems being abolished or curtailed for more than a year the central dealers have managed to find other legitimate systems for their illegal activity.

The cartels have become authorities in setting the black market rates, usually without any basis on what that particular market can generate, so pushing up prices of goods and services.

In an interview, Mr Hodzi said the honeymoon was now over for the corrupt cartels.

“We have set up a team of 15 seasoned prosecutors drawn from the provinces who are led by a director.

“They are looking at violations of the exchange control regulations and manipulation of mobile money platforms to assault the local currency.

“As NPA, we are treating it as serious economic sabotage because it has been responsible for the economic suffering and low livelihood of the citizens.

“We have seen unjustified price hikes, inflation and the weakening of the currency,” he said.

Mr Hodzi said in respect of the eight related cases already in court and based on huge transactions in the first half of last year when the black-market was sent into the stratosphere before the first effective curbs, the State took a tough stance and vigorously opposed bail.

“We were very tough on the suspects and everyone was denied bail. We strongly opposed bail, confirming the seriousness of the offence.

“We are now putting more manpower to deal with these matters in addition to the other beat of land barons. We are already in the thing and the Prosecutor General’s office will play its part to ensure restoration of sanity,” he said.

National police spokesperson Assistant Commissioner Paul Nyathi said police have intensified investigations into the illegal mobile money transactions and all the corrupt cartels will be brought to book.

“Investigations have been intensified. Those involved in sabotaging the economy through abusing mobile money platforms must know that the net is now closing in.

“The police are working together with other stakeholders in Government and other sectors of the economy to ensure that people engage in clean businesses that are above board, businesses that promote economic growth.

“If anyone is implicated, the law will take its course and there are no sacred cows in this war,” he said.

Recently the bosses of eight companies were arrested for allegedly moving over $1,5 billion in illegal foreign currency deals in the first six months of last year. The deals involved transferring huge amounts of money from corporate bank accounts into mobile money agent and bulk payment lines.

Each of the eight companies moved amounts ranging from $59 million to over $300 million through their Steward Bank accounts into dozens of EcoCash agent lines that were later used as conduits to mop up foreign currency by black market dealers.

“The details are contained in court documents.

The companies and their directors were hauled to court last week charged with contravening the Exchange Control Act.

However, they are not among the 30 individuals who were last week outed by the Reserve Bank of Zimbabwe for their involvement in illegal foreign currency deals and were banned from operating bank and mobile money accounts.

According to the court documents, which have now helped to lift the veil on the underworld of illegal foreign currency market, the eight moved $1 511 470 476 in just under six months.

Kay Mudonhi Investments along with the co-accused Kudzai Mudonhi (34) and Justice Mahuni (29) allegedly moved $150 million between January 1 and June 30 last year to finance illegal foreign currency purchases.

Vision Credit Source Pvt Ltd was jointly charged with Takudzwa Godwin Rafemoyo (42) for illicitly buying foreign currency for $192 million between January and June last year.

Rafemoyo opened a bank account for Vision Credit with Steward Bank before registering five separate EcoCash agent lines, which were then used as conduits to move the money to the street buyers.

Access Finance Pvt Ltd and Singathini Raymond Chigogwana (47) were charged with buying foreign currency worth $185 million through 12 EcoCash agent lines last year.

Isau Bwerinofa (43) was charged along with Access Finance Pvt Ltd for using over $185 million to buy foreign currency through EcoCash lines. Bwerinofa is being separately charged along with Chemmodities Trading Pvt Ltd for shipping $333 million into the black market between January and June last year.

Juso Global Pvt Ltd and Justice Mahuni (29), who were arrested on September 25, are facing charges of moving $262 million from Steward Bank accounts into their EcoCash agent lines before purchasing forex through proxies.

Capital Profit Financial Services and Tapiwa Madzara (32) are being charged with funding illicit foreign currency purchases valued at $59 million.

All of the accused were denied bail when they appeared in court last week.

In May last year, the Government first suspended mobile money agent lines before banning them altogether when it became obvious that they were no longer needed in a largely digital economy.

At the same time severe limits were imposed on private mobile-money lines, and business lines became one way, able to accept payments without limit, so customers could pay, but the business holder having to swing the money into their ordinary bank account before spending anything.

The Government then intensified investigations into how the platforms were being used to undermine the stability of the local unit by setting and manipulating the unregulated black market rates at whatever level the cartels wished to create their very large profits.

The forex black market was being sustained through the use of all four mobile money platforms but EcoCash, easily the largest, was the channel of choice since it hosts over 90 percent of mobile transactions. Just as it is the easily the largest legal and licit conduit for so many normal transactions, so the criminals made it their “central pivot for manipulating the black market rates.

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