Shocking money laundering web exposed in Zim ... inside the illicit finance cycle

theindependent.co.zw · Feb 27, 2026 · Collected from GDELT

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Zimbabwe’s anti-graft watchdog, the Zimbabwe Anti-Corruption Commission (Zacc), handled nearly two dozen money laundering cases in 2022 worth about US$30 million before referring them for prosecution and asset recovery, according to new data from the Financial Intelligence Unit (FIU). The figures, contained in the FIU’s 2024 Legal Persons and Legal Arrangements National Money Laundering Risk Assessment released this week, exposed a sophisticated and evolving ecosystem of illicit financial flows involving companies, shell structures, and wealthy individuals. While the report acknowledged some progress in tackling financial crimes, it painted a clear picture of structural weaknesses. Limited investigative data, gaps in beneficial ownership transparency, and recurring schemes used to siphon money abroad remain persistent challenges. “In 2022, 20 cases worth US$29 million were referred by Zacc to the National Prosecuting Authority, resulting in asset seizures,” the FIU said. “However, insufficient data makes it difficult to assess the level of involvement of legal structures. Seven convictions were made for criminal abuse of office in legal structures.” Between 2021 and 2023, the FIU received 15 531 suspicious transaction reports (STRs) from banks, insurers, mobile money operators, money transfer agencies, and securities firms. Of these, more than 310 cases were escalated for deeper investigation. Investigators found a repeatable architecture of financial crimes, exploiting corporate structures, digital platforms, and cross-border trade. One striking case involved a Zimbabwean travel company that transferred US$307 545 to South Africa, ostensibly to import pre-paid electricity meters.Keep Reading New perspectives: Combating money laundering in real estate New perspectives: How Zimbabwe can effectively fight money laundering New perspectives: Combating money laundering and terrorist financing Govt, CSOs start dialogue on PVO Bill “The money was, however, diverted and used to buy an immovable property in Pretoria, South Africa,” the FIU said. Authorities alleged the scheme relied on fabricated documentation. “The property was registered as the property of (the travel company), which belonged to (an) individual. In May 2019, the individual allegedly instructed an associate to raise a false invoice for the supply of prepaid meters. The false invoice was used to effect the transfer of US$142 858,93 to an electric company in South Africa. The funds were diverted to attorneys in South Africa for the purchase of a certain immovable property in Pretoria. The individual later faced five counts of money laundering in contravention of the Money Laundering and Proceeds of Crime Act.” The case illustrated classic trade-based money laundering — invent an import, move foreign currency through legitimate banking channels, and then convert the funds into offshore assets beyond domestic reach. Investigators indicate such practices are widespread, with false invoicing and inflated import claims among the most effective tools for externalising capital. The FIU also highlighted digital finance as an emerging avenue for illicit flows. In 2020, one of Zimbabwe’s leading cash transfer platforms was reportedly exploited due to poor customer due diligence procedures. “This was evidenced by several accounts created with unverified identities,” the FIU said. “Such accounts were used to convert fictitious mobile money into cash, to purchase foreign currency on the parallel market for externalisation and purchase of high value assets. The FIU ordered (the firm) to re-register all agents in order to curb illicit foreign currency dealers.” Most illicit forex dealers reportedly used mobile money platforms to launder funds, with high transaction volumes distorting the foreign currency market. Authorities eventually mandated nationwide re-registration of agents to tighten controls. The FIU report underscores the role of corporate opacity in facilitating illicit flows. Shelf companies, foreign trusts, and complex ownership chains conceal beneficial owners, allowing transactions to appear legitimate while masking illicit intent. Seven corruption-related convictions were noted, though the overall financial impact remains undisclosed. One of the report’s most glaring examples involved a foreign company seeking investment approval using forged documents, including a fake receipt for regulatory fees. Due diligence revealed inconsistencies and links between a shareholder and prior externalisation offences, leading to the application being rejected. Experts note that such cases highlight vulnerabilities in investment screening systems and the risks posed by attempts to “clean” funds by entering formal sectors. The FIU also catalogued other illicit financial activities, from illegal forex trading and tax evasion to bribery, procurement fraud, and mineral smuggling. In 2023, law enforcement agencies received 106 cases from the FIU, 17 of which involved companies and trusts. Nearly half related to exchange control violations linked to parallel market activity. Others involved tax evasion, procurement fraud, corruption, and diamond smuggling. Despite these efforts, authorities cautioned that reported cases represent only a fraction of the broader problem. Zimbabwe’s losses from illicit financial flows vary depending on methodology, but credible estimates cluster between US$1 billion and more than US$2 billion annually. According to the FIU, proceeds of crime between 2019 and 2023 totalled US$6,15 billion — about US$1,23 billion per year, or roughly 3,4% of GDP. “The offences feeding these flows are diverse,” the report notes. Illegal forex trading, tax evasion, bribery, procurement fraud, mineral smuggling, and abuse of public office are common. Yet the enabling mechanism is often the same — corporate opacity,” one analysis said this week. The report diagnosed systemic vulnerabilities that allow schemes to flourish. Law enforcement agencies face resource constraints, leading to underreporting and delayed action. Complex ownership chains obscure the true owners of companies and assets, complicating prosecutions. Weak screening and due diligence processes allow illicit actors to exploit formal sectors for laundering. Transactions often involve foreign jurisdictions, creating enforcement challenges. Experts argue that addressing these weaknesses is essential to curbing Zimbabwe’s capital flight and protecting domestic revenue. The FIU’s findings also have broader economic implications. Externalised capital reduces domestic investment, undermines currency stability, and creates an uneven playing field. When illicit flows intersect with parallel markets and digital platforms, the distortions can ripple across the economy, affecting exchange rates, inflation, and investor confidence. “False invoicing and inflated import claims are effective tools for externalisation,” the FIU noted. “These schemes not only drain domestic resources, but also complicate trade statistics and revenue projections.” Digital finance, once seen as a tool for financial inclusion, is now a double-edged sword. “Addressing these vulnerabilities is critical for economic stability,” experts said. Related Topics