In the competitive world of African business, image is everything.
Companies spare no expense to craft a compelling brand and digital presence, or so it seems.
However, behind the flashy logos and slick websites of some major corporations lies a troubling secret: the exorbitant design costs.
Of course serious companies have to pay high prices for quality work but how do you explain a multimillion dollar rebrand for a company that is even struggling to ship their core product?
As sleuths hunt for illicit funds, they naturally fixate on The Gold Mafia, dirty bank transactions and offshore shell companies. But some of the most brazen crooks have become cartographers of creative crime, disguising dirty cash as lavish spending on design.
Corporate rebranding and web design
Take the glitzy corporate rebranding and web design.
Bosses throw millions at a makeover by a part-time freelancer or an upstart designer.
Yet when the brand emerges, it looks like it came from a bundle of clip art. The vast sums paid for websites bears no resemblance to the amateurish visual identity birthed.
Like a stage magician, the rebrand distracts from financial hocus pocus happening behind the scenes.
These “vanity” sites are created using common content management systems like WordPress that even non-professionals can build.
However, multi-million dollar payments to agencies allow the firms to disguise actual money laundering transactions as website development fees.
With a few clicks and a free theme, the “million dollar” site is born.
Here is how it works
- Company executives want to move a large sum of money offshore or to hiding places where the source of the funds is obscured.
- Instead of direct transfers which would raise red flags, they commission an overpriced corporate rebrand/website design from an inexperienced designer or small firm.
- They pay millions of dollars in “fees” for the work, even though the actual designers hired have very limited portfolios and could not justify such high costs.
- The rebrand deliverables – the new logo, color palette, stationery templates – act as a facade to justify the massive payments. But the work product is often amateurish and underwhelming, indicating the disproportionate fee is unjustified. Most of the millions paid do not actually go towards the costs of designing and implementing the new brand assets. Instead, the “design firm” acts as a middleman, keeping a small cut of the fees as payment for their role in the scheme.
- They then pass most of the funds back to the client executives in the form of “rebates” or “refunds”.
- This allows the company to justify moving large sums of money to offshore accounts under the guise of legitimate business expenses for a corporate rebranding project. The amateurish redesigning work functions as a cover story to distract from the real purpose of the transaction: laundering funds by disguising them as marketing fees.
Invoices filled with Hot Air
Agencies bill clients for nebulous “research” and “consulting” at luxury rates for jobs filled with hot air. Little work is done, but the wallet-inflating invoices provide ample cover to reroute funds.
Here is how it works in “Research and Consulting”
- Design agencies will claim they are performing market research, competitor analysis, or strategy consulting for the client to justify high fees. But in reality, they do very little actual work.
- They will generate a few PowerPoint slides or a short report with generic information that took minimal effort. But the invoice will charge as if extensive research and analysis was performed. The agencies are essentially just providing a “service” to help funnel money for the client. They issue exorbitant invoices for “research” and “consulting” that allow the client to justify large payments.
- Once the agencies are paid the inflated fees, they keep a small cut as payment for their role in the scheme and pass the majority of the funds back to the client through a “rebate,” so the money can be laundered.
- The agencies provide minimal, vague “deliverables” simply to corroborate the expenses listed on the invoices. But the substance of the actual work done is negligible relative to the fees charged.
- The work product itself may even be of acceptable quality – a few relevant PowerPoint slides or bullet point summaries. But the fees charged are unjustified given the limited effort involved, indicating an attempt to disguise large payments through a seemingly legitimate invoice
