Following the sudden and unexpected death of General Sani Abacha, the noose began to tighten on Atiku Bagudu and Mohammed Abacha. And with banks refusing to do business with the offshore entities and shell companies he had created to launder billions from Nigeria, during Abacha’s reign of terror, Bagudu needed a new avenue to hide his stolen loot. Adopting tactics used by mobsters and drug lords, Bagudu became the bond market millionaire. Through a complex series of financial transactions, involving his offshore entities – Mecosta, Rayville, Standard Alliance, and Doraville, Bagudu spent a paltry $83 million to purchase Nigerian Par Bonds (NPBs), and related Payment Adjustment Warrants (PAWs); worth $572 million. The bonds generated $175 million in interest alone paid to Bagudu by the Nigerian government through Citibank New York. In effect Bagudu lent money he stole from Nigeria back to Nigeria with zero risk, and reaped huge profits.
.The cache of documents obtained by Huhuonline does not only show illegal conduct by Bagudu in this scheme, they demonstrated his addiction to ripping off Nigeria and his uncompromising resolve to steal from the Nigerian people. More importantly, the files detail how the hundreds of millions of dollars that were the proceeds from the security votes fraud and the Ajaokuta steel debt-buy-back scam that Bagudu laundered into bank accounts abroad; were used to purchase hundreds of millions of dollars of US dollar-denominated Nigerian bonds, whose interest payments were guaranteed by the US Treasury.
The US created the program to help heavily indebted poor countries restructure their debt into bonds. Under the program, US interest free bonds were issued in escrow to guarantee the payment of interest on Nigerian bonds. To encourage investors to purchase NPBs, the Nigerian government also issued PAWs with each purchase of NPBs. The PAWs yielded dividends, which were paid bi-annually by Citibank New York – the Fiscal Agent, Registrar, and Calculation Agent for the Nigerian government. In this capacity, Citibank was responsible for disbursement of interest payments on NBPs and PAWs.
The Nigerian government periodically transferred money to Citibank to fund these payments. Interest and dividend payments were then made by Citibank in US dollars to each designated bond holder. This fiduciary responsibility by Citibank New York over the NPBs formed a core part of the argument used by the US Justice Department to justify the seizure of $550 million in cash and assets owned by Bagudu and the Abacha family, in what has been described as the largest kleptocracy forfeiture action brought in the DOJ’s history.
The secret documents also expose how over the course of the conspiracy, Bagudu and Abacha transferred 190 million of stolen funds into accounts held by Eagle Alliance and Mecosta at ANZ London and $83 million into Mecosta accounts at Standard Bank London. The funds were then used to purchase NPBs worth $572 million, including $490 million at ANZ London and $82 million at Standard Bank. For politically-exposed persons, these transactions amounted not only to a serious conflict of interest; it was a classic case of a boxer betting on his opponent to win their title fight.
The confidential files disclose that of the $190 million deposited at ANZ London, $126.5 million originated from the Security Votes Fraud. An additional $15 million was transferred to ANZ London from Morgan Procurement, a company owned and controlled by Mohammed Abacha and Bagudu. Between 1995 and 1997, Morgan Procurement “won” two public contracts to buy vaccines from the Nigerian National Commission for Women and the Federal Ministry of Health, both of which were under the control of Gen Abacha’s wife, Maryam Abacha (Mohammed Abacha’s mother). The $15 million was part of $110 million received by Morgan Procurement for the contracts, of which only $48 million was used to purchase vaccines, according to the leaked documents.
The links between Bagudu and offshore entities indicted by US investigators are among the new revelations of Bagudu’s role as Abacha’s money-laundering kingpin. In September 1995, one of Bagudu’s offshore entities, Eagle Alliance entered into a Master Deferred Purchase Agreement (MDPA) with ANZ London to buy NPBs through the bank’s emerging markets program. This agreement authorized Eagle Alliance to enter into subsequent, specific deferred purchase agreements with ANZ London to acquire NPBs using funds from Eagle Alliance and financing from ANZ London. Pursuant to the MDPA, Eagle Alliance provided 30% of the purchase price from its deposits, and the remainder was financed by ANZ, with the NPBs serving as collateral for the loans. All told, Eagle Alliance paid $31.2 million to purchase NPBs worth $210 million, all of which were paid using previously looted funds by Bagudu.
On February 8, 1996, Mecosta entered into a similar MDPA with ANZ London, which authorized Mecosta to buy NPBs with its funds combined with financing provided by ANZ London. Bagudu then transferred all assets held by Eagle Alliance to Mecosta. By November 1998, Mecosta had purchased through ANZ London NPBs worth $490 million, but mounting pressure from regulators forced ANZ London to close its emerging markets operation through which the NPBs were held in Mecosta’s account. As a result, Bagudu transferred $400 million of the $490 million NPBs held in the Mecosta account at ANZ London to Deutsche Bank AG in London through DBIL in Jersey. Later, NPBs worth $325 million from this tranche were transferred to an account held by Doraville at DBIL which listed Bagudu as principal beneficiary. Bagudu transferred the remaining NPBs worth $90 million to Credit Agricole Indosuez in London.
Bagudu’s racketeering was a classic revolving door. First, NPBs worth $400 million were transferred from Mecosta account at ANZ London to Doraville’s account at DBIL. Next, DBIL transferred the NPBs to an account held in the name of Doraville at Deutsche AG London. From April 2000 to November 2006, Bagudu sold the remaining NPBs worth $325 million held in the account of Doraville at DBIL in Jersey back to the Nigerian government, netting $149,986,000 in profits, which were deposited into account number 80020796 in the name of Doraville at DBIL in Jersey.
The NPBs generated substantial income. Between 1995- 2006, Bagudu received $166 million in interest payments alone, from Nigeria for NPBs purchased with funds from the security vote fraud and Ajaokuta debt-buy-back scam. By the time the bonds were liquidated, Bagudu had raked in over $300 million in profits paid by the Nigerian government. The funds were transferred from Citibank New York into accounts in the name of Eagle Alliance and Mecosta at ANZ London and Doraville at DBIL. If Bagudu had any sense of patriotism and love for Nigeria, he should have at least moderated his greed.
On May 22, 2003, Bagudu was arrested in Houston, Texas, for extradition on warrants issued by the Bailiwick of Jersey. Bagudu subsequently entered into an agreement with Nigeria and Jersey to return over $163 million of Doraville’s assets to the Nigerian government in exchange for Jersey’s withdrawal of its extradition request and his return to Nigeria to face prosecution. A US District Court in the Southern District of Texas, Houston Division, in the case USA v. Abubakar Atiku Bagudu (Case No. H-03-434M) released Bagudu on bail (pending extradition) to his wife, Aisha Bagudu on November 19, 2003, after six months in detention. Bagudu claimed the $163 million from Doraville’s DBIL account transferred to the Nigerian government represented his share of the Doraville assets. The balance in the Doraville account (valued at $287 million) was seized by the US government in 2014.
On April 16, 2014, the Asset Forfeiture and Money Laundering Section of the Criminal Division of the US Justice Department sent a notice, complaint and arrest warrants in rem to Bagudu’s registered agents in the British Virgin Islands for the following entities: Doraville Properties Corporation; Rayville Int. SA; Standard Alliance Financial Services Ltd; Mecosta Securities Inc.; and the Ridley Group Ltd. The notice advised that verified claims needed to be filed within thirty-five (35) days of the date the Notice was received. Pursuant to the 1989 treaty on Mutual Legal Assistance in Criminal Matters between the USA and Nigeria, the US also sought and obtained the assistance of the Nigerian government in providing notice of the civil forfeiture action to Bagudu and Abacha.
Curiously, the Nigerian government through the then Minister of Justice and Attorney General of the Federation, Mohammed Bello Adoke provided affidavits to the effect that copies of the Notice, the Complaint, and arrest warrants in rem were delivered to Mohammad Sani Abacha on March 19, 2014; and Abubakar Bagudu on March 24, 2014; who at the time had become a Senator of the ruling PDP for Kebbi Central. Neither the Nigerian government nor Bagudu nor Abacha filed any counter claim to defend these assets; even though the Americans made it crystal clear to Adoke that the assets were the proceeds of corruption and money-laundering stolen from the Nigerian people.
On April 17, 2014, as the 35-day statute of limitation was fast approaching, one Charles Agwumezie filed a motion on behalf of Kenneth Nnaka, a Texas Attorney, for leave to appear pro hac vice. An attachment to the motion was a claim submitted on behalf of Godson Nnaka seeking an extension of the 35-day deadline. In the claim, Godson Nnaka, who had been disbarred by the Maryland Attorney Grievance Commission on August 21, 2012, purported to have a retainer agreement with the Nigerian government, to trace and recover Abacha’s stolen loot. But in a dramatic turn of events, on May 26, 2014, Adoke, in a sworn affidavit, told the US District Court in Washington DC that Charles Agwumezie, Kenneth Nnaka, Godson Nnaka, and Jude Ezeala were on their own; they were not authorized to represent Nigeria in connection with any effort to recover the proceeds of corruption in America. Godson Nnaka has sued the Nigerian government for breach of contract. That story is next!
