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Tag: fraud

  • UK govt’s inquiry reveals massive fraud in Oyakhilome’s Christ Embassy [See findings]

    Following years of long investigation into the finances of United Kingdom (UK) branch of Christ Embassy, founded by popular mega-church pastor, Chris Oyakhilome, the UK Charity Commission has indicted the church’s board of trustees of a wide range of fraudulent practices including illegally paying more than N827 million (£1,767,250) to entities and organisations it shares close relationships with.

    According to the outcome of the inquiry published by the Charity Commission on its website last month, the church’s board of trustees was incriminated for shoddy management of the church’s account, arbitrary and curious payments, failure to comply with its grant-making policy, inadequate recording of its decision making processes and serious misconduct and/or mismanagement in the charity’s administration.

    In one particularly disturbing instance, the inquiry found evidence the church may be laundering or diverting funds of up to N288 million (£615,420.00) from its UK branches to six accounts controlled by the church’s Nigerian branch, Christ Embassy Nigeria.

    The Charity Commission also found that the church, which was founded in 1996 and has over 90 worship centres across the UK, illegally registered three properties in the names of two members of its board of trustees, failed to pay taxes worth over £250,000 on expenditures by employees, failed to secure adequate insurance, and had an instance of criminal violation of British town planning and building regulations.

    Issues under Investigation
    On 29 July 2013, the Commission opened a statutory inquiry (the Inquiry) into the charity under section 46 of the Charities Act 2011 (the Act).

    The Inquiry closed with the publication of this report.

    The scope of the Inquiry was to examine a number of issues including:

    *the transactions between the charity and “partner organisations” that include grants made to a number of unidentified entities and Loveworld Television Ministry, Healing School, International School of Ministry, Christ Embassy France, Christ Embassy Canada, IPCC Conference and Rhapsody of Realities

    *the administration, governance and management of the charity by the trustees with specific regard to connected party transactions in respect of payments to Loveworld Limited and the management of conflicts of interest

    *the financial controls and management of the charity

    *whether or not the trustees had complied with and fulfilled their duties and responsibilities as trustees under charity law

    Findings
    Transactions between the Charity & “partner organisations”
    The Inquiry team examined the accounts of the charity, for the period 2009-2011 which showed that the charity had paid substantial grants to organisations classified as “partner organisations”.

    During 2009-2011, the charity’s accounts show grants amounting to £1,281,666 were paid to Loveworld Television Ministry; £118,995 to Healing School, £186,616 to International School of Ministry, £10,000 to Christ Embassy Canada, £10,566 to Christ Embassy France, £37,216 to IPPC Conference and £77,266 to Rhapsody of Realities.

    The trustees provided the Commission with a copy of their grant making policy, and admitted to the Inquiry that “Prior to the involvement of the Charity Commission the grant making practice consisted of a discussion by the Trustees at a Trustee meeting regarding who should receive grant”.

    Following his appointment on 6 August 2014, the Interim Manager (the IM) examined the charity’s records and found no evidence of compliance with the Grant Making Policy. Documents examined, by the IM, demonstrated a lack of records and receipts to account for grants made and there appeared to be little consideration given to whether the receiving parties had expended grants appropriately and for intended purposes, as was required by the policy.

    This demonstrates failure to comply with its grant making policy and inadequate recording of decision making by the trustees which is misconduct and/or mismanagement in the administration of the charity.

    Administration, governance and management of Charity by trustees-specific regard to connected party transactions in respect of payment to Loveworld Limited (also known as Loveworld Television Ministry – registered number 4691981) and management of conflict of interest
    The inquiry had serious concerns regarding the trustees’ decision making relating to the charity’s relationship with Loveworld Limited.

    It was established that Trustee C, was the sole shareholder of Loveworld Limited since its incorporation in March 2003. Trustee C had also been trustee of the charity between October 2009 and October 2015. The primary objective of the Loveworld Limited was to advance Christian programming in the UK and to provide entertaining and educational programmes for the diverse demographics of the UK, which it did by carrying out both radio and television broadcasting services.

    The trustees informed the Inquiry, payments made by the charity to Loveworld Limited were not grants/donations as indicated in their accounts but represented payments for broadcasting services provided by the company to the charity. On 28 March 2013, the trustees were asked to provide all documentation held by the charity or its trustees that recorded the decisions made in respect of the payments by the charity to Loveworld Limited. On 19 September 2013, the trustees provided only two sets of minutes of trustee meetings (minutes of trustees meeting dated 6 January and 6 April 2012) that appeared relevant to the issue. However, neither set of minutes included any decision or resolution to make payments to a company of which one trustee was sole shareholder.

    The trustees did not have any formal contracts in place, or indeed rationale for using Loveworld Limited as opposed to any other broadcaster. Additionally the IM, during his inspection of books and records found no evidence to suggest that any of the trustees considered whether the costs charged by Loveworld Limited were better value than the costs charged by any other service provider. The trustees have failed to take, or have failed to record, any proper decisions as to why such payments are in the best interests of the Charity.

    The IM confirmed that as early as 2009, the Audit Report highlighted to trustees that transactions with organisations and companies controlled by trustees were required to be disclosed in the financial statements as related party transactions. Auditors also recommended that trustees seek professional advice on whether these payments were permitted under their governing document, discuss and decide whether the payments were in the best interests of the charity and minute those discussions, ensuring that any conflicted parties withdraw from the meeting during discussions. The IM’s investigation into these matters found that this advice had not been followed and in particular there was no evidence that the trustees had sought legal advice.

    The IM’s scrutiny of charity records and documents demonstrated that the trustees had failed to comply with the terms of the charity’s governing document and that they failed to comply with the requirements of section 185 of the Act in paying for services by a company owned by a trustee.

    Additionally, the Inquiry identified that the charity had purchased a property in March 2006, costing £1.8 million and allowed Loveworld Limited free use of the property from 2006 until September 2012. The trustees informed the Inquiry that Loveworld Limited had only occupied a “small part of the premises”, on an informal basis, with the charity using the premises themselves until February 2014. They informed the Inquiry that the arrangement had been formalised since 2012 and the company was charged £75,000 per year for use of the property. The Inquiry considers that this level of rent indicates that Loveworld Limited occupied a substantial proportion of the building.

    The trustees failed to demonstrate that rent for occupation of the premises was a properly assessed market rent which would cover the charity’s overheads. The trustees stated, that the yearly rental income covered all mortgage costs incurred by the charity, however later stated that the charity’s annual mortgage payment was higher than this.

    It was unclear to the Inquiry how the permitted, free use of the premises to Loveworld Limited between 2006 -2012 was in the best interests of the charity and was properly authorised.

    This indicates that the trustees failed to act in the charity’s best interests or with reasonable care and skill in terms of their decision-making and in the negotiation of the arrangements with Loveworld Limited and in not seeking appropriate advice regarding formalising occupation of premises by the company. In addition, the fact that the charity was also subsidising a proportion of the company’s utility bills indicates a lack of reasonable care and skill and a failure to use the charity’s resources responsibly. These actions were not in the charity’s best interest or in furtherance of its objects and were misconduct and/or mismanagement in the administration of the charity.

    Ventaja Limited
    An audit conducted by the IM on appointment also identified purchases in excess of £30,000 by the charity from Ventaja Limited – trustees’ reports and financial statements for year ending 31 December 2013: the charity declared £44,925 of purchases made from Ventaja Limited for decorating and the construction of a stage. The company was wholly owned by Trustee G. The payments were made while, Trustee G was church pastor and zonal pastor (prior to being appointed trustee in May 2014). His wife was also director of the company, church pastor and a salaried employee of the charity. The IM found evidence indicating that Trustee G had employed the services of Ventaja Limited to provide services to the charity but it was unclear from the charity’s records what considerations were made regarding potential conflicts of interest. It is unclear to the Commission that the decision making trustees, in position at the time payments were made, were acting only in the interests of the charity.

    The trustees failed to provide any records to evidence that conflicts of interest had been identified or correctly managed prior to the opening of the Inquiry. Although the trustees provided the inquiry with a copy of their new “Conflicts of Interest Policy” in their 2013 response, they did not have any policy which covered the conflict which arose as a result of Trustee G, being a church pastor and trustee, authorising payments from his church to his company and therefore effectively paying his own company. The trustees failed to demonstrate that they had recognised or properly managed conflicts of interest. Consequently the Inquiry found this was misconduct and mismanagement in the administration of the charity.

    Financial control & management of the Charity
    When interviewed by the Inquiry in October 2013, the trustees explained the structure and administration of the charity to the Commission. The structure involved Chapters (also known as churches) within the charity which were spread across the UK with the use of over 100 premises. The IM found that cash collection and payment recording processes were not uniform across the charity, with a number of basic key controls (for example timely bank reconciliations or maintenance of the SAGE records ) found to be lacking.

    Bank Accounts/Assets
    The inquiry identified nine active bank accounts that the trustees identified as holding funds belonging to Christ Embassy Nigeria (Christ Embassy Nigeria is a separate company to the charity). The inquiry found no evidence to suggest that any of the banking institutions were aware that they were holding funds controlled by Christ Embassy Nigeria. In addition, the accounts were not named in such a way as would indicate the funds are controlled from Nigeria: for example, two of the active accounts are named Christ Embassy East London.

    The inquiry, not being satisfied that the funds held in these accounts were owned by Christ Embassy Nigeria, exercised legal powers and issued orders dated 8 august 2014, under section 76(3)(d) of the Act, freezing six of these nine bank accounts, protecting funds to a value of £615,420.

    In the absence of clear evidence to support the trustees’ position, the Inquiry concluded that funds held in the accounts belonged to the charity and these accounts remained frozen until the order was revoked on 24 August 2016. The Inquiry being satisfied that the new board of trustees had assumed control of the charity’s property discharged the freezing order on 24 August 2016.

    This demonstrates the trustees’ failure to deal with the bank accounts appropriately and their lack of understanding of financial management and the importance of clearly identifying the charity’s property and/or assets held on behalf of another entity and is mismanagement and/or misconduct in the administration and governance of the charity by the trustees.

    Tax related issues
    The IM informed the Inquiry that the trustees’ failed to submit the charity’s 2010-11 and 2012-13 Self-Assessment Tax returns on time to HMRC thereby incurring penalties for late submissions. In addition, the IM found that the trustees had failed to comply with information Notices issued by HMRC thus incurring further penalties.

    The trustees’ non-compliance and failure to submit the charity’s Self-Assessment forms within statutory deadlines resulted in scrutiny by HMRC creating a risk to the charity’s assets in regard to financial penalties incurred and is further evidence of trustees failing in their duty to protect and manage resources responsibly.

    Gift Aid is available on donations made by UK tax payers such that the charity can reclaim the tax already paid on the donation by the donor. This means the charity can receive an extra 25p for every £1 donated. It is the trustees’ responsibility to ensure that the charity has effective systems and internal controls in place to ensure complete and accurate returns are made, reducing the risk of amounts being reclaimed by HMRC and ensuring that the charity receives the Gift Aid promptly and with confidence.

    The IM established that the charity had failed to maintain:

    *sufficient records or processes to show that expenditure by employees had not been an employee benefit and therefore subject to tax
    *sufficient records to show that charity vehicles were being used solely for charitable purposes and not used by trustees/employees for private use
    *sufficient records to support the charity’s claim to Gift Aid and to demonstrate the expenditure was in fact charitable

    The IM dealt with these inquiries and agreed a settlement with HMRC. During discussions with HMRC, the IM made payments on account of £250,000 in order to minimise interest/penalty charges.

    The IM informed the Inquiry, in excess of £1.4m of expenditure was disallowed by HMRC and became subject to tax.

    The IM reached final settlement over these matters prior to his discharge.

    The trustees’ failure to maintain sufficient records and processes to account for expenditure resulted in scrutiny by HMRC creating a risk of criminal proceedings and loss to the charity’s assets in regard to tax liabilities and is further evidence of trustees failing in their duty to protect and manage resources responsibly.

    Whether complied and fulfilled duties and responsibilities as trustees under charity law

    The Inquiry found a number of breaches of their legal duties by the trustees as evidenced in the previous sections of this report. Additionally the Inquiry found evidence that the trustees exposed the charity, its assets and/or its beneficiaries to harm or undue risk for example:

    Property Related matters
    The charity is unincorporated, and as such does not have legal personality and cannot hold property in its own name. Instead property must be held on behalf of the charity by nominated individuals (known as holding trustees, and often in practice one or more of the charity’s trustees). From time to time these individuals will change for example due to retirement or death, and the legal ownership of the property will need to be transferred to the new trustees to ensure that the Land Registry records are accurate.

    The charity’s main asset other than cash was its ownership of a number of properties. The Inquiry identified 3 UK properties that were not disclosed to the Commission in the trustees’ first responses or during the October 2013 meeting. The trustees asserted that despite the legal title of the properties being vested in the name of two of the charity’s trustees, the properties “were acquired on behalf of, and held in trust for, Christ Embassy Nigeria”.

    The Inquiry noted that the Land Registry entries in respect of the 3 properties made no reference to the beneficial owner being Christ Embassy Nigeria and documentation supplied by the trustees provided no evidence to support their assertions. None of the Land Registry proprietorship registers differed in any material way from those of the properties originally disclosed to the Commission as belonging to the charity. These matters were explored further by the IM. His investigations confirmed that the properties were held legally and beneficially by the charity and that there was no trust in place suggesting they were held on behalf Christ Embassy Nigeria.

    The Inquiry obtained evidence that the trustees’ failed to ensure land registry details for charity properties were amended once trustees resigned. This was raised a number of times by Auditors in their reports from 2009 onwards and as a result the trustees failed in their duties and responsibilities as trustees to act in the charity’s best interests.

    Insurance
    The Inquiry found that the trustees failed to secure adequate insurance to protect charity assets and protect against claims for accidental damage to property/or compensation for accidental injury to third parties. The IM was made aware of an outstanding claim in February 2015, brought by a member of the congregation who was injured at a charity premises in 2012. The IM sought to identify whether any relevant insurant was in place. The trustees confirmed that there was no relevant insurance cover and following legal advice obtained by the IM, he settled the claim, in order to avoid lengthy and costly litigation.

    The failings of trustees to act appropriately left the charity open to financial and reputational risk and losses, as well as to risk of litigation.

    Planning & Building
    The trustees failed to ensure that a property purchased by the charity had the necessary planning permission for use as a place of worship – D1 use as Non-Residential institutions, which include a place of worship and church hall. The previous owner had applied for permission to use the property as a place of worship, in 2003 but the planning application had been refused by the local authority. The charity appealed the decision unsuccessfully. Enforcement action was commenced by Southwark Council (18 April 2011). This was also unsuccessfully appealed by the charity. The continued unauthorised use of the premises as a place of worship by the charity, exposed it to enforcement action by the Council. The IM team liaised with the Council to permit a planned exit from the premised which was vacated in January 2015.

    The existence of the enforcement notice is a criminal matter. Any breach of the enforcement notice and continued unauthorised use of the premises as a place of worship exposed the charity to prosecution by Southwark Council. Legal advice obtained by the IM confirmed that the breach could have led to criminal sanctions being imposed against the charity and potentially exposed the charity to confiscation proceedings under the Proceeds of Crime Act.

    This demonstrates the trustees’ lack of understanding regarding planning law and regulations which exposed the charity to substantial financial risk as well as legal costs.

    Conclusions
    The Inquiry concluded that there was serious misconduct and/or mismanagement in the charity’s administration. The former trustees, at the relevant times had not complied with or fulfilled their duties as trustees under charity law. They failed to:

    *exercise reasonable care and skill in the execution of their roles and as a result exposed the charity to risk and financial loss
    *ensure sufficient financial controls and procedures to protect the charity’s property file their annual accounting information, in accordance with their statutory obligations, on time
    *ensure that conflicts of interest were effectively managed comply with the terms of the charity’s governing document in relation to remuneration of trustees
    *obtain professional advice during their decision making process and to properly record their decision-making
    *comply with planning law and regulations and adhere to enforcement notices, causing the charity substantial financial loss
    *address the need for Health & Safety compliance and the lack of adequate property insurance exposed the charity to considerable losses which could have been avoided or minimized with proper management and prompt action

    In light of the findings and evidence of misconduct and/or mismanagement, the Inquiry exercised its legal powers under section 79(2)(a) of the Act to remove two of the trustees of the charity.

    However the trustees subject to regulatory action resigned prior to the Commission being able to complete the process. Section 79(5) and 82 of The Charities (Protection and Social Investment ) Act 2016 has closed this loophole, thereby allowing the Commission to proceed to remove a charity trustee who has resigned following the Commission having given notice to the charity trustees of its intention to make a removal order. The law has since been amended so that resignations following the Commission issuing a notice of intention to remove a trustee would not prohibit the trustee’s removal and consequent disqualification from action as a trustee in the future.

    Regulatory Action Taken
    During the course of the Inquiry the Commission exercised its legal powers (Sections 47, 52 and 54 Charities Act 2011), provided by the Act, to issue various orders and directions for the purposes of information gathering from local authorities, private individuals and companies, including financial institutions.

    The Inquiry directed trustees to a meeting on 18 October 2013 to discuss regulatory concerns and seek further explanation from the trustees. The charity’s books and records were also inspected on 13/14 November 2013.

    The Inquiry, being satisfied in accordance with section 76(1) of the Act, that there had been misconduct and / or mismanagement in the administration of the charity and that it was necessary or desirable to act for the protection of the property of the charity, used a number of regulatory powers, under the following sections of the Act:

    *section 76(3)(d) orders (8 August 2014), directing the banks not to part with the charity’s property without the Commission’s prior written consent, protecting £615,420 of the charity’s funds

    *section 76(3)(g) appointing an Interim Manager on 6 August 2014 (appointment to take effect from 11 August 2014) and then under 337(6) varying the order (25 January 2016) to authorise the
    *Interim Manager to appoint a new board of trustees
    section 337(6) discharging (18 November 2014) the order not to part by further order, once the

    *Interim Manager assumed control of the charity’s property

    The former trustees exercised their right to appeal (8 August 2014) to the First-tier Tribunal, General Regulatory Chamber (Charity) against the order appointing the Interim Manager. The appeal was withdrawn on 20 January 2015 with the charity’s legal representatives, notifying the Commission that the trustees were “now willing to accept that the statutory threshold under section 76 of the Act was met in the present case”.

    Appointment of an interim manager
    The Inquiry appointed an interim manager, Rod Weston of Mazars LLP, (the IM) on 6 August 2014 under section 76(3)(g) of the Act to take over the management and administration of the charity to the exclusion of trustees. The trustees were not excluded from performing the religious and/or spiritual functions connected with their roles as Pastors within the charity.

    The scope of the IM’s appointment included:

    *taking control of the management and administration of the charity to the exclusion of trustees and taking steps to secure and protect charity property

    *reviewing the governance and administration of the charity and taking remedial action in the best interests of the charity

    *reviewing the charity’s financial controls, systems and reporting procedures, safeguarding funds and ensuring proper expenditure controls and governance
    consider whether any of the decision making trustees were personally liable for any breach of duty/loss of the charity, taking remedial action to regularise any breaches of duty in the best interest of the charity

    The costs of the IM’s appointment, including legal advice and fees that would have been necessary and incurred by any trustee, amounted to £1,244,983.50 excluding VAT. The costs of the IM’s appointment were met out of the charity’s funds and are itemised as follows:

    *fees directly related to work as IM – £390,358.40
    *professional fees – £854,625.10 (relating to work conducted by 3rd parties on behalf of the IM)
    *In addition £208,000 of work was undertaken by the IM on a pro bono basis.

    As part of his appointment, the IM completed a full governance and infrastructure review of the charity and its activities. His initial findings, on 9 October 2014, corroborated the Commission’s regulatory concerns relating to the charity, reporting that “the board of trustees appears to be fragmented” and “appear to have little appreciation of their roles, duties and obligations as Trustees”. He identified a number of Health and Safety risks and concerns as well as legal issues relating to property matters which had failed to be dealt with by the trustees and which posed financial risks to the charity. The IM’s investigations found failings in the charity’s governance, leadership and management structures and personnel, including identifying that the charity had insufficient financial controls and procedures.

    Remedial actions were taken to regularise the charity’s governance to ensure it was fit for purpose. This encompassed the following:

    *establishing a central record of all properties leased and/or rented by the charity to ensure that the terms of leases were being met appropriately and suitable exit plans were in place where leases were due to expire
    *establishing an accurate record of assets (ownership of a number of properties, motor vehicles and a range of fixed assets ) owned by the charity, gaining control of the charity’s property portfolio and cash reserves – the IM reduced the number of bank accounts in operation from approximately 40 to 8 and in September 2015 took control of just under £12,000,000

    *introduction and implementation of financial controls, systems and reporting procedures, regularising the management of income and expenditure

    *Health and Safety audits and fire risk assessments were carried out; training provided to staff and implementation of suitable Health & Safety policies and procedures
    extensive liaison with HMRC resulting in settlement of the charity’s tax liabilities
    recruitment of new board of trustees

    *induction and training of new trustees

    Restitution
    On 18 November 2015, the IM considered professional advice and the particular circumstances of this case and decided that restitution (by way of civil claims against former trustees for breaches of duties and losses to the charity was not in the best interests of the charity.

    Following the appointment of a new Board of Trustees on 12 April 2016, significant progress has been made to address the governance and improve oversight and control by the new trustees, as a result of which the IM was discharged on 12 April 2016.

    Issues for the wider sector
    Financial Controls & Accounting Records
    Proper financial controls are a necessary feature of any well-run organisation. Because of the special characteristics of the charitable sector, they play an essential part in helping to show potential donors and beneficiaries that a charity’s property is safeguarded, and that its management is efficient.

    Trustees are equally responsible for the overall management and administration of the charity. Every charity’s accounting records must be sufficient to show and explain its transactions and disclose with reasonable accuracy its financial position. Trustees should ensure that financial controls are not only adequate but provide sufficient information to satisfy the trustees that the controls are being observed. If, due to the nature of the charity, its work, location and /or set up the trustees delegate supervision of financial arrangements to one or a small number of trustees or employees, they need to ensure that there are arrangements in place for proper reporting back to the whole trustee body. In this way, system failures or issues can be identified at an early stage.

    Therefore, in order to show that they are complying with their legal duties, trustees must keep records and an adequate audit trail to show that the Charity’s money has been properly spent on furthering the Charity’s purposes for the benefit of the public.

    Conflicts of Interest Policy
    Charity trustees should ensure that they have a conflicts of interest policy in place to ensure that they are fully aware of their responsibilities and that any conflicts that do arise are appropriately managed.

    Where a charity trustee has a conflict of interest they should follow the basic checklist set out in the Commission publication Conflicts of interest: a guide for charity trustees (CC29) and where necessary or appropriate take professional advice.

    The law states that trustees cannot receive any benefit from their charity in return for any service they provide to it or enter into any self-dealing transactions unless they have the legal authority to do so. This may come from the charity’s governing document or, if there is no such provision in the governing document, the Commission or the Courts. Further information is available from Trustee expenses and payments (CC11).

    Charity Property
    Charity trustees have a general duty to manage their charity’s resources responsibly, reasonably and honestly. This means not exposing their charity’s assets, beneficiaries or reputation to undue risk. It is about exercising sound judgement and then taking decisions that a reasonable body of trustees would do.

    Trustees must put appropriate policies, procedures and safeguards in place and take all reasonable steps to ensure that these are followed.

    If a charity owns land or buildings, trustees need to know on a continuing basis what condition it is in, that it is being properly used, and that adequate insurance is in place. The essential trustee: what you need to know, what you need to do (CC3) makes clear that decisions about charity land and property are important. If the charity owns or rents land or buildings, the trustees need to:

    *make sure the property is recorded as belonging to the charity
    know on what terms it is held
    *ensure it is properly maintained and being correctly used
    *make sure the charity has sufficient insurance

    A charity’s governing document or the general law can provide a ‘power to insure’. If the governing document imposes a positive duty to insure, if trustees then fail to insure property, this will be a breach of trust. More details are available in the Commission’s guidance Charities and insurance (CC49).

    Trustee Decision Making
    Charity trustees are responsible for governing their charity and making decisions about how it should be run. Making decisions is one of the most important parts of the trustees’ role. Trustees can be confident about decision making if they understand their role and responsibilities, know how to make decisions effectively, are ready to be accountable to people with an interest in their charity, and follow the 7 principles that the courts have developed for reviewing decisions made by trustees. Trustees must:

    *act within their powers
    *act in good faith and only in the interests of the charity
    *make sure they are sufficiently informed
    *take account of all relevant factors
    *ignore any irrelevant factors
    *manage conflicts of interest
    *make decisions that are within the range of decisions that a reasonable trustee body could make

    It is important that charity trustees apply these 7 principles when making significant or strategic decisions, such as those affecting the charity’s beneficiaries, assets or future direction.

  • Four Nigerians, 11 others charged in New York with $18m fraud

    Four Nigerians, 11 others charged in New York with $18m fraud

    At least four Nigerians were among the 15 defendants charged In Manhattan Federal Court on Tuesday for $18 Million fraud.

    The Nigerians are Oladayo Oladokun, Farouk Kukoyi, Baldwin Osuji and Henry Ogbuokiri.

    Geoffrey S. Berman, United States Attorney for the Southern District of New York, Dermot Shea, the Commissioner of the Police Department for the City of New York, Philip R. Bartlett, the Inspector-in-Charge of the New York Division of the U.S. Postal Inspection Service, Patrick Freaney, the Assistant Special Agent-in-Charge of the New York Field Office of the United States Secret Service, and Peter C. Fitzhugh, the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, announced the unsealing today of a criminal complaint charging the 15 defendants.

    They were charged with conspiracy to commit wire fraud and bank fraud.

    Four defendants were arrested on Tuesday in the District of Maryland, the District of Columbia, and the Eastern District of Virginia, and were to be presented in those districts’ federal courts.

    One defendant is in state custody and will be presented at a later date. Ten defendants remain at large.

    U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants conspired to steal millions of dollars by stealing identities, opening fictitious bank accounts, and depositing stolen checks – or conning victims to wire funds – into those accounts. All told, as alleged, the scheme netted more than $18 million and victimized numerous individuals and businesses. Thanks to the combined efforts of our law enforcement partners, the game is up.”

    As alleged in the criminal Complaint:

    Oladayo Oladokun, Farouk Kukoyi, Baldwin Osuji and Henry Ogbuokiri, along with JOSHUA HICKS, ANTHONY LEE NELSON, DERRICK BANKS, IBRAHIIMA DOUKOURE, JAMAR SKEETE, PAUL YAW OSEI JR., KOWAN POOLE, DARREL WILLIAMS, DARYL BARTLEY, GARNET STEVEN MURRAY-SESAY, a/k/a “Steven Garnet Murray-Sesay,” and ANDREW HEAVEN participated in an $18 million fraud scheme consisting of three key phases.

    First, members of the conspiracy opened more than 60 business bank accounts using the real personal identifying information, including names and social security numbers, of identity theft victims. Second, members of the conspiracy deposited money into these bank accounts that they obtained by defrauding victims. Third, members of the conspiracy accessed the fraud proceeds by transferring the proceeds into other bank accounts or by withdrawing cash.

    Members of the conspiracy typically defrauded their victims in one of two ways. In some instances, members of the conspiracy deposited stolen or forged checks. For example, members of the conspiracy obtained three checks that had been mailed by a national sports league from New York, New York, and deposited those stolen checks into bank accounts that were opened in the names of the intended recipients. In other instances, members of the conspiracy deceived victims into making electronic transfers. For example, a member of the conspiracy posing as a victim’s financial adviser caused the victim to wire money from a bank branch in New York, New York, to a bank account controlled by members of the conspiracy.

    To date, law enforcement has identified more than 100 fraudulent transactions in furtherance of the scheme, totaling more than $18 million.

    All defendants – Oladokun, 46, Kukoyi, 33, Osuji, 31, Ogbuokiri, 32, HICKS, 24, NELSON, 28, BANKS, 27, DOUKOURE, 61, SKEETE, 36, OSEI, 32, POOLE, 29, WILLIAMS, 62, BARTLEY, 58, MURRAY-SESAY, 35, and HEAVEN, 49 – are charged with conspiracy to commit bank fraud and wire fraud, which carries a maximum sentence of 30 years in prison.

    Seven defendants – OGBUOKIRI, HICKS, BANKS, POOLE, WILLIAMS, BARTLEY, and MURRAY-SESAY – are also charged with aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison.

  • US seizes jet of Nigerian billionaire indicted in multi-million dollar fraud

    The US federal authorities have seized an aircraft belonging to a Nigerian facing multi-million dollar fraud charges in the country.

    A report published WSB-TV, detailed how the seizure was made on Tuesday at the Peachtree DeKalb Airport in Georgia.

    Federal agents were said to have ransacked the aircraft for evidence, while another team searched for drugs and other contraband.

    The authorities, however, did not mention the name of the Nigerian whose aircraft was seized.

    “For the most part, people don’t even understand. They don’t know what’s happening in Atlanta, Georgia,” one of the special agents said.

    “This is all day, every day. I mean, this is the fruits of our labor, and this is the successes of a great team effort by our state, local and federal partners coming together to hit the bad guys where it hurts, in their pocket.

    “When we see a certain type of aircraft get sold, it raises our suspicions.”

    Recall that in November, US authorities indicted Allen Onyema, chief executive officer of Air Peace, for allegedly moving more than $20 million from Nigeria through US bank accounts in a scheme involving false documents based on the purchase of aircraft.

    Onyema was said to have started travelling frequently to Atlanta, where he opened several personal and business bank accounts. Between 2010 and 2018, over $44.9 million was allegedly transferred into his Atlanta-based accounts from foreign sources.

    Onyema was indicted alongside Ejiroghene Eghagha, the airline’s chief of administration and finance, who is said to have committed aggravated identity theft in connection with the scheme.

    A US district court of the northern district of Georgia was also reported to have issued a warrant to arrest Onyema and authorised US marshals service to bring him into custody.

    The billionaire businessman has denied any wrongdoing, expressing the willingness to clear his name.

  • Alleged credit card fraud: Court adjourns Naira Marley’s trial

    Alleged credit card fraud: Court adjourns Naira Marley’s trial

    A Federal High Court in Lagos on Wednesday adjourned until Thursday, continuation of trial of a musician, Azeez Fashola (a.k.a. Naira Marley), who is facing fraud and theft charges.

    The case was adjourned following a letter by defence counsel, Mr Olalejan Ojo (SAN), who was not available.

    The Economic and Financial Crimes Commission (EFCC) preferred an 11-count charge against the musician.

    The charges border on conspiracy, possession of counterfeit credit cards and fraud.

    One Yad Isril, still at large, was charged alongside the musician.

    Fashola, who sang the popular song: “Am I a Yahoo Boy?”, was arraigned on May 20 before Justice Nicholas Oweibo, but he pleaded not guilty.

    The court granted him bail in the sum of N2 million with two sureties in like sum.

    According to the EFCC, he committed the offences on different dates between Nov. 26, 2018 and Dec.11, 2018, as well as May 10, 2019.

    The commission alleged that Fashola and his accomplices conspired to use different Access Bank ATM cards to defraud their victims.

    It alleged that the defendant used Access Bank credit card number 5264711020433662, issued to another person, in a bid to obtain fraudulent financial gains.

    The EFCC also said that he possessed counterfeit credit cards belonging to different people, with intent to defraud which amounted to theft.

    The alleged offences contravene the provisions of Sections 1 23 (1) (b), 27 (1) and 33(9) of Cyber Crime (Prohibition) Prevention Act, 2015.

  • Alleged credit card fraud: Court adjourns Naira Marley’s trial

    Alleged credit card fraud: Court adjourns Naira Marley’s trial

    A Federal High Court in Lagos on Wednesday adjourned until Thursday, continuation of trial of a musician, Azeez Fashola (a.k.a. Naira Marley), who is facing fraud and theft charges.

    The case was adjourned following a letter by defence counsel, Mr Olalejan Ojo (SAN), who was not available.

    The Economic and Financial Crimes Commission (EFCC) preferred an 11-count charge against the musician.

    The charges border on conspiracy, possession of counterfeit credit cards and fraud.

    One Yad Isril, still at large, was charged alongside the musician.

    Fashola, who sang the popular song: “Am I a Yahoo Boy?”, was arraigned on May 20 before Justice Nicholas Oweibo, but he pleaded not guilty.

    The court granted him bail in the sum of N2 million with two sureties in like sum.

    According to the EFCC, he committed the offences on different dates between Nov. 26, 2018 and Dec.11, 2018, as well as May 10, 2019.

    The commission alleged that Fashola and his accomplices conspired to use different Access Bank ATM cards to defraud their victims.

    It alleged that the defendant used Access Bank credit card number 5264711020433662, issued to another person, in a bid to obtain fraudulent financial gains.

    The EFCC also said that he possessed counterfeit credit cards belonging to different people, with intent to defraud which amounted to theft.

    The alleged offences contravene the provisions of Sections 1 23 (1) (b), 27 (1) and 33(9) of Cyber Crime (Prohibition) Prevention Act, 2015

  • Banker remanded over alleged N50m fraud

    Banker remanded over alleged N50m fraud

    Mr Kehinde Agbabiaka, an Ibadan-based banker, was on Monday remanded in Agodi Correctional Centre by Justice Patricia Ajoku of the Federal High Court, Ibadan, over alleged N50 million fraud.

    Ajoku ordered Agbabiaka to be remanded after he had pleaded not guilty to the 34 count-charge leveled against him.

    She adjourned the case till Feb. 6, 2020 for commencement of trial as well as hearing of bail application.

    Counsel to the Economic and Financial Crimes Commission (EFCC), Mr S. Bashir, had earlier told the court that the accused was arraigned on 34 count-count bordering on forgery, unlawful conversion and stealing of N50 million belonging to one Mrs Justina Okoye.

    According to Bashir, Agbabiaka committed the crime on different dates between Janurary and August while he was attending to Okoye as a customer of Fidelity Bank of Nigeria.

    The prosecutor further stated that Agbabiaka, an account officer of Fidelity Bank, at various times forged the signature of the complainant to withdraw the N50 million.

    Bashir said that the offence contravened Section 1 (2) and (C ) of the Miscellaneous Offences Act M17 Laws of 2007.

  • Ifeanyi Ubah’s N135b fraud case adjourned till 2020

    Ifeanyi Ubah’s N135b fraud case adjourned till 2020

    A Federal High Court in Lagos on Wednesday adjourned until Feb. 13, 2020, trial of the Chairman of Capital Oil and Gas Ltd., Senator Ifeanyi Ubah, charged with N135 billion fraud.

    The Federal Government brought the charge before Justice Nicholas Oweibo.

    Capital Oil and Gas is named as the second defendant.

    On Wednesday, Mr Kunle Adegoke appeared for prosecution, while Messrs Olisa Agbakoba and Ajibola Oluyede appeared for the first and second defendants, respectively.

    Adegoke informed the court of a pending four-count charge preferred against the defendants, and urged the court to accept same.

    Agbakoba, however, informed the court that his client had not been served with the charge.

    He also told the court that a move for mediation was ongoing to resolve the matter out of court.

    Although there were arguments and counter-arguments on the absence of the defendant in court, the judge ruled that since the defendant was not in court, the case would be adjourned.

    According to the prosecution, the defendants committed the offences from 2012 to 2018.

  • Ex-Perm Sec jailed for N14.1m SURE-P fraud

    Ex-Perm Sec jailed for N14.1m SURE-P fraud

    Clement Illoh, an ex-Federal Permanent Secretary in the Federal Ministry of Labour and Productivity was on Thursday sentenced to five years in prison over N14.1million Subsidy Reinvestment and Empowerment Programme (SURE-P) fraud.

    Justice Oluwatoyin Taiwo of an Ikeja Special Offences Court passed the sentence after convicting Illoh on count of stealing by conversion of public property.

    The judge also ordered forfeiture of the stolen N14 million SURE-P fund by the convict into the coffers of the Federal Government.

    “It is unfortunate that a senior officer found himself in this predicament. A public officer has no right to steal from public funds.

    “I therefore sentence the defendant to five years imprisonment without an option of fine.

    “He should serve his sentence at the Ikoyi Prisons,” she said.

    Mr Rotimi Oyedepo, the lead prosecuting counsel for the Economic and Financial Crimes Commission (EFCC), had urged the court to sentence Illoh to seven-years in prison.

    “Each of the two charges stipulates a sentence of three years in prison, I urge the court to sentence the defendant to seven-years in prison according to Section 280 of the Criminal Law,” Oyedepo said.

    Responding to Oyedepo’s submission, Justice Taiwo said: “The court is of the discretion as regards sentencing.

    “Therefore, the court has the discretion of reducing the sentence from seven-years to five-years.

    “The sum of N3.5million withdrawn by the defendant and the sum of N10.5million recovered by the EFCC shall be refunded into the Consolidated Revenue Fund Account of the federation.”

    NAN reports that the convict was arraigned on Oct. 16, 2017 by the EFCC on a three-count charge bordering on stealing by conversion of property to the tune of N14.1 million.

    The EFCC closed its case against the convict on May 16, 2018 with four prosecution witnesses testifying.

    Two witnesses including Illoh testified for the defence.

    According to the anti-graft agency, Illoh was responsible for supervising numerous programmes including SURE-P during which he awarded fictitious contracts to himself via his company and friends

    The convict was said to have diverted SURE-P funds sourced from NIMASA.

    The offences contravene Sections 279 (1), (b) and 285 (6) of the Criminal Law of Lagos State 2011.

  • Alleged fraud: Court insists NFF boss Pinnick, others must appear

    A Federal High Court in Abuja has insisted on the appearance of the President of the Nigeria Football Federation (NFF), Amaju Pinnick and four others to answer to a pending criminal charge against them.

    Justice Ijeoma Ojukwu gave the order yesterday at the resumed hearing in the charge brought against them by the Federal Government, through the now disbanded Special Presidential Investigation Panel (SPIP) on the recovery of public property.

    Those charged with Pinnick are NFF Secretary, Sanusi Mohammed; the 1st Vice-President, Seyi Akinwumi; the 2nd Vice-President, Shehu Dikko and an Executive member, Yusuff Fresh.

    Pinnick and others are, in the charge 17-count charge, marked FHC/ABJ/CR/93/2019, accused among others, of misappropriation of $8,400,000 belonging to the football body.

    The money was said to have been paid by the Federation Internationale de Football Association (FIFA) to the NFF as appearance fees in the group state of the Russia 2018 World Cup.

    They are also accused of “moving dishonestly and intentionally the sum of about N4bn” belonging to the NFF without the consent of the NFF.

    When the case was called on Thursday, the defendants were absent, despite the court’s order of July 1, 2019 for bench warrant compelling the defendants to appear on the next adjourned date.

    SPIP’s lawyer, Celsius Ukpong drew the court’s attention to the fact that his agency, (the SPIP) has been shut down on the directive of President Muhammadu Buhari.

    Ukpong said, because of the development and subsequent directive by the President, SPIP’s activities and functions have been transferred to the office of the Attorney-General of the Federation (AGF).

    He added that part of the SPIP’s activities transferred to the AGF was the case file containing the Pinnick and others’ charge and related processes.

    Ukpong said: “It was the panel that file the charges. But, we have been disbanded and President Buhari directed us to handover all our activities to the office of the AGF.

    ” In view of the new development, we believe that the office of the AGF will do justice to this matter.”

    A lawyer, who said he was from the AGF’s office, Abubakar Musa confirmed Ukpong’s explanation, but said he believed the case file was in transition to the office of the AGF, following the closure of the SPIP by the President.

    After listening to the lawyers, Justice Ojukwu expressed displeasure at the defendants’ absence.

    She noted that it was a slight on the court for its order to be ignored by the defendants, and threatened to excuse herself from the case.

    The judge noted that had the defendants been in court, she would have excused them in view of the absence of a competent prosecution counsel before the court.

    The judge thereafter, adjourned until November 5, 2019, but insisted that the defendants must attend court.

  • Alleged N400m fraud: Metuh insists court must invite ex-president Jonathan to give evidence

    Former National Publicity Secretary of the Peoples Democratic Party, PDP, Chief Olisa Metuh, on Tuesday insisted that the Federal High Court, Abuja, presided over by Justice O.E. Abang should invite former President Goodluck Jonathan to give evidence in his ongoing trial.

    Metuh is facing prosecution by the Economic and Financial Crimes Commission, EFCC alongside his company, Destra Investment on seven-count charges, bordering on money laundering to the tune of N400 million, which he allegedly received from the Office of the National Security Adviser, ONSA, in 2014 under Sambo Dasuki as national security adviser without justification.

    Metuh while on cross-examination today, said “The payment of N400 million was made by the former President Goodluck Ebele Jonathan. This is because I made a presentation and he informed that he will make funds available for the prosecution of that national assignment and he even called me to tell me that the N400 million has been paid. I do not expect the President to be an agent of any individual or organ of his office, but I do know that he has a lot of aides that handle matters relating to different aspects.”

    Metuh reminded the court that he applied for Jonathan to be subpoenaed to give evidence concerning his claim that he was authorized by the ex-president but that the court ignored him, restating that the court should subpoenaed Jonathan to come and give evidence in the matter.

    He revealed during cross-examination, that Mike Ozekhome, the then lawyer to Jonathan told him that he needed to pay about N1.2 billion for Jonathan’s transportation and to guarantee his security, before he could come to the court.

    “I am just hearing for the first time that the former president denied knowing me and had no business with me. I am not in a position to confirm or deny about the opposition of his excellency to be a witness; I can only confirm that he insisted that I should pay N1.2 billion,” Metuh said.

    At this juncture the prosecution tendered the certified copies of the motion document filed by Ozekhome and tendered the motion filed on October 27, 2017 by him on behalf of the former President Jonathan, seeking to set aside the subpoena as well as the affidavit in support of the said motion and written address.

    The prosecution also tendered a counter-affidavit of the senior counsel, made on October 30, 2017 but filed on the November 1, 2017.

    Justice Abang adjourned the matter to Thursday, September, 26, 2019 for conclusion of arguments and admissibility of documents and for continuation of trial. It will also on the new adjournment date, consider the need to further adjourn the matter to September, 30, October 2,3, and 4, 2019, for continuation of trial.