The Justice Department said Wednesday it has frozen $458 million in corruption-derived assets from accounts belonging to Nigerian dictator Gen. Sani Abacha and sought forfeiture of more than $550 million stashed across the globe.
The complaint in U.S. District Court in the District of Columbia was based on an FBI investigation and also names the general’s son Mohammed Sani Abacha and associate Abubaker Atiku Bagudu. The three are accused of embezzling public funds amounting to billions of dollars from the oil-rich country, in three different criminal schemes.
Justice officials described Wednesday’s move as the “largest kleptocracy forfeiture action brought in the department’s history.” The action was part of a broader initiative to discourage corruption proceeds from being laundered in the United States. Why the complaint comes now wasn’t immediately clear.
U.S. bank operations listed in the complaint, all in New York but not the subject of the complaint, include: ANZ Banking Group; Bankers Trust Company; Barclays Bank; Citibank ; Chase Manhattan Bank; Chemical Bank; AG; Marine Midland Bank; HSBC USA; and Morgan Guaranty Trust Company, which later became JP Morgan Chase.
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Abacha is a controversial figure in Nigeria, where he led a military regime that ruled from his coup 1993 until his death in office in 1998. He presided during a time of low oil prices, so the country’s economic growth came from a wider opening to private investment and market forces. He also used Nigeria’s military to help quell unrest in Sierra Leone and Liberia.
But the dark side of the Abacha regime was revealed in the complaint for forfeiture of funds
Under one scheme, Gen. Abacha allegedly got Nigeria’s central bank to disperse what are called security votes, essentially funds to be used for purposes of national security. Instead, those funds were moved overseas to accounts in Switzerland, Great Britain and through banks in the United States.
Another alleged scheme involved the general and his finance minister, Anthony Ani, buying back distressed Nigerian government debt at inflated prices from a company controlled by Bagudu and Mohammed Abacha. The windfall was more than $282 million, the Justice Department said.
The third alleged criminal effort involved extortion of more than $11 million from a French company with a Nigerian affiliate involved in government contracting.
Proceeds from the alleged national security funds fraud were pooled into bank accounts in London, then used to purchase dollar-denominated Nigerian bonds, generating hundreds of millions of dollars in interest payments.
U.S. banking behemoth Citibank administered the interest rate payments, which amounted to lending stolen money to generate huge profits.
Most of the money sought by the Justice Department belongs to entities registered in the British Virgin Islands, Great Britain, France and the Bailiwick of Jersey. About $287 million is being held by Deutsche Bank International Ltd. in Jersey; another $12 million is accounts administered by HSBC Fund Administration in Jersey; and another $144 million is located at Banque SBA in Paris.
Some of the fictitious companies the group established outside Nigeria had accounts with Goldman Sachs in Zurich, Switzerland.