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December 14, 2017

Alleged N3.5 billion fraud by Nigeria Governors: Court orders interim forfeiture of N1.2 billion to FG


A federal court on Friday ordered that N1.2 billion allegedly paid a firm ‘fraudulently’ by the Nigeria Governors Forum be forfeited to the federal government.

The court gave the ruling based on an application by the anti-graft agency EFCC.

In granting the EFCC prayers, Justice Oguntoyinbo of the Federal High Court in Lagos ordered anyone interested in the money to appear before the court within 14 days to show cause why the money should not be permanently forfeited to the federal government.

It can be recalled that the EFCC has been investigating the alleged fraud by the NGF, a body of the governors of Nigeria’s 36 states.

That investigation by the EFCC is believed to be one of the reasons several governors, and senators loyal to them, are opposed to Ibrahim Magu as substantive EFCC chairman.

Investigations by the EFCC show that the N1.2 billion is part of the Paris Club refund given to states by the federal government.

President Muhammadu Buhari has repeatedly stated his displeasure with how many states refused to pay workers’ salaries despite receiving the refund and other bailout funds.

Although the NGF has denied any wrongdoing, the EFCC said the N1.2 billion was part of N3.5 billion paid to a firm, Melrose General Services Company Limited, that did no service to the NGF and which then commenced a distribution spree of the money.

The account of the firm “was in red” before it received that largesse from the NGF, the EFCC stated in a statement by its spokesperson, Wilson Uwujaren.

Read the full statement below.

Justice O. Oguntoyinbo of the Federal High Court sitting in Ikoyi, Lagos, on Friday ordered an interim forfeiture of N1.2 billion (N1, 222, 384, 857.84) recovered by the Economic and Financial Crimes Commission, EFCC, from the account of Melrose General Services Company Limited. 

Justice Oguntoyinbo also ordered the temporary forfeiture of the sum of N220 million recovered from two other companies, namely Wasp Networks Limited and Thebe Wellness Services. 

The order came following a motion ex – parte filed by E. E. Iheanacho, a prosecutor with the EFCC, pursuant to Section 44 (2) of the Constitution of the Federal Republic of Nigeria, 1999 as amended and Section 17 of the Advance Fee Fraud and Other Fraud Related Offences Act No. 14, 2006. 

In granting the EFCC prayers, Justice Oguntoyinbo ordered anyone interested in the money to appear before the court within 14 days to show cause why the money should not be permanently forfeited to the federal government. 

The judge also directed the commission to publish in any national newspaper for anyone who is interested in the money to appear before the court to show cause why the order for the final forfeiture should not be granted. 

On May 26, 2016, the 36 states’ governors, through the Nigeria Governor Forum, NGF, had engaged the services of a consortium of consultants made up of GSCL Consulting and Bizplus Consulting Services Limited (“Messrs GSCL Biz Plus Consortium”) for the purpose of verification, reconciliation and recovery of over – deductions on Paris and London Club Loans on the accounts of states and local governments between 1995 and 2002. 

The company had carried out the said assignment and declared a total sum of $6.4 billion (US$ 6, 483, 282, 424. 61) as due for refund to the states. 

Following this, the federal government had approved an initial payment of the sum of $1, 730, 930.53 for the benefit of the various states. 

The Minister of Finance, Kemi Adeosun, had through the Central Bank of Nigeria, CBN, paid the sums of $86 million ($86,546, 526.65) and N19 billion (N19, 439, 225, 871.11) representing 5 per cent of the approved initial Paris and London Club refunds.

On December 14, 2016, the NGF had paid the sum of N4.4 billion (N4, 389, 207,099.05) to the Consortium of GSCL BizPlus as part of the agreed consultancy fee.

Melrose General Services Limited, who was the first respondent, was never engaged by the NGF to carry out any consultancy services in relation to the said Paris and London Club refund.

However, in order to obtain public funds, the first respondent had allegedly re-copied and misrepresented the work of GSCL BizPlus Consortium to the Nigeria Governors Forum (NGF) for payment.

As a result, the first respondent was allegedly paid the sum of N3.5 billion by the NGF on December 14, 2016, even when it did not execute any consultancy job for the Forum.

The first respondent’s Access Bank Plc account No. 0005892453 was said to be in red at the time the sum of N3.5 billion was paid into it.

Between December 15, 2016 and January 20, 2017, the first respondent allegedly moved out about N2.3 billion (N2, 277,615,142) in a bid to launder the money, leaving a balance of N1, 222, 384, 857.84 before the intervention of the EFCC.

Investigation revealed that hundreds of millions of Naira from the Paris and London Club refund were withdrawn in cash, while the company wired some amounts of money outside the shores of the country and paid some amounts to third parties in Nigeria.

The Commission, however, recovered the sum of N200 million, which Melrose General Services Limited transferred to Wasp Networks Limited, the second respondent, on January 11, 2017 purportedly for investment in the company.

The EFCC also recovered another sum of N20, 000,000.00 transferred to Thebe Wellness Services, the third respondent, on December 19, 2017 also purportedly for investment.

However, both Wasp Network and Thebe were said to have voluntarily returned the money transferred to them by the first respondent.

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