Estimates of amount misappropriated range between USD 2 and 5 billion. The alleged methods of misappropriation include schemes such as theft from the public treasury through the central bank on false pretense and transfer of cash overseas, inflation of the value of public contracts, extorting in connection with payments on government contracts and fraudulent transactions. Proceeds were deposited to accounts under the private control of associates in the United Kingdom (UK), Switzerland, Luxembourg, Principality of Liechtenstein, Bailiwick of Jersey and the Bahamas or, in some instances, in Nigeria.
Asset recovery process
To date, over USD 2 billion has been recovered and repatriated to the Federal Republic of Nigeria of which USD 1.2 billion through mutual legal assistance from Switzerland, Luxembourg, Jersey, Liechtenstein, Belgium and the UK. Approximately USD 750 million was transferred to the government of Nigeria voluntarily by the Abacha family2. Also, assets in the value of more than USD 800 million were returned to the Federal Republic of Nigeria following the domestic investigation of the Special Investigation Panel into the crimes committed in Nigeria3. Most recently, in 2014 a multi-jurisdiction settlement between the Federal Republic of Nigeria and the Abacha family was concluded, with a goal to repatriate the outstanding property from several jurisdictions in Europe and end all pending claims against the Abacha family.
To recover assets the government of the Federal Republic of Nigeria employed several methods: Mutual Legal Assistance (MLA), criminal complaints for money laundering in recipient jurisdictions, Civil Claimant (Partie Civile) within criminal proceedings and civil actions.
In 1999 Switzerland received a request for legal assistance from the Federal Republic of Nigeria in relation to General Sani Abacha and 14 additional persons (relatives and associates) and requested the freezing of their bank accounts. Shortly after criminal proceedings were initiated in Geneva on charges of money laundering, and additional assets were discovered and frozen (USD 700 million). Recognizing that the repatriation of funds from Europe would be a lengthy undertaking the Nigerian government attempted to settle with some of the defendants in 2002 offering to dismiss the criminal proceedings against them and removing their names from the requests for legal assistance submitted to foreign jurisdictions. In return, over USD 1 billion frozen in Switzerland, Principality of Liechtenstein and Luxembourg would be transferred to the Bank for International Settlements in favour of Nigeria.5
However, Muhammed Sani Abacha refused to sign the proposed agreement and the process continued. The Swiss Federal Tribunal (SFT), in its landmark ruling of 7 February, 2005 qualified the Abacha clan as a “criminal organization”6. This allowed the Swiss authorities to shift the burden of proof, as per Swiss Penal Code (art. 72 SPC), compelling the members of such organization to prove the lack of connection between the assets subject to confiscation and the criminal organization. The SFT held that shifting the burden of proof should also be applied in an MLA context with a foreign country. This permitted the Swiss authorities to perform an “early restitution” allowed under Swiss domestic law for International Mutual Legal Assistance (IMAC, art. 74a) and return about USD 458 million, found to be proceeds of crime, without requiring Nigeria to issue a confiscation order. Moreover, the Federal Republic of Nigeria was granted a status of Civil Claimant (partie civile) within the Swiss criminal proceedings. Consequently, all frozen assets beneficially owned by a member of the criminal organization were to be returned to Nigeria unless the account holders demonstrated that they were not of criminal origin. Following to this ruling and until 2007 Switzerland transmitted a total of around USD 508 million of Abacha related assets to Nigeria7.
Based on the information discovered in the course of the Geneva criminal proceedings, Nigeria sent MLA requests to the Bailiwick of Jersey, Principality of Liechtenstein, Luxembourg and the UK resulting in the freezing of approximately USD 1.3 billion, which will be discussed in turn below.
In July 2014, a multi-jurisdiction settlement (Repatriation agreement) was negotiated between the Federal Republic of Nigeria and the Abacha family. It ended all pending claims against Sani Muhammad Abacha, Abba Sani Abacha and their affiliates and outlined the repatriation to the Federal Republic of Nigeria of the pending assets related to the Abacha family in England, Bailiwick of Jersey, France, Luxembourg and the Principality of Liechtenstein. 8
Pursuant to this settlement the Nigerian government dismissed the criminal case against Abba Abacha, which had been confirmed by the prosecutor in Canton of Geneva in September 2014 9 and the criminal proceedings against him were accordingly closed in February 201510, after he had been found guilty of corruption and sentenced to a suspended sentence and had his assets confiscated by a magistrate in Geneva in 2009. In addition, the assets related to him that had been confiscated in 2006 in Luxembourg, following a request from the Swiss authorities, were also transferred to the Bank for International Settlements in favor of the Central Bank of Nigeria. The Independent Confiscation Order of December 2014 instructed the assets originating from Luxembourg, namely about USD 371 million and EUR 350,000, subject to the deduction of procedural and counsel fees, as well as the shares of certain specified companies to be transferred to Nigeria. To date, all the assets transferred to the Bank for International Settlements remain there.
United States of America
An in rem civil forfeiture complaint was filed in November 2013 against more than USD 625 million (action to forfeit five corporate vehicles and more than USD 500 million in other assets).11 There were claims to additional approximately USD 148 million in four investment portfolios in the UK. In August 2014, US District Court ordered forfeiture of USD 480 million of corruption proceeds from banks in France, Ireland, UK and the Channel Islands.12 The principal mechanism for corruption was the “Security Votes Fraud” involving the theft of more than USD 2 billion from the Central Bank of Nigeria under the cover of instructions approved by General Abacha that were issued on false premise that money was required for emergency security purposes. The money obtained was laundered through the purchase of Nigerian Par Bonds (NPBs). Another method was the Dumez extortion through which General Abacha extorted approximately USD 97 million from the French civil engineering concern in return for contracts in the value of approximately USD 390 million.
The forfeiture judgment includes approximately USD 303 million in two bank accounts in the Bailiwick of Jersey, USD 144 million in two bank accounts in France, and three bank accounts in the United Kingdom and Ireland with an expected value of at least USD 27 million. The ultimate disposition of the funds will depend on the execution of the judgment in each of these jurisdictions – this is the subject of the 2014 proceedings before the UK courts discussed in the following section. Claims to an additional approximately USD 148 million in four investment portfolios in the United Kingdom are pending.13 While the US Department of Justice (DoJ) stated that the money forfeited can be used for the benefit of the Nigerian people there is no publically available information whether and how the money is intended to be repatriated, but it appears that at least a portion of the assets in question here would have been the subject of the 2014 Settlement.
|Date of Birth and Death:||Nigeria, 20 September 1943 – 8 June 1998|
|Official position:||Head of State from 17 November 1993 until 8 June 1998|
|Accomplices:||sons (late) Ibrahim Sani Abacha, Abba Abacha and Mohammed Sani Abacha (signatory and/or corporate representative on many of assets) and associates such as Abubakar Atiku Bagudu, etc.|
|Misappropriation Offences as per UNCAC1:||Article 17 Embezzlement, misappropriation or other diversion of property by public official and Article 23 Laundering of proceeds of crime|
It has been alleged that at least USD 1.3 billion controlled by the Abacha family were processed through British financial institutions.14 Following Nigeria’s request for mutual legal assistance in 2000 the UK authorities froze the Abacha assets and were finally able to disclose the evidence gathered to Nigeria in 2004 when legal challenges to the authorities’ decisions to provide assistance to Nigeria were dismissed in the UK courts.15 Civil proceedings initiated by Nigeria in May 2001 in the UK proved more rewarding. Nigeria requested disclosure from more than 100 defendants (banks), known to have maintained accounts of the Abacha family and associates, resulting in the world wide freezing order against the Abacha assets. The disclosure orders against the first 20 respondents enabled Nigeria to collect account information in additional banks ultimately leading to companies incorporated in jurisdictions such as British Virgin Islands, Ireland, Isle of Man and the Principality of Liechtenstein. However, only about GBP 50 million remained on these accounts – which was frozen but over the years the court allowed withdrawals to pay for the Abachas’ legal fees.16
Since 25 February 2014, USD 200 million were frozen by the High Court pursuant to the legal proceedings in the United States described above. On 8 April 2014 the High Court rejected attempts to overturn it.17 It continued a freezing injunction on the application of the United States based on section 25 of the Civil Jurisdiction and Judgments Act 1982 until a judgment by a US court could lawfully be enforced by the relevant UK enforcement authorities under the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005, reasoning that it is expedient for the court to render assistance in aid of the US Claim.
On July 2 2014 the High Court issued a Prohibition Order, following an application of the National Crime Agency (NCA) to take effect upon the discharge of the freezing injunction. It prevents a disposal, diminishing of the value or taking out of jurisdiction of any property or assets named in the order.
In October 2014 there was an appeal of the 8 April 2014 Judgment on the question of law by two companies, incorporated under the laws of Singapore (appellants), whose shares are owned by the trustees of discretionary trusts for the benefit of General Abacha’s associate (Abubakar Atiku Bagudu, one of the defendants in the US proceedings). The appellants themselves were not defendants to the US proceedings but assets held in some of their investment portfolios are subject to in rem claims made in US proceedings in the value of at least EUR 100 million.18
The appeal raised the question whether it was permissible to grant the interim freezing injunction in support of foreign proceedings of a state which seeks to forfeit assets that are in England and Wales and owned by persons who are, however, not subject to in personam jurisdiction of England and Wales. The appeal was allowed and the freezing injunction discharged. The appellate court found that the statutory scheme under POCA and the 2005 Order provide a comprehensive regime for the application by UK enforcement authorities (which is the only authority with a discretion to apply for a prohibition or recovery order) to secure the recovery of assets located in the UK necessary to implement foreign forfeiture, confiscation and other orders made in foreign proceedings to recover proceeds of crimes. The court further held that reliance on section 25 of the Civil Jurisdiction and Judgments Act 1982 was an attempt to circumvent the detailed statutory scheme under the POCA and the 2005 Order.
Bailiwick of Jersey
In June 2011 the Royal Court confiscated over GBP 26.5 million after the conviction and sentencing of Raj Arjandas Bhojwani. He was convicted on two counts of converting the proceeds of criminal conduct and one count of removing the proceeds of criminal conduct relating to the sale of overpriced vehicles to the Nigerian government under two separate contracts and depositing the proceeds in Jersey bank accounts. Mr. Bhojwani was sentenced to 6 years imprisonment.19 This sum is in addition to the already repatriated GBP 140 million in 2003 that had been deposited in nine financial institutions in Jersey by friends and associates of Abacha, as part of previous asset sharing agreements.20
Principality of Liechtenstein
In June 2014 the government approved repatriation to the Federal Republic of Nigeria of the last tranche of the assets associated with the Abacha family in the amount of EUR 167 million, which had been forfeited in a final judgment. The disbursement of these assets is to be monitored by the World Bank. The repatriation was initially delayed after four of the companies affected by the Abacha case filed a complaint at the European Court of Human Rights (ECtHR) in Strasbourg in August 2012, which was subsequently withdrawn in May 2014, allowing the repatriation to proceed.21
At the end of 2013 Liechtenstein repatriated to Nigeria EUR 7.5 million, recovered from several companies which were prosecuted for receiving money from the Abachas, which was proved to have originated from the national budget of Nigeria.
Following the request for mutual legal assistance sent by the Nigerian authorities to Luxembourg in 2000, assets totalling USD 630 million were frozen.22 As mentioned above, under the multi-jurisdiction settlement the assets confiscated in 2009 in Luxembourg, in the amount of USD 371 million and EUR 350,000, and the shares of certain specified companies should be transferred to Nigeria.
1. Domestic qualifications may differ↩
2. James Maton and Tim Daniel, The Kleptocrat’s Portfolio Decisions in Peter Reuter, Draining Development, Controlling Flows of Illicit Funds from Developing Countries, International Bank for Reconstruction and Development (2012), 415↩
3. Recovering Stolen Assets, Mark Pieth (ed.) (2008), The Abacha Case, pg. 44↩
4. For background reading and overview of the Abacha proceedings in multiple jurisdictions please consult Mark Pieth (ed.) Recovering Stolen Assets (2008).↩
6. SFT 131 II 169 pg. 182, citing Article 70 of Swiss Criminal Code↩
7. Enrico Monfrini, the Abacha Case in Mark Pieth (ed.) Recovering Stolen Assets, Peter Lang (2008), 59↩
9. P/12983/100-JOO/tuk, Paragraphs 16 – 19 ↩
10. P/12983/1999 – JOO/ cgs↩
11. Verified Complaint for Forfeiture in rem, 15 November, 2013↩
12. Civil Action No. 13- 1832 (JDB) August 6, 2014↩
14. Financial Times, UK Freeze stays on assets allegedly linked to Nigeria dictator, 8 April, 2014↩
15. James Maton and Tim Daniel, Recovering the Proceeds of Corruption: General Sani Abacha – a Nation’s Thief, in Recovering Stolen Assets, Mark Pieth (ed.), Peter Lang (2008), 74.↩
16. James Maton and Tim Daniel, The Kleptocrat’s Portfolio Decisions in Peter Reuter (ed.), Draining Development? Controlling Flows of Illicit Funds from Developing Countries, The World Bank 2012., 415 et seq.↩
17. 2014 EWHC 993 (Comm) April 8, 2014↩
18. 2014 EWCA Civ 129, (9 October, 2014), Para 10↩
22. supra note 7 Monfrini, 53.↩