PANDORA PAPERS: HOW BAGUDU AMASSED BILIONS AND LAUNDERED IT

Eleven years ago, Abubakar Bagudu, the current governor of Kebbi State, but then a senator, dispatched a delegation to Singapore in search of a new haven to shelter his controversial wealth, which is a target of ongoing forfeiture proceedings by the United States Department of Justice.

Investigators say the huge funds, warehoused offshore, is part of billions of dollars Mr Bagudu helped the Sani Abacha family to steal from Nigeria in the 1990s.

Referred by Farrer and Co., a prestigious centuries-old London law firm that has represented the British royal family, Mr Bagudu’s choice of secrecy provider in Singapore was Asiaciti Trust, an entity notorious for helping clients hide behind opaque offshore trusts to launder dirty money across borders.

The Monetary Authority of Singapore, MAS, imposed a fine of one million and a hundred thousand dollars on Asiaciti in July 2020 for “serious breaches” of Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) regulations between 2007 and 2018.

When on February 23, 2010, Mr Bagudu’s delegation – comprising his brother, Ibrahim Bagudu, and London lawyer, Ben Davies, from Byrne and Partners, now a part of PCB Byrne – met with Asiaciti’s officials, they registered his preference for a new structure of secrecy to oil the flow of his dirty wealth for the benefits of himself and his family.

In 1997, some 13 years earlier, Mr Bagudu had structured offshore holdings Ridley Trust and Ridley Group in notorious tax and secrecy havens, Guernsey and the British Virgin Islands, positioning himself as the unseen but ultimate beneficiary. But in 2010, he wanted to terminate the Ridley structure and transfer his assets into another structure, hence the need for Asiaciti’s service in Singapore.

The reason, according to a 2010 Asiaciti memo, was control. As noted in the memo, Ibrahim told the February 2010 meeting that his brother, Mr Bagudu – “the client” – had become “disillusioned” with institutional and independent trustees (of the Ridley Trust) as they (he and his brother) had no control over their action or inaction and suggested they feared they could lose the hidden assets.

He then insisted that any new trustee arrangements to be erected in Singapore “must ensure that the family cannot lose ‘control’ of the assets.”

In the months that followed, 99 million euros in cash and securities was then transferred from Ridley to a new structure enabled by Asiaciti, which brushed aside red flags about Mr Bagudu’s controversial background and source of his wealth. Asiaciti acted with advice from Farrer and Co. and Byrne and Partners, now a part of PCB Byrne, documents showed.

Mr Bagudu is long known to have played an instrumental role in the Abacha conspiracy to steal and launder billions of dollars belonging to Nigeria. But how he set up complicated structures of secrecy to hide stolen money as well as the role of his enablers, including prestigious British law firms and Serious Organised Crimes Agency (SOCA) the predecessor of the National Crimes Agency (NCA), has never been crystal clear.

Pandora Papers investigation – led by the International Consortium of Investigative Journalists, including more than 600 journalists, including some from PREMIUM TIMES, and about 150 news organisations around the world – uncovered financial secrets, including those of politicians, former and serving public officials, including known and suspected kleptocrats such as Mr Bagudu. Involving 11.9 million leaked records, which journalists sifted through for two years, the Pandora Papers project is the biggest collaborative transnational investigation in the history of journalism.

The leaked records came from 14 offshore services firms from around the world who help clients set up shell companies and design opaque structures to conceal their financial dealings.

The Bagudu Blue structure
As documents showed, Asiaciti helped Mr Bagudu to set up a multi-layered structure with footprints in at least three countries, namely Singapore, Cook Islands, and the United Kingdom. At the head of the structure is Blue Holdings Trust, registered in Cooks Island as a “purpose trust” to “wholly” own a Singapore-incorporated private trust company, Blue PTC Pte Ltd., with Mr Bagudu’s brother, Ibrahim, and an Asiaciti nominee as directors.

The Blue PTC Pte Ltd is in turn the trustee of two family trusts – Blue Family Trust (1) and Blue Family Trust (2). Under each trust, then, is a Singapore family-owned investment holding company, FHIC, Blue Holdings (1) Pte Limited, and Blue Holdings (2) Pte Limited, respectively.

Each of the FHIC has an investment account with Waverton Investment Management, formerly JO Hambro Investment Management, and James Hambro and Partners, both London-based firms. Assets kept with the two firms are now frozen, according to U.S. court documents. America has been at the forefront of helping Nigeria recover the Abacha loot, saying that hundreds of millions of dollars stolen were laundered through banks under its jurisdiction.

The beneficiaries of each of the family trusts and the corresponding investments domiciled in London were Mr Bagudu, his wife, seven children, and his brother, Ibrahim.

In September 2010, according to minutes of some meetings we reviewed, a sum of 99 million euros was moved from Ridley through the Blue PTC in Singapore to the investment accounts in London and distributed as follows:

Blue Holdings (1) (17,007,016 euros): Waverton – seven million euros; James Hambro – 10,007,016 euros.

Blue Holdings (2) (81,841,163 euros): Waverton – 23 million euros; James Hambro – 58,841,163 euros.

Source Of Funds: Bagudu and the Abacha plunder machine
The systematic plunder of Nigeria by the Abacha family as well as the worldwide hunt for the stolen funds, worth billions of dollars, is reckoned to be one of the worst cases of kleptocracy and offshore shenanigans in the world.

Between 1998, when Mr Abacha suddenly died, and 2020, 3.6 billion U.S. dollars have been recovered from the Abacha family and their most prolific bagman, Mr Bagudu, now a governor in Nigeria’s impoverished Kebbi State.

The 163 million U.S. dollars recovery from Jersey in 2003 directly involved Mr Bagudu, who then negotiated a deal with the U.S. and Jersey to return the funds to Nigeria in exchange for Jersey’s withdrawal of an extradition request and his free return to Nigeria. He spent six months in American federal prison in Houston while awaiting extradition to Jersey. The deal to return the $163 million was to avoid that extradition.

Also, the latest recovery – 308 million U.S. dollars from Jersey in 2020 – was laundered by Mr Bagudu.

Mr Bagudu was involved with all the offshore front companies and bank accounts – from the British Virgin Islands to Ireland, Switzerland, England, Guernsey, and Jersey – used to steal and launder billions of dollars belonging to Nigeria under the Abacha regime as a director, signatory on accounts or prime beneficiary, according to U.S. court documents and incorporation filings from the Pandora Papers leaks.

In stealing the funds, Mr Abacha set up what Africa Confidential described as a “Plunder Machine,” involving his family, officials, and associates such as Mr Bagudu, complemented by established western and local banks and offshore enablers.

In pushing for the forfeiture of stolen funds laundered through the U.S., American investigators said the criminal network used fraudulent schemes to make dirty money, according to court documents.

One was “security vote fraud,” whereby Mr Abacha and his National Security Adviser Ismaila Gwarzo and others were said to have stolen more than two billion U.S. dollars by “fraudulently and falsely representing that the funds were to be used for national security purposes.” Between 1994 and 1998, they were said to have made over 60 false claims of “security emergencies” to withdraw huge funds from the Central Bank of Nigeria, then headed by Paul Ogumah.

“Rather than use the funds for national security purposes, the stolen money was transported out of Nigeria and deposited into accounts controlled by General Abacha’s associates, including Mohammed Abacha and Mr Bagudu,” the court in Washington, D.C. was told.

Other schemes were bribery and a dramatic conspiracy by Mr Abacha’s son, Mohammed, and Mr Bagudu to lend money stolen from Nigeria back to Nigeria “with zero risks and at an enormous profit” by using proceeds of the security vote fraud to purchase hundreds of millions of dollars of U.S. dollar-denominated Nigerian bonds, called Nigerian Par Bonds, NPBs.

As part of the Brady Bond programme of the 1980s, the NPBs were U.S. dollar-denominated securities whose interest payments were guaranteed by the U.S. Treasury. The Brady Bond programme was created to help developing countries – like Nigeria – holding substantial debt to restructure their debt into bonds. Nigeria first offered the NPBs in 1992.

In another scheme, the conspirators were also said to have defrauded Nigeria of more than 282 million U.S. dollars by causing the government to repurchase Nigeria’s own debt from one of their companies for more than double what Nigeria would have paid to repurchase the debt in the open market.

According to American investigators, the initial funding of Mr Bagudu’s Ridley’s account at Credit Agricole Indosuez, London, to the tune of 90 million U.S. dollars in 1998 was from the Par bonds and the debt-buy-back fraud.

The Ridley assets were later transferred to the Blue structure facilitated by Asiaciti and are the outstanding defendant assets being targeted for forfeiture by the United States, court documents showed.

The U.S. filed its forfeiture litigation in 2014. It said, then, the assets held by the Blue holdings, traceable to the old Ridley structure, and domiciled in London investment portfolios held with Waverton and James Hambro, were last valued at a total of 96 million euros.

Barely a week after Mr Bagudu’s delegation’s initial visit to Singapore in February 2010, Asiaciti determined that he “has a somewhat controversial background,” making references to his association with the Abacha family and his involvement in “extensive litigation between 2000 and 2006, both criminal investigations and civil claims,” Asiaciti’s internal memo showed.

Despite this determination, as well as the awareness that Mr Bagudu’s had since 2003 admitted to financial irregularities as he agreed to return about 163 million US dollars to Nigeria to avoid extradition to Jersey from the U.S., Asiaciti accepted Mr Bagudu as a client in 2010.

The Monetary Authority of Singapore, MAS, slammed Asiaciti with a fine of one million and a hundred thousand dollars in 2020 for the company’s anti-money laundering and anti-terrorism financing failures between 2007 and 2018, covering the period the company helped Mr Bagudu set up the Blue structure to shelter assets said to have been made from the plunder of Nigeria.

“We maintain a strong compliance programme and each of our offices have passed third-party audits for Anti-Money Laundering & Counter-Financing of Terrorism practices in recent years,” Asiaciti said in a written reply to ICIJ over the Pandora Papers. “However, no compliance programme is infallible – and when an issue is identified, we take necessary steps with regard to the client engagement and make the appropriate notifications to regulatory agencies.”

Mr Bagudu’s brother, Ibrahim, continues to claim the assets, seeking to prevent their forfeiture to Nigeria, court documents showed.

In a reply to written questions by The Guardian of UK in conjunction with PREMIUM TIMES and ABC of Australia, Nicola Boulton of PCB Byrne, Mr Bagudu’s lawyers said “all monies held by the Blue Trusts are lawfully held,” citing a 2003 settlement between Mr Bagudu and the Nigerian government under then-President Olusegun Obasanjo.

Mr Bagudu is yet to respond to further inquiries PREMIUM TIMES sent to him three weeks ago as part of the reporting for this story.

In defending its role, when questioned by authorities following the unsealing of the indictment against Mr Bagudu by the U.S. in 2014, Asiaciti said, “Farrer & Co, a prestigious London law firm, who acts for the Royal Family had accepted the explanations provided and was prepared to act for him, having strict UK CDD requirements.” This was contained in a defence Asiaciti wrote to the regulator.

Indeed, as documents showed, between Byrne and Farrer and Co., Asiaciti was advised that Mr Bagudu would not be a problematic client and that the funds he sought to shelter were not derived from criminal sources. That turned out to be false.

In an April 2010 memo to press for the acceptance of Mr Bagudu as a client, Bernard O’Sullivan of Byrne said there were no outstanding claims to Mr Bagudu’s assets and that, in 2003, Nigeria, then led by President Olusegun Obasanjo, reached a “global settlement” with Mr Bagudu.

The settlement Mr O’Sullivan referred to was that which was executed when Mr Bagudu agreed to return about 163 million U.S. dollars to Nigeria in 2003. Mr O’Sullivan attached a copy of an August 8, 2003, confidential statement by Mr Obasanjo to withdraw all claims from criminal and civil proceedings against Mr Bagudu.

This defence was restated in Byrne’s reply following Pandora Papers reporting. “Mr Bagudu reached a compromise with the FRN (Nigeria) in 2003 by which all claims against him and his family were ended and the FRN received cash and certain rights,” Byrne’s Mr Boulton said.

Mr Obasanjo, who entered the settlement agreement with Mr Bagudu, could not be reached to comment for this story as he was said to be travelling in Ethiopia. But sources close to him said it was a “pragmatic step” by the administration that was then desperate to recover stolen funds and that believed Mr Bagudu could help disclose where the funds were stashed. In return, Mr Obasanjo then signed the settlement ending all claims, globally, against Mr Bagudu.

Keeping the Bagudu Dirty Money Flowing – The Enablers

Mr Boulton said Mr Bagudu helped Nigeria recover at least one billion dollars following Mr Abacha’s death.

As documents suggest, between the time the Blue structure was created in 2010 and when its assets were frozen in 2014, 4.6 million dollars or $6.8 million euros was disbursed for Mr Bagudu’s children’s education and the “generous” lifestyle his family “was accustomed to”.

The transferred sum included one hundred thousand dollars annuity to his brother Ibrahim and another three million U.S. dollars moved into Ibrahim’s bank account for “investment in real estate and property development in Abuja.”

In one case in 2013, Farrer and Co helped Bagudu ensure funds were distributed to his family and resisted Asiaciti’s “level of scrutiny”, an attempt at enhanced due diligence.

In an email, Diana Davidson of Farrer and Co. wrote that Mr Bagudu’s brother Ibrahim was “not entirely happy at the level of scrutiny being sought at the sole discretion of Asiaciti”.

In response, an Asiaciti’s client services official said they were “in no way inferring that the distribution requests are suspicious in any way,” and reminded Ms Davidson that Mr Bagudu was a politically exposed person, PEP, thus the transfers he sought required enhanced due diligence.

A breakdown of disbursements showed that 100 thousand U.S. dollars were advised to be paid out for Mr Bagudu’s “son’s school fees” days after Farrer and Co’s Ms Davidson helped him pressure Asiaciti.

But beyond the role played by British firms in the Bagudu shenanigans, the British public service institution was also involved, documents suggested.

In a witness statement in 2015, Asiaciti said Farrer and Co and Byrne & Partners received consent from the UK’s Serious Organised Crime Agency, SOCA, now the National Crimes Agency (NCA), to facilitate the restructuring of Mr Bagudu’s offshore holdings in 2010.

“A protective disclosure was made to SOCA in the UK and their consent was obtained to the resettlement of the Ridley Trust into the Blue Family Trusts before funds were transferred from Ridley Group Limited to Blue Holdings 1 Pte. Ltd and Blue Holdings 2 Pte. Ltd,” Asiaciti’s Karen Hanlong submitted.

Years later, NCA started working with the U.S. to hunt the assets held by Mr Bagudu from the Abacha plunder of Nigeria.

https://www.premiumtimesng.com/pandora-papers/488140-pandora-papers-how-governor-bagudu-amassed-dirty-billions-and-how-he-is-hiding-it.html

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