How Citi Bank, Union Bank Defrauded Nigerian Entrepreneur of N390 Million

Charles Samson Sankey

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A Nigerian court sitting in Lagos may be forced to issue a bench warrant for the arrest of C.S. Sankey, managing director of Citibank and Emeka Emuwa, managing director of Union Bank and others for allegedly defrauding Micheal Emerah, a Nigerian entrepreneur, of N390 million should they fail to appear before the court again on April 14

By Maureen Chigbo  |  Apr 11, 2016 @ 01:00 GMT  |

CITIBANK, an American Bank now called Nigerian International Bank Limited, dubs the appellation as a global investment and corporate bank. It claims to create the best outcomes for its clients and customers in rendering financial services and make good returns to its shareholders. But not much is known about its alleged shady deals through which the bank rakes in billions of dollars in profit to pay dividends. It is also not public knowledge how the bank which is highly connected to top government functionaries in both the United States and Nigeria, uses such powers to frustrate those whom it has run out of business all in the name of financing  investments for entrepreneurs who are subsequently ripped off because of the Citi’s unholy business activities.

One of such cases currently involving Citibank has been going on in the Nigerian courts. It has to do with Micheal Emerah, a Nigerian entrepreneur and chairman of the Micmerah International Agency Ltd, which the bank allegedly defrauded of N390 million. Citibank has, as usual, deployed its high wired contacts in an attempt to kill the case. But its stumbling block appears to be President Muhammadu Buhari’s avowed fight against corruption now in Nigeria.

Before now, Citibank has succeeded twice to truncate the case through the office of the two former attorneys general of the federation during ex-President Goodluck Jonathan’s administration. But for the doggedness of the wounded entrepreneur who is clinging on every hope to keep the case alive and to get justice which has eluded him and his company for 12 years.

In his petition dated June 18, 2015, Emerah asked President Buhari to help him before it is too late to save jobs of more than 1,000 employees of Micmerah Group. The letter is entitled: “Petition Against the Fraudulent Withdrawal of Criminal Charge No FHC/ABJ/CR/122/2008 between: Federal Republic of Nigeria Vs Nigeria International Bank Ltd (Citi Bank) and Sixteen Others. He latched on the hope given to him by the office of the chief justice of Nigeria in reply to his petition about the withdrawal of the case that he could institute the case again if there is a change in government.

Emeka Emuwa
Emuwa

That is why Emerah’s petition to President Buhari is premised on the withdrawal of fiat granted to Chris Uche, SAN, and notice of discontinuance dated May 20, 2011, entered by Mohammed Adoke, a former attorney general of the federation of Nigeria. In the petition, Emerah contended that the attorney general having taken a position in the case and advised the former President Jonathan on the desirability of the matter to be tried and determined by the court in order to avoid petition and counter petition, ought not to have entered notice of discontinuance.

Prior to this, Emerah had previously petitioned former President Goodluck Jonathan on the matter in a letter dated February 15, 2012. In the petition, Emerah narrated how in the course of his transport business, Nigeria International Bank (Citibank) lured his company to import four luxury buses and two containers of spare-parts to augment its fleet and for which the company was made to contribute an initial sum of N250,000,000 only. It later also paid N107,349,964 to cover and defray the entire cost of the purported import facility but which unknown to the Micmerah the bank had perfected a plan that was virtually executed to defraud his company including the import duty payable to the government.

“Upon arrival of the goods, the bank recommended Messrs Mikky Dons Nig Ltd as the clearing agent and directed that we pay to it the sum of N56,000,000 only for the clearing. However, curiously too, the clearing agent procured Union Bank Duty receipt which was duly confirmed by Citibank, but was later found to be forged, leading to the seizure of the goods by the Nigerian Customs,” the letter said.

The letter pointed out the dubiety of Citibank’s nominated clearing agent in patronising another banks (Union Bank Plc) to consummate the same transaction as an evidence of a predetermined agenda it had while conniving with bank officials. This could have passed but for the vigilance of the Nigerian Customs which insisted that the full duty of N46,000,000 should be paid. Thereafter, Citibank asked Emerah to source for 20 percent of the amount (N11 Million) while it would pay the balance. Emerah complied.

As the case was on, unfortunately, tragedy struck Emerah when his wife died while giving birth in a hospital in London.  While in mourning, “The bank then capitalised on his absence, following the death of the wife of the managing director of Micmerah in London to secure the release of the Luxury buses and containers of spare-parts using all together forged documents to wit: Court Affidavit, police extract and revenue receipts. …They equally proceeded to sell all the buses and appropriated the entire proceeds to themselves without reference to our company, or at all and still claim that we are indebted to the bank,” the petition stated.

Machael Emerah
Emerah

This made Emerah, when he recovered from mourning to approach the Nigerian Police to investigate the matter after which they found Citibank culpable. Thereafter, the police started the prosecution of Citibank and its officers.

The suit between the Federal Republic of Nigeria and Nigeria International Bank Ltd (CitiBank), listed C.S Sankey, Citibank managing director, Emeka Emuwa, former Citi bank official now the managing director of Union Bank, Peter H. Harris, Adekunle Oladosun, and Okechi Emeka Ugwu as defendants. Other officials from the Citibank who are listed as defendants include Lulu Ndukuba, Kabiru Bello, J.E. Eriagbon, Olusola Fagbure, Samson Ebie, Steve Obodomechine. The rest are Mikky Dons Nigeria Ltd, Mark Anaele, Ariyo Oyowole Odunala, Peter Bamidele Oriade and Obianwa Chuba.

The statement of offence against the defendants accused them of a 20-count charge. They were accused of “Conspiracy to defraud contrary to section 8(a) of the Advance Fee Fraud and Other Fraud Related Offences Act Cap A6, Laws of the federation of Nigeria 2004 and punishable under section 1(3) of the Act.” The charge also stated that the accused presented untrue documents contrary to section 161(1)1(a) of the Customs and Excise Management Act and punishable under the same section 161(3) of the came Act.

The charge document signed by Mohammed Daidu Diri, director, public prosecution of the federation on behalf of the attorney-general of the federation and dated 21 October, 2015, accused the defendants of fraudulent evasion of duty contrary to section 164(b) of the customs and excise management Act, Cap.C45, laws of the federation of Nigeria. It accused them of corruptly enriching themselves, contributing to the economic adversity of the country; obtaining goods by false pretense contrary to section 419 of the criminal code Act and conspiracy to commit felony contrary to section 516 of the criminal code. The defendants were also accused of obtaining money through false pretense contrary to Section 8(a) of the Advance Fee Fraud; counterfeiting documents contrary to section 162 (b of the Customs and Exercise management Act; making of forged documents contrary to section 1(2)(c) of the Miscellaneous Offences Act Cap M17.

Buhari
Buhari

The particulars of the offence state that Nigerian International Bank Limited (formerly CitiBank), Sankey, Emuwa ,  Harris and others on or “about January 31, 2001 at the Lagos State within the jurisdiction of the Federal High Court made forged documents, namely Union Bank of  Nigerian Plc (Customs Revenue Receipts) numbers CRR: 092802, 092803, 092804, 092805 and 092700 for the sum of N55,000,000, knowing it to be false and with intent that it may be acted upon as genuine and also to defraud Micmerah International agency Limited and the Federal Government of Nigeria and there by committed an offence contrary to Section 1(2)© OF THE Miscellaneous Offences Act CAP M17, laws of the Federation of Nigeria 2004 and punishable under the said section and under section 3(1) and 2 of the said Act.”

The new report of the investigation Citibank’s fraud against Micmerah written by M. Abdullahi, deputy director, DPPF dated August 10, 2015, noted that the matter had undergone a legal turbulence. It stated that sometimes in the year 2000, Micmerah International Agency Ltd entered into import finance agreement with Citibank for the importation of luxurious buses and motor parts. Micmerah made initial contribution of N250 million to the bank. It further paid N107,349,964 towards the importation of the said buses and spare parts. Upon arrival of the goods, the bank nominated Messr Dons Nigeria Ltd as clearing agents and directed Micmerah to pay N56,000,000 to it for clearing. The clearing agent colluded with other suspects in the case and procured a forged Union Bank import duty receipt which was deliberately cleared by the bank. This led to the seizure of the goods by the Nigerian Customs Service for an alleged evasion of payment of custom duty. When the Nigeria Customs Service insisted that the duty must be fully paid the bank collected N11,000,000 (20 percent counter fund) from Micmerah to enable it pay the duty.

Subsequently, the bank secured the release of the goods by using forged documents to wit: Court affidavit, police extract and revenue receipts. The bank, thereafter, sold the luxurious buses without recourse to Emerah.

The bank defrauded Micmerah by claiming that its charges on the said import finance facility had not only wiped out the entire N250,000,000 but that Micmerah was still indebted to it.

Based on these facts and the ensuing petitions and counter petitions received from both parties, seven pieces of advice were proffered. “The Ministry’s stance has been consistent in all the advice proffered that is; there was sufficient evidence to proceed against the suspects and that the court should be allowed to determine the interests of the parties in view of the contentious nature of the case. Hence, charges were filed at the Federal High Court and Chief Chris Uche (SAN) was granted fiat to prosecute at no cost to the Ministry”, Abdullahi said.

Osinbajo
Osinbajo

“Despite this advice, the former attorney general entered Nolle prosequi on May 20, 2011, based on which the charge was struck out on June 7, 2011. After terminating the case, the immediate past HAGF in a twist invited the parties to his office with a view to arriving at lasting settlement. The invitation was not honoured by the suspects. Apparently, this has led to the grievances expressed in the petition,” the deputy director, DPPF wrote,

According to him, the grievances of the petitioner was anchored on two issues  – the withdrawal of fiat granted to Uche, SAN, to prosecute the case and the notice of discontinuance entered by the former attorney general. Both issues concern the pre-eminent and incontestable powers of the attorney general to institute and undertake or discontinue criminal proceedings as enshrined under section 174 (1)(a) and (b) of the Constitution. This constitutional power is personal to any incumbent attorney general.

However, in the exercise of these awesome powers, the attorney general should have regard to the public interest, the interest of justice and the need to prevent abuse of legal process. The attorney general must, therefore, exercise his powers with a high sense of responsibility so as not to create a perception of being draconian, bias or arbitrary or even blemish the image of the ministry he headed.

“From the content of the case file and the petition under reference, it is apparent that about six consistent considered legal opinions have been given regarding the culpability of the suspects and the need to have the matter determined by the court. In fact, in the advice submitted to the former President (Mr. Goodluck Ebele Jonathan), the immediate past attorney –general stated thus “Upon the conclusion on investigation by the police, the case file was forwarded to the office of the Attorney General of the federation, this office studied the file and was convinced that there was enough evidence upon which to charge at Federal High Court  —– I am of the view that the court is proper venue for the parties to canvass their legal points of view and not the chambers of the Hon Attorney General, HAGF, of the Federation to avoid petition and counter petition,”  the deputy director DPPF wrote.

According to him, “For the former HAGF to later make U-turn and discontinued the case without any prior reviewed advice after the case had commenced in court; and thereafter extended unsolicited invitation to the parties to report to his office for final settlement is capable of eroding the image standing of the Ministry in the eyes of the public and might also lead to unnecessary and unpleasant aspersions from the parties.

“In my opinion, the case at hand is a contentious one going by the petitions and counter petitions in the file. Since the office of the HAGF is convinced that there is sufficient evidence to prosecute the suspects, the proper venue to determine the interests of the parties should be the court and not the chambers of the Attorney General so that no party leaves with a feeling that his right was wear away by the Ministry,” he wrote.

It was for these reasons that the deputy director, DPPF, recommended that the case should be re-opened and the charge re-filed before a competent court of law. “Let justice be allowed to take its course. I also recommend that the fiat granted to Chief Chris Uche (SAN) to prosecute the case at no cost to the Ministry be restored as he is very much familiar with the facts and legal turbulences the case had undergone,” he said.

Realnews investigation found out that several regulatory authorities have investigated the case between Citibank and Emerah following the latter’s petitions to the Bankers Committee, the Central Bank of Nigeria and the ministry of finance among others. All the reports of the investigation blamed Citibank for allowing its platform to perpetrate economic crimes. From the police side, the investigation was conducted by Sotonye Nwakama, deputy inspector general of police, now in charge of Operations at the Police Headquarter and Tunde Ogunshaki, assistant inspector general of police while they were in Inspector general of police’s Monitoring Unit.

Taiwo Abidogun
Abidogun

The Central Bank of Nigeria vide its letter of July 5, 2006, with Ref/FEMO/MISC.06/Vol.1/55/06 to the Inspector general of Police unequivocally stated that “Citibank deliberately flouted the CBN Circular Ref. TED/AD/80/99 dated August 25, 1999 on import Guidelines, Procedures and Documentation Requirements given that it was a  designated bank for import duty collection at the time of transaction, it failed to collect the duty by itself and equally failed to certify evidence of payment of duty presented to it by the clearing agent from issuing bank and to obtain CBN approval before the release of the CRI.” It added that: “the use of fake import duty by the clearing agent (nominated by Citibank to secure the release of the CRI and other documents from Citibank was criminal.”

Also, the Tin Can Island Port Customs Area Controllers’ office letter Ref. No. NCS/TCL/CAC/006/514 dated September 10, 2002, to the inspector general of police, IGP, expressly stated that Citibank’s agent, Mikky Dons Nig. Limited had been diverting the federal government revenues to his private account with some aid of bank officials. The Customs observed that the receipts issued for the transaction were fake. The Nigerian Ports Authority (Tin Can Island Ports letter to the IGP Ref. CR3000/PAP/TCIP/Vol.14/157 dated 27 July 2006 equally confirms that position.

Also, the comprehensive Police Progress Investigation Report – Re: “Case of Criminal Conspiracy, Forgery, Evasion of Duty Payment and Stealing against Nigeria International Bank Ltd (Citibank)” Ref: CB.4099/IGP.SEC/ABJ/SIU/Vol.1 dated August 1, 2006, to the inspector general of police, IGP, by ACP Tunde Ogunsakin stated in its conclusion/recommendation that:  “The interim investigation report on the above sought expert advice from the CBN, the Federal Ministry of Finance, and the Nigerian Customs Service on the interpretation of relevant laws guiding the payment of import duty; the role of the bank, the importers and clearing agent.

“Additionally, the bank was requested to provide answers in writing with regards to the sales of the goods and spare-parts some of which contravened directives ordered by court. Citibank in its reply admitted selling the goods without a court order despite the complainant’s interest in the goods.”

Also, the CBN through its directors of Trade and Exchange, in its first reply to the police dated July 5, 2006, indicted Citibank Nigeria on three separate issues, but surprisingly reversed that opinion on being contacted by Citibank, the suspect party. Police preliminary investigation revealed that “the subsequent letter dated July 11, 2006, was sent on the directives of one Mrs Akanji, the Director Trade and Exchange based on a conversation she had on phone with Mr. Emeka Emuwa, managing director, Ms. Olushola Fagbura, company secretary/legal adviser of Citibank (Nigerian International Bank) on Friday, July 7, 2006. This is currently the subject of an in-house investigation at the CBN.”

Citibank’s infraction against its customers is not limited to Nigeria alone. The New York Post on Nov. 26, 2014, carried a report of how a model and actress who has had roles in the movie “School of Rock” and the TV show “Ugly Betty” sued Citibank for $300,000, claiming the financial giant short-changed her for an advertising gig. Barbara Dacoscos, who has also posed for L’Oreal, Nikon and Hilton, was hired by an agency for a photo shoot at the Brooklyn Historical Society in July 2011, according to the Manhattan civil suit. That year, Citi first bought the rights to the photos and renewed them through 2013, the suit says.

Adoke
Adoke

But the bank stopped paying renewal fees and continued using the brunette’s image in an online ad campaign, according to court papers. A spokesman for Citi was quoted as saying the parties had already settled the case. He declined to comment on the details of the deal.

CitiBank was also mentioned as one of the banks ripping off investors in overseas markets.  John Aidan Byme in his article published in New York Post July 18, 2015, quoted John Germinario, an international banker and former top executive at Citigroup and Bank of New York, saying the bank was involved in the “hush-hush multibillion-dollar global securities scam which the feds are onto in US.”

“The ill-gotten payout in this jackpot is kept by the major US depositary banks in a massive swindle of US shareholders and public companies wanting to get into foreign stock markets such as China, he claims. And the losers? Investors — including household names in the hedge-fund world using the old-fashioned American Depositary Receipts (ADRs), certificates in shares of foreign companies traded on American exchanges; and their equivalent, known as Global Depositary Receipts (GDRs), traded on foreign exchanges,” Byme wrote.

“It is corrupt to the core,” Germinario, 60, told The Post recently from his home in Las Vegas. “ADRs and GDRs are big money — operating in an antiquated system rigged by the depositary banks. I call them the mafia. And they are whacking everybody, including ADR shareholders.”

Germinario, an industry whistleblower who provides regulators an expert’s account of this alleged corruption, warns of black eyes in the coming months — legal cases and Securities and Exchange Commission probes that could rock the very foundations of Wall Street.

In a case against the Citibank filed recently in US District Court in Arkansas, the investors claimed the bank docked fees from dividends and cash distributions by foreign companies without proper disclosure — claiming damages of $5 million plus court costs.

 “ADRs and GDRs are financial products that offer unrestricted and largely unregulated access to modernized international markets that allow for gross share-trading inefficiencies — and ease of global corruption by the banking source,” Germinario said. Among Germinario’s catalog of rogue activity:

  • Depositary Receipts manipulated for money-laundering, tax avoidance, pump-and-dump, bribery and shareholder dilution through naked short-selling regulations.
  • Depository banks paying public companies sums ranging from $5 million to $90 million to nab accounts, then coming back to them with multimillion-dollar fees for depositary services. Fees are typically “uniform and fixed” across the industry, says Germinario. The banks even dipped into the government’s Troubled Asset Relief Program money to finance their schemes, Germinario alleged.
  •  Unpaid taxes: Back in 2005, Germinario and his team went to the SEC and IRS, claiming the depository banks did not pay their proper taxes. He says at least $550 million has since been recovered.

Germinario is hardly the first to blow the whistle. But he might be the most high-profile bank executive to go public on ADRs and GDRs. Citibank did not returned calls for comment.

Argentina has also put the heat on Citibank after striking a deal with billionaire hedge Paul Singer. In April last year, four government bank regulators entered the Citi headquarters in Buenos Aires to “monitor operations,” a central bank spokesperson told Reuters. The move comes days after Argentina suspended the bank’s capital markets activities and stripped Gabriel Ribisich, Citibank Argentina CEO, of authority.

Citi has been caught in the middle of the country’s bitter battle with Singer and other hedge funds to whom Argentina owes $1.6 billion on defaulted debt they own. After a US federal judge finally ordered Citi to fall in line with his plan to help Singer got his money from Argentina, the bank came upon a solution.

Instead of appealing the order, it agreed to exit its Argentine custody business, which processes the Argentine bonds in question. But Citi planned to keep all its other lines of business in Argentina, where it has a very large retail presence. The US federal court agreed to let Citi make two more quarterly payments while it exits the custody business and turns the bond business over to another bank. Axel Kiciloff, Argentine Economy Minister called Citi’s move a “scam” that violated Argentine law.

There is also the case of Citibank India employee arrested by Delhi Police for alleged £57million fraud. Police in Delhi did the arrest recently after unearthing what is alleged to be a multi-million-pound scheme to defraud the US-based bank’s customers.

Jonathan
Jonathan

All these raise doubt about Citibank’s ability to keep its promises to render impeccable service to customers. Rather it deploys crafty means to deprive innocent investors of their hard earned money in a deceitful manner as can be seen in the case of Emerah. Suffice it to state that the way the Nigerian attorney general handles this recent case will determine whether Buhari’s anti-corruption war is on tract or just a mere ruse.

According to Emerah, “it is an irony of sort that a man who have a record of colluding with other board members of Citibank to defraud an innocent businessman was allowed to rise to the position of superintending over a national heritage like Union Bank Plc.

“Worst still, his partners in crime have been walking the streets of Nigeria freely, yet we pretend to have laws against crime in the country. I thank God for President Mohammadu Buhari who ordered that those involved should be brought to book and currently the attorney general is prosecuting them through Chris Uche, SAN and Godi Uche, SAN”.

However, independent investigations show that there might be a major clog in the wheel of justice as the Citibank has allegedly started using highly connected individuals in both the US government, Nigeria and ministry of justice to squelch the case once again. Citibank has petitioned President Buhari and Vice President Yemi Oshibajo, claiming to be the victim being hunted by Emerah. The letters which are in possession of Realnews were minuted to the attorney general by Abba Kyari, chief of staff to the president and that of the vice president, respectively.

Citibank’s letter to the president brought to his attention to what it described as apparent abuse of judicial process whereby criminal charges have been filed three times against the bank and its officers at the instigation of Emerah. According to Citibank’s letter, the charges arose from commercial transactions between it and Micmerah, “which has been the subject of multiple proceedings before the civil courts. The letter said that since 2003, Micmerah has made unfounded allegations against Citibank and its officers to various police commands and security services which resulted in criminal charges against the bank and its officers. “Chief Emerah’s aim has always been to avoid the repayment of the substantial sums his company owes Citibank and damage the reputation of the bank and its staff,” it said.

It also appears that Citibank is reaching out to Taiwo Abidogun, permanent secretary of the ministry of justice, whose interest in the case allegedly run counter to that of the ministry of justice and government’s fight against corruption. It is alleged that he is withholding the case file and advising the attorney general against prosecuting the case. Abidogun could not be reached as at press time.

Nevertheless, at the last court sitting in Lagos in March, Justice Ubrahim Buba, the trial judge, ordered that the summons be served on the defendant by substituted means, pasting the order in their offices and residence to ensure they appear in court. This became necessary because the defendants had failed to appear in court each time the case was called while also evading service.

 The case is coming up for arraignment on April 14, and if Citibank fails to appear before the court, the judge may issue bench warrant for the arrest of the defendants. Only time will tell if Emerah and his company will get the long awaited justice from the court.

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