Joshua Dariye another fugitive governor loved by UK banks
Joshua Dariye is another governor who use of British banks to launder money was revealed in the Global Witness report. The former governor of crisis prone Plateau State is said to have brought into the UK £2.85 million (N741 million) of suspected stolen funds through two banks, NatWest and Barclays. Following his arrest in 2003, Police also recovered £80,000 (N21 million) in cash from his London home.
Goodluck Jonathan-Nigeria's President
David Cameron-Prime Minister-UK
The report revealed that about £1.17 million (N304 million) of the £2.85 million funnelled into the UK by Dariye was done through the accounts of one Joyce Oyebanjo at NatWest Bank. From July 2003 to March 2004, Dariye made seven payments into Oyenbanjo’s NatWest Account in different instalments that came to about £1.17 million or £1.48 million (N385 million) including interest. At the time of Dariye and Oyebanjo’s arrest only £198,045 (N385 million) remained in the account.
As the money was transferred to Oyebanjo’s account, she issued several cheques to Dariye on his frequent visits to London. Her account thus became a convenient conduit for Dariye to get money into the UK. In April 2007, Oyebanjo was convicted for money laundry charges and sentenced to three years in prison. Dariye remains in Nigeria a free man after fleeing from justice in UK.
Abacha was another top Nigerian leader known to have used UK banks to launder millions of pounds. According to an FSA report, Abacha used 23 different London Banks to launder about £900 million. A report by the Financial Times identified three of the banks to be Barclays, NatWest and UBS.
An African banker, working in the London financial district, who prefers to remain anonymous, said he was marvelled at the complicity of UK banks in helping launder money despite all the checks that are in place to prevent it from happening.
“One question I need to ask is what the UK police and anti-fraud officials did at the onset of this scheme.”
“Since the end 2001 and early 2002, there has been anti-terrorist financing laws in the financial world and financial firms have been mandated to report unusual cash transactions and systems are supposed to be in place to alert officials, so where were they, did they look the other way thinking that it will stop? Did they not act because they were afraid of others finding out and as such damaging the image of London as a financial centre?”
Speaking on the Ibori case he said “To think that Ibori could go to Barclays at Knightsbridge and deposit £1.5m in cash is just extraordinary. How did Barclays accept that? But if I travel with more than £2,000 on me, I will be questioned for money laundering and possibly the cash ceased. Is this not double standard depending on your status?
“But Coming to think of it, he was smart enough to have gone to Knightsbridge branch of Barclays where –almost certainly – anyone who opens an account with that branch is likely to be a rich person. He would have been turned away and the cops called had he ventured into any Barclays four miles south in Clapham or Brixton. Makes you wonder if Barclays anti money laundering procedure is tight.”
“Ibori’s case raises serious questions about the due diligence that Barclays and the other banks carried out on Ibori and his associates. What checks did these banks do to ensure that the funds they were handling were not the proceeds of corruption?”
“It is sad what African leaders are doing to us and our unborn children, it is a shame.”
He narrated an experience he had. “I was at a lunch meeting with some officials from Luxembourg and a convoy of cars drove by, the guy I was at launch with told me that the convoy belonged to an African head of state who came to Luxembourg with his army of ministers to beg money but the funny thing was that the authorities had a dossier of the president and his convoy and how much money they have stashed all over the world which is far more than what they have come to beg for.”
Another banker who also works in the London Financial district however explained why UK banks are so eager to take stolen money from Africa’s political looters with little or no questions asked.
“We know how this works, any stolen money moving from one bank to another will lose at least 5%, that coupled with broker and lawyer fees will at least attract another 15% charge and the asset manager’s initial fee of at least 5% tells us that any money taken illegally away will automatically loose at least 25%. This is money we are giving people richer than our people, what are we doing to ourselves” He asked.
However, the Financial Services Authority (FSA), the UK bank regulator, is already taking some action to reduce money laundry in UK banks. They carried a review in 2011 which showed that British banks were systematically failing to carry out the required anti-money laundering checks especially when dealing with senior foreign politicians.
Nigerian banks are the other side of a bad coin.
Analysts however say that the British Banks are just one side of a bad coin. The other side of the bad coin are Nigerian banks. Most of the money that end up in British banks is first passed through Nigerian banks who are supposed to know the status of the governors. For example, the Global Witness Report discloses that of the £2.7 million held in RBS bank account by Alams in 2005, £1.6 million (N416 million) was transferred into that account by now defunct Bond Bank, one of the banks that collapsed into the Skye Bank Group during the 2006 bank mergers and acquisitions in Nigeria.
The Financial Action Task Force (FATF) last February classified Nigeria among countries with strategic Anti Money Laundry/Combating Terrorism Financing deficiencies that have not made sufficient progress in combating those deficiencies or have not committed to an action plan to working with the FATF address these deficiencies.
Sanusi Lamido Sanusi-Governor, Central Bank of Nigeria
Insiders in the Nigerian banking industry however note that competition for government deposits is a facilitator of political corruption in Nigeria. Most banks in Nigeria will do anything to get a state government’s account which usually runs into several billions of cash inflows every month as crude oil revenue is shared. To get this state government account, bank managements usually have to incentivise the governors by agreeing to secret terms that ensures that they keep these accounts from competitors.
Some of the bargains reached with the governors who are the ones who decide where these account should be kept include agreeing to facilitate these transfers even when they know it is State funds that are being transferred illegally. The sad part insiders say, is that, the banks also fund the States corruption with loans which costs are then borne by ordinary Nigerians. Most State governments are known to committed their states to significant debts from private banks most of which are transferred into their personal accounts abroad. Most State governments are known to be significantly indebted to banks without the citizens knowing what the money borrowed from the banks were used for.
“The banks just lend the governors money without asking questions. Money is learnt to governors for all sorts of things and at the end of the day, no one accounts for how this money is spent. Yet the State’s future allocations and tax revenues are tied to the repayment of these loans. A good number of States have mortgaged the future and welfare of their citizens to satisfy their present greed. And they are doing these with the active collaboration of Nigerian banks” an insider who prefers to be anonymous said.
Analysts insist that if the governors have to be stopped from stealing their states blind, Nigerian banks and the Central Bank of Nigeria (CBN) has to enforce more stringent anti money laundry legislations.
However, the increased scrutiny from Britain has forced Nigeria’s political looters to start diverting funds to places like China, Brazil, India and other parts of the world where there is less scrutiny. Dubai and other friendly Gulf states in the Middle East have also become a major destination of stolen funds from Nigeria. Top Nigerian politicians are said to be very active in the Dubai property market where they are said to prefer paying cash for properties while living in the most expensive hotels. Taxi drivers on the streets of Dubai are most likely to talk about the escapades of Nigeria's money bags once you identify yourself as a Nigerian in Dubai.
Those who know say that the increased scrutiny is also driving stolen funds into the local Nigerian property market and the over the counter securities trading market in Nigeria. A top Nigerian telecom firm’s over the counter shares is said to be a preferred investment choice for Nigerian politicians because of its high cost and good returns. Its high cost means that politicians can use it to stash away millions of Naira without raising too much interest. It is even more attractive since it is traded over the counter with little scrutiny. Private equity funds are also said to be getting some of these stolen funds from Nigerian politicians who are doing everything to hide their loot in the face of increased scrutiny.
The UK however still remains a preferred destination by Nigeria's political looters, most of whom cannot resist the assumed prestige of owning a property in London and sending their children to UK schools. This means that Nigerian political looters still want to launder money in the UK. For financial regulators in Nigeria and the UK, the challenge will remain how to break this brotherhood of the banks and Nigeria’s political looters, oiled by profits and greed, which will endure as long as there are banks to help them cover their tracks for a share of the loot.